The Journey of Business Model Innovation in Media Agencies: Towards a Three Stage Process Model

New digital entrants in the media industry have changed the competitive landscape for advertisers and media alike. In particular, over the past decade media agencies have grown more rapidly than the media market as a whole, securing a larger share of the value generated in the advertising value chain. Based on secondary data and in-depth interviews with 11 Danish media agency CEOs, and using the nine building blocks suggested in the business model canvas framework of Osterwalder and Pigneur (2010), we develop a grounded process model describing how these agencies have altered their business models. We find evidence for the existence of three separate stages in this innovation process, which we call business model innovation awareness, business model exploration, and business model exploitation. We furthermore find and document how different building blocks act, and interact as enablers or facilitators of innovation in each stage of the business model innovation process.