Thoughts about media in Canada

The Battle for the back office.

Imagine looking under the hood of a luxurious car and finding a labyrinth of copper pipes, valves and a steam engine at its core. Well that’s what you find if you dig deep into the inner workings of an ad agency. At the heart of media agencies where literally billions of dollars are being managed is DDS. Now there is nothing really wrong with steam engines, they are extremely powerful, reliable and simple which is why DDS holds a massive share of the market. There is not much reason to design the ultimate interface for a timesheet or a billing management system hence the reason why many people in the agency are content with using command line user interface software that looks like DOS 1.0. That is, until some kind of game changer comes from nowhere.

There are two kinds of transactions in media. The established way involves paper, phone calls, faxes and systems like DDS to manage and clear the bills. This systems is reliable and stable for the usual media buy which covers 10 – 50 different media suppliers.

Contrast that with how online ad networks are handling transactions. They are able to manage the buy/no buy decision with thousands of websites in the blink of an eye. Layer on top of that one of the players in online ad networks in Google which also brings in capabilities with ad exchanges in addition to Google Docs which offers an Excel alternative and you can see why DDS and MediaBank are nervously eyeing their business space and coming to the conclusion they need to work together.

There is much to clean up. Although ad networks make super fast transactions within their network, outside the network much of the transaction process is handled the old way. Thankfully the back office is getting some of the attention and investment it needs.

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