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Illustration: Rebecca Zisser/Axios
The world's largest advertising companies face a growing threat from clients moving more of their media strategy and creative businesses in-house.
Why it matters: The trend is happening amid a trust fallout between agencies and companies over murky ad-buying and contract bidding practices, some leading to federal investigations.
Driving the news: A new report from the Association of National Advertisers (ANA) finds that agencies are suffering more than ever from companies shifting marketing functions that were typically outsourced to agencies to teams in-house.
What they're saying... The head of marketing and communications at a well-known consumer packaged goods company put it this way to me on a call:
"Sometimes we feel bait and switched. An executive team will come in to pitch us on a great idea, and then it gets punted down to lower-level staffers for execution who don't have the right expertise. It becomes more efficient to bring some of the creative services in house so we don't waste our time."
Between the lines: Financial struggles and minimal oversight at some of the biggest global agencies have for years led to bad practices, like kickbacks and bid-rigging, that have led marketers to question whether their dollars are being wasted.
The big picture: The biggest agency holding groups, such as WPP, Omnicom and Publicis Groupe, have been struggling to drive growth over the past year.
The bottom line: "Investors are generally negatively oriented around agency holding companies at present, largely understandably," writes Brian Wieser, a Senior Research Analyst for Advertising at Pivotal Reearch, in a Q3 research note.
"Concerns around the potential impact of an FBI investigation into transparency related topics have re-emerged, and the regular drumbeat of doom and gloom from news reports of marketers' cost-cutting exercises, in-housing and use of consultants is ever-present."— Wieser
What's next: Some marketing executives say this conundrum has pushed them to move away from agency retention models and instead move toward a fixed-fee project billing model.
Illustration: Caresse Haaser, Sarah Grillo/Axios
Facebook and Twitter are declining as news and media referral sources on mobile, according to a report from traffic analytics company Chartbeat, which finds that users are increasingly using search for news as well as migrating to publisher and news aggregation apps.
Why it matters: The increase of social media distribution on smartphones meant that more people generally had access to more news and information than ever before, but a lot of it was unvetted, one-sided or outright false.
Between the lines: Three market forces are pushing news traffic to come from places other than traditional forms of social media...
The big picture: Since January 2017, per Chartbeat...
The bottom line: At a high-level, it's an example of how new technologies can be partially regulated by market pressure (and threats of democratic government regulation) over time.
A new study released Monday by the University of North Carolina’s School of Media and Journalism details the stark decline of newspapers in the U.S. and particularly in rural areas, where citizens are less educated, poorer and older.
Why it matters: Because of the isolated nature of communities in which many papers have dissolved, "there is little to fill the void when the paper closes."
Between the lines: The report shows that the collapse of the newspaper industry, beginning around 2004, has been getting worse.
By the numbers:
Last year I caught up with Penny Abernathy, the report's author, who has been studying the economic decline of newspapers for years and asked her about the importance of newspapers in society. One quote that stuck out:
“A good newspaper shows you how you’re related to people you didn’t know you were related to. It gets you back to your sense of place."
The disappearance (and presumed murder) of Washington Post contributor Jamal Khashoggi has the world wondering how much the U.S. and its allies will fight for press freedoms and justice.
Why it matters: Many in journalism worry President Trump's rhetoric on "the fake news media" has in part empowered authoritarian regimes to act out against the press without fear of U.S. repercussion.
Between the lines: The saga has also forced industry leaders to take a stand against the regime, which until this point has experienced a muted reaction from many world leaders, including U.S. allies.
Media companies that were participating in an upcoming Summit hosted by the regime (CNN, Bloomberg, CNBC, NYT) have all pulled out of the event, with the exception of Fox Business, which says their decision is still under review.
The big picture: The U.S. ranks 45th out of 180 countries on the World Press Freedom Index, according to a Reporters without Borders study.
Photo: Schicke/ullstein bild via Getty Images
Political spam is rising, with more people looking to take advantage of minimal regulation around new technologies and heightened interest around the 2018 midterm elections.
Why it matters: For years, people have complained about feeling inundated with political messaging during election seasons, particularly the ads.
Be smart: The biggest form of political spam this election cycle is peer-to-peer (P2P) texting. It has become the hottest way for political campaigners on both sides to increase voter engagement ahead of the midterms, mostly because P2P texting is not subject to the same regulations as automated texting.
Illustration: Lazaro Gamio/Axios
Brands are creating their own media channels to reach users directly, often competing with traditional media brands for users' time and attention.
Why it matters: There's more good content than ever for users looking to explore niche interests, but it's also crowding the field for traditional brands and media companies to compete.
The bottom line: Users are spending more time and money with new brands that are using media (and data) to form direct relationships with them online.
Illustration: Sarah Grillo/Axios
Last week, I wrote about the race to own the future of TV, focusing largely on efforts by technology companies to invest in mobile and streaming video, and noting legacy media networks were largely behind.
The bottom line: The consensus among most analysts is that many networks don't at this point have the scale to compete directly with some of the streaming giants, in large part because they spent years as wholesalers with no direct-to-consumer relationships.
I chatted with Alan Wolk, leading TV industry analyst and co-founder and lead analyst of TV[R]EV, on his take. He thinks the networks "are starting to hit back a little harder," with more innovative distribution and bigger investments, but will struggle to compete with some of the big tech companies who can promote their content to audiences over a much larger geographic window.
The big picture:
Between the lines: Disney (+Fox) and WarnerMedia are better positioned to compete with some of the tech companies by scale now that they've negotiated mergers:
After months of waiting for a release approval, Crazy Rich Asians will finally be available in China this November, Variety reports.