Innovate. Or die.

Here I go with another rant. In the last years, the advertising and media industries have been battered by a tsunami of change.

1. Independent media houses have taken over the world! Previously, all media buying and planning were handled through ad agencies. An archaic 15% agency fee levied on media placements (unchanged since the early 70s!) as commission goes out the window because independent media specialists today offer clients better discounts. Due to volume buys, they return up to 10% and more to clients (plus other goodies), increasingly and effectively shutting down media departments in agencies.

2. Clients are taking back control of printing and prepress (colour separation, filming, etc), two essential processes ad agencies normally undertake as billable professional creative services (although outsourced). Most agencies add an industry mark-up of 15% and above here depending on the scope of work involved, which enlarges an ad agency’s overall margins.

Despite unfamiliarity with the above processes, clients feel the savings they make justify the inconvenience. Savings? Well, yes, because in a dog-eat-dog world, printers and prepress providers are known to offer rates so low they are unmatched by any agency.

Take the Chinese press for instance. Unlike other language media owners who subscribe to agreed rates and contracts, Chinese press sales reps negotiate percentages directly and independent of agencies. How the noose tightens.....

3. Say, how much is creative work worth? While Clients and suppliers like these muscle into agency ‘territory,’ it has become imperative to charge a higher premium for creative work - ideas, concepts, copy, etc. Brain work which cannot be quantified, and for which clients in the country to this day are unwilling to dig into their pockets. How would you fancy an invoice of RM10,000 for a logo? Uh-uh. Besides, hourly rates for creative work are not only unacceptable in Malaysiaas impractical, they are being reconsidered in many parts of the world too.

4. Globalisation has ripped across traditional boundaries killing any inclination to localise or contextualise campaigns. Okay, I’m exaggerating for effect, but just slightly. There is increasingly no pressing need to reshoot new campaign commercials, photograph fresh new pix, or compose original jingles for use in another country lacking in economies of scale (like Malaysia for instance). Additionally, stock photo companies are offering images that are downloadable via the Internet, reducing incentives for local creatives to produce their own!.

While TV stations are bound by the Made-In-Malaysia ruling (commercials airing in local stations must have majority local content), even that is mere lip service as competition heats up.

5. Broadcasting stations are sidelining the little guy by packaging media buys and air time with post-production. Well, not entirely, but enough to kill outside independent production houses that normally have their jobs cut out for them. For clients, that means they get TV/Radio station DJs to do voice-overs, complete audio and sound production facilities, camera crews to shoot your TVCs, etc, all under one roof, and at rates that are almost unbeatable.

This makes an attractive entry point for small and medium size enterprises (half of the total business). That's good surely, but look who’s getting the production business. As a result, independent audio houses and film production companies in Malaysia are shutting down or down-sizing, except for a handful who have ventured abroad to widen their base to stay afloat.

Now does that sound like bad news? You tell me.