• by Sean Hargrave , Staff Writer, August 31, 2016

The "as a service" model has been rolled out into many aspects of technology such as software (SaaS), platforms (PaaS) and infrastructure (IaaS), and it would appear to be in the process of being rolled out in advertising.

Although Advertising As A Service (AaaS) might be the kind of anagram that will get an executive reported to HR if they use it too much -- Media As A Service, perhaps? -- the premise is simple. Machines can suggest where your message goes -- and quite literally, do your bidding while charging a pre-arranged set monthly fee.

As The Drum reports today, it has already wooed Volkswagen away from Mediacom in Germany due to its ability to make the media-buying process far more transparent. Marketers use the Blackwood Seven's algorithm to build a media plan and then executive it. The AI platform uses YouGov and Nielsen figures to guide marketers and then reports back to them in near real-time as to how a campaign is performing.

Whether an advertiser will prefer the advice of an AI platform over highly skilled and experienced media planners and buyers is open to question. The truth is that some will and some won't. However, what will undoubtedly appeal to advertisers is a fixed monthly fee for the service. Now is not the time to get into an in-depth discussion of media transparency, but it's fair to assume that most people would agree there is a fair amount of concern on the advertiser side over fees.

As a percentage, these obviously increase with the amount of overall spend -- but also there is concern that campaigns are often bought from media owners a media agency has the best deal with. In other words, the suspicion is that campaigns are sometimes bought on the basis of the volumes that an agency needs to supply to a media owner to meet their contract terms over and above where the advertiser might otherwise choose to have its messages seen. There is, of course, widespread concern that this earns higher fees for agencies via "kickbacks" or "rebates" from media owners which aren't always passed on to the advertiser in full.

The million-dollar question will of course be whether the new approach can add comparable pricing to its promise of transparency. The deals struck between large media owners and agencies ensure that advertisers buy space at far lower cost than if they went it alone. and so it will be interesting to see how the costs of an "as a service" model compare to a traditional media agency arrangement.

It's an exciting development either way. Media agencies have been under threat from platforms which allow advertisers to buy direct from media owners and networks for several years now but the inclusion of a planning algorithm and fixed monthly pricing make the latest upcoming launch one to truly look out for.