Depressed Ad Market Brings Media Companies Closer To Competing Head-On with Ad Agencies.

Jupiter Media Metrix reports that the tension between advertising agencies and media companies is shifting from media budgets to creative budgets. With advertisers looking for breakthrough ideas and greater integration into Web sites in a climate of limited budgets and resources, media companies and other Web publishers are trying to extract additional fees
for creative services. According to a new Jupiter Report, “Agency vs. Publisher: Reintegrating Agencies into Alliance Deals,” agencies must highlight their ability to finalize and execute marketing deals to both clients and publishers.

Jupiter analysts and special guests from R/GA, I-traffic, Fastbridge and the Digital Edge will confront the current temperament of online advertising and discuss its evolution through changing economic times during a special free-of-charge Jupiter Smart Business Series Event happening today in New York City.

“Media companies are on the prowl to capture additional fees for creative services,” said Marissa Gluck, Jupiter senior analyst. “As the battle between agencies and media companies extends to creative budgets, media businesses will find themselves unable to compete over the long term. Beware the wrath of the agencies — they will forgive (for now), but not forget.”

Rather than circumvent the agency, publishers are finding that agencies can be a more effective catalyst for deals than going straight to advertisers, particularly as large, traditional advertisers rely more heavily on their agency for online strategy. According to Jupiter analysts, media companies will prosper by catering to and courting agencies, not competing with them for services such as creative and market research, or attempting to cut the agency out of its commission. Advertisers and publishers need to proactively include agencies in major media deals, say Jupiter analysts.

According to a recent Jupiter Executive Survey, about one in four advertisers are looking to bring in-house the services its agency provides. While advertisers believe they can replicate the planning and buying functions of an agency — and perhaps even much of the reporting and analysis functions as well — Jupiter analysts believe they will find it much more difficult to duplicate the creative competencies in which good agencies excel.

“It is especially dangerous to trust publishers to do an advertiser’s reporting and analysis — a relationship akin to a fox guarding the hen house,” Gluck said.

For more information at http://www.jmm.com

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