UBM Tech aims at agency business now

Been up to my eyeballs developing content and conversation over at the new launched ARM Connected Community (check it out, lots of cool stuff) so I've been negligent on posting the past couple of weeks.  Then UBM Tech goes and starts blowing up the PR Agency industry earlier this week and it's probably time to do a spot analysis.

 As reported in BtoB Media this week, UBM Tech's Create unit is designed to cut out the middle man in marketing services (meaning agencies and third party creative services) and provide soup-to-nuts communication chains between the companies that pay them and the customers of those companies.  In other words, you want to guarantee you will show up in a UBM Tech publication news story? Then talk to one of their sales agents.  And be prepared to pay through the nose because you will be buying event services, graphic and video services, content creation services and a bunch of other stuff.

 “Historically our customers thought of us as merely a media company,” said Scott Mozarsky, president of UBM Tech. “They bought events or some form of display advertising from us. [Now] more customers are recognizing that we can do things that they didn't realize. We're able to offer our customers programs that run across paid, owned and earned media,” 

UBM Tech has said they are not bypassing agencies, only creating a new way for agencies to work with them, but agencies primarily coordinate multiple sources of content and creative to find the best price for the client.  If UBM wants all of that work for themselves, what's the point in having an agency.

We at Footwasher Media think it's a great idea for UBM Tech because now it will capture every marketing budget dollar and cut out every potential competition ... in the short term.  However, we think this will prove disastrous in the long term for UBM.

Doing a buy at UBM has been, for some time, the most expensive proposition around, and they could demand that kind of money because they have been the top dog for some time.  But there was still some competition among journalism operations.  UBM Tech has already said it has, in essence, left the journalism game (although still pointing to the fact that they have well respected journalists on staff). But they are a "marketing services" company now and, therefore, a lot of what they do doesn't fall under the traditional term of journalism, and the pesky ethics that come with it.  The UBM Tech journalists are, effectively, insulated from the money making side of the business, but they are given marching orders regarding where they need to be and when to gather information.  And that is primarily wrapped around UBM events.

In the meantime, there are lots of respected journalists that have left UBM and traditional media and are now working directly for the companies that UBM is courting, because their marketing budgets are the only ones big enough to afford the Create unit's services.  This is where the disaster is brewing.

As more companies find they can create the same or even better content, and then deliver it on their own media, they are going to wonder why they ever needed UBM. 

Guess what? That's already happening.  I've talked to marketing decision makers at several companies with big budgets using UBM Tech services and they are making plans to dump UBM in favor of in-house programs.  That's where on the long run, this decision is not going to be good for UBM.

UBM Tech management isn't to be castigated for these decisions.  They are giving their sponsors/clients exactly what they have been asking for a decade... complete control over the message, and a little fudging on the ethics of real content engagement.  The old warning, "be careful what you wish for because you might get it," is playing out right now.  The sponsors financing these changes are discovering that it might not be giving them what they want, which is real sales growth from marketing.

Why that growth isn't happening derives from Google's "Zero Point of Truth" concept, and we will get to that in a near-future post.  But I've told you what we are thinking at Footwasher, now. Let's hear from you, especially you in the agency world.  What do you think about UBM Tech's encroachment on your business?  How would you play ball with them?  Have you found getting into UBM media harder or have you just given up?  And maybe we should hear from the UBM media competitors who might be likely to gain from this decision: how are you going to change your model to deal with this?