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2018 | Articles That Piqued Our Readers Interest

31 Dec

WTop 5ith 2018 now in our rearview mirror and all of our attention focused on the coming year, we thought that you might be interested in learning what our “Top 5” blog posts were over the past twelve months, according to our readers.

While familiar issues such as; trust, transparency and brand safety continued to be at the fore of advertisers’ attention, new topics including programmatic audio, AI-powered personalization and federal privacy regulation crept into our field of view. Click below to access 2018’s top posts.

  1. 3 Keys to Strengthening Client-Agency Relationships
  2. 4 Keys for Optimizing Direct Labor Based Remuneration Systems
  3. Agency Compensation: The More for Less Trap
  4. Advertisers: What Does the DOJ Know About the Ad Industry That You Don’t?
  5. Will Programmatic Ever Address Advertiser Concerns?

One Hundred Years Later. Has Anything Really Changed?

27 Dec

Sears Catalog CoverWe’re all familiar with the old adage: “The more things change, the more they remain the same.” Strange as that may sound, the notion behind this saying is simple. No matter how complex a situation may appear, nor the rate or nature of changes that we may be dealing with, there tends to be an underlying corollary that remains constant.

To test this hypothesis, I spent some time browsing through the archives of Duke University’s John W. Hartman Center for Sales, Advertising & Marketing History to gain a perspective on what marketers were dealing with at the beginning of the twentieth-century. As importantly, I wanted to compare their reality with the environment in which we operate today.

Surely the fundamentals facing marketers had to have changed, I reasoned. There have simply been too many advancements and technological improvements for the aforementioned adage to hold true. However, a quick review of some key events then and now might suggest otherwise… you be the judge:

Then

  • 1915 – Millions of dollars are spent on advertising and public relations to stimulate consumer demand
  • 1915 –  Modern market research begins, resulting in ads being increasingly targeted to specific audiences
  • 1915 – The first transcontinental telephone line opens from NY to San Francisco
  • 1916 – Self-Service retailing is invented by the Piggly Wiggly chain of grocery stores
  • 1916 – U.S. automotive and truck production exceeds one million new units
  • 1918 – The New York Times begins home delivery
  • 1918 – Ad legend James Walter Thompson sells his namesake agency to Stanley B. Resor and partners
  • 1918 – The Federal Government takes control of the nation’s telephone and telegraph systems
  • 1921 – Badly hurt by the depression, Sears, Roebuck & Company Chairman Julius Rosenwald pledged $21 million of his own funds to bail the company out

Now

  • 2018 – Billions of dollars are spent on advertising and earned media to stimulate consumer demand
  • 2018 – AI aided market research and predictive analytics allow marketers to better chart the consumer journey
  • 2018 – Number of worldwide mobile phone users expected to pass 5.0 billion
  • 2018 – Amazon Go unveils revolutionary check-out free convenience stores
  • 2018 – U.S. Plug-in-Electric Vehicle sales estimated to eclipse 400,000 units
  • 2018 – The New York Times achieves 2 million digital only subscribers
  • 2018 – The J. Walter Thompson brand is merged with Wunderman to form Wunderman Thompson
  • 2018 – The Federal Communications Commission repeals net neutrality rules
  • 2018 – Sears files for bankruptcy, closing 140+ stores, Chairman Eddie Lampert submits $4.4 billion bid to buy the chain and stave off closure

While the size and scale of the issues that our industry was dealing with are certainly different, the fundamentals are actually more similar than not. Whether in the context of advancements in retail models or modes of media distribution to the impact of emerging product sectors and government regulation or even developments related to changes in agency ownership, there is a certain “sameness” to our industry… even after an eventful 100 years.

Hopefully we can find comfort in the aforementioned adage and confidence in the fact that our predecessors were able to successfully navigate the challenges which they faced to help create what has become one of the world’s most stimulating and dynamic business sectors, advertising and marketing.

As we reflect on the passing of another year and contemplate the challenges and opportunities that will present themselves to us in 2019 all of us at AARM would like to offer up an old Irish toast to each of you:

May the best day of your past be the worst day of your future. May your troubles be less and your blessings be more and nothing but happiness come through your door.

Marketers: Are you Optimizing Your Data?

16 Aug

Vision MissionWith the dramatic expansion of data availability and the explosion in marketing technology solutions ranging from Data Management Platforms (DMPs), Demand Side Platforms (DSPs) and A/B Testing Platforms to name a few, the opportunity for marketers to optimize the data available to them to improve execution has never been greater.

Yet, too few marketers and their agencies are fully utilizing these tools to synthesize this data to drive marketing insights that can boost the efficacy of their marketing investment. Mass personalization, the mapping of customer journeys and the ability to improve the organization’s responsivity to competitor actions and market conditions are all possibilities if these tools are properly deployed.

If you feel as though your company could deliver greater value from the investment it has already made in martech, you will want to read this article from McKinsey & Company entitled; “Making the Most of Marketing Technology to Drive Growth.” Read More

Life in a Post-GDPR World

28 May

GDPR LogoWhat can advertisers posit from the early market indicators in the wake of the May 25, 2018 enforcement of the European Union’s General Data Protection Regulation (GDPR)?

There are three takeaways that would seem to portend the near-term challenges for the ad industry:

  1. Consumers aren’t that interested in allowing companies to use their personally identifiable information to target them, contact them, monitor their online behavior or to profit from the sale of that information.
  2. The advertising industry as a whole was not prepared for the onset of the GDPR.
  3. Limitations on access to consumer data could greatly impair the efficacy of programmatic media.

The results of poll recently announced by TopLineComms found that 41% of those surveyed were “planning to opt out of current email subscriptions” with 82% indicating that they were “concerned about how companies use their data.” Many believe that the news surrounding the recent Cambridge Analytica scandal has helped to fuel consumer concerns about data privacy protection. Either way, consumers increasingly want their privacy protected and both marketers and publishers are going to have to find ways to deal with that concern and the growth in global regulatory actions in this area.

Adopted in April of 2016, the advertising industry had a two-year transition period too ready for the May 25, 2018 date, when the GDPR regulations would become enforceable. Unfortunately, too many companies proved to be lax in their preparations. According to a global study conducted by SAP Hybris, “49% of companies either have no plan for compliance or have not yet implemented one.” Readiness was made more complex because of different regulatory compliance burdens for data controllers and data processors and the role of third-party data processors. Gaining clarity among stakeholders as to who was responsible for what and how they were progressing on their compliance readiness proved challenging at best.

While early in the process, since GDPR went into effect, ad exchanges have seen dramatic drops in ad demand, with exchange volumes dropping up to 40%. According to digiday.com, “some U.S. publishers have halted all programmatic ads on their European sites.” In turn, this has led to a drop in publisher inventory in Europe. Of note, many within the industry are blaming Google for its lack of preparation and the company’s inability to vouch for whether or not its third-party exchange partners were compliant or not heading into May 25th. Unfortunately, Google did not notify advertisers of this issue until May 24th leaving them little “time to change media-buying tactics or inform clients.”

In addition, Google, Facebook and a couple of other internet portals have been hit with complaints and potential legal action by independent consumer advocacy groups over “forced consent,” claiming those entities threatened service cutoffs or restricted access if consumers did not consent to Google and Facebook’s privacy and data usage terms.

Near-term, organizations will have to focus on complying with GDPR. Looking ahead marketers, publishers and ad tech providers will need too ready for the likely expansion of privacy protection regulations to other countries and municipalities (e.g. California Consumer Privacy Act). After all, these new regulations are coming at a time when the importance of data and the value that it plays in an organization’s corporate strategy and marketing efforts has never been more critical. 

Perhaps most importantly, organizations will have to focus on developing sensible solutions to placate consumers that have legitimate concerns about how their personally identifiable information will be used. This is a necessary step if using first-party data to inform audience segmentation decisions, personalize consumer communications and monitor behavior is deemed a critical element in their marketing and content strategies.

Achieving these goals will require ongoing remediation efforts and will involve personnel from many disciplines within an organization. It is for this reason that many firms may turn to appointing a Data Protection “Tsar” to lead their efforts to embellish their consumer privacy protection policies, processes and compliance efforts. Not a bad move for companies that have the means to formalize this function.

In spite of the inauspicious start by many to comply with the GDPR regulations it is never too late to heed the old adage; “Proper preparation prevents poor performance.

 

 

 

 

Keeping Pace with the Rate of Change in Ad Industry Can be a Challenge

31 Jan

lexiconDo you sometimes wonder how you will ever keep up with the dizzying array of change that has become a constant in the ad industry? The good news is that you may not be alone in your angst. Just take a look at how industry lexicon has evolved in recent years to reflect the technological changes that the industry is dealing with and one can easily surmise why practitioners feel stressed out…

Industry Lexicon for the 21st Century

Algorithm, artificial intelligence, programmatic media buying, header bidding, second-price auctions, big data, fraud, domain spoofing, viewability, demand side platform, Pinterest, supply side platform, data management platform. Ad tech, exchange, tech stack, human marketing, voice activation, block chain technology, deep learning, managed service model, the duopoly, GDPR, hyperlocal media, ad spoofing, biometric recognition, virtual reality, winning bid log metadata files, econometrics, transparency, martech, Facebook, linear TV, Snapchat, digital content production, ad tech integration, ads.text, brand safety, publisher addressable marketplace, blackhat SEO, walled gardens, proprietary tech integration, trading desks, principal-based buying, PII-based consumer ID’s, brand safe environments, push notifications, mobile-app fraud, spoof impressions, ad networks, e-commerce analytics platform, contextual fit, attribution fraud, HULU, curated inventory, general data protection regulation, CX strategy, cyber security, white list, multi-screen viewing, bid management fees, Instagram, PAM, PII based identifiers, automated monetization, onboard connected TV, app-install, exchanges, click spam, downstream metrics, dynamic creative optimization, sustainable ecosystems, dynamic personalization, performance media platform, extremist content, audience engagement, monetization, fake followers, hard news, enterprise brands, CPI, retargeting, data controller, software development kits, mediation products, combinatorial bidding, people-based marketing, waterfalling,  trust, content recommendation guarantees, Alexa, frequency capping, probabilistic methodology, addressable IDs, over-the-top video streaming, TAG, streaming environments, cross-channel messaging, influencer marketing, direct-to-consumer brands, brand activation, experiential marketing, growth hacking, social selling, fake news, user generated content, storytelling, illegitimate traffic sourcing, private marketplaces, sandboxing, non-human viewing, synchronized nodes, decentralized ad networks, voice assistants, cross-channel attribution, verification technologies, internet of things, personalization, social search, facial recognition platforms, 3-D printing, hyper-relevance, automated buying, voice activation, first-price ad auction, AI machine learning, in-home sensors, smart re-ordering services, digital workspace, multi-channel ecosystem, native advertising, organic posts, privacy settings and controls, FVOD free-video-on-demand, clearing price, net neutrality, invisible bots, Spotify, voice strategy, audio logos, autonomous vehicles, behavioral DNA, spot cloaking…

Never a dull moment for ad industry professionals to be sure. Consider the words of the twentieth century American writer, Alvin Toffler:

“Future shock is the shattering stress and disorientation that we induce in individuals by subjecting them to too much change in too short a time.” 

The questions to be considered are; “Can the industry sustain this rate of change, without compromising its ability to deliver? Can you?” Only time will tell.

 

Are We Missing the Real Issue with Ad Blockers?

26 Oct

blockerThe advertising industry is rightly concerned about the financial impact related to consumers growing use of ad blockers, which can filter out ads before users ever see them. A recent study by OnAudience.com highlights the reasons why:

  • 26% of U.S. consumers now use ad blockers, resulting in lost publisher revenues of $15.8 billion in 2016, up from $11.0 billion in 2015. The U.S. represents approximately $45 billion of the $100 billion global display market.
  • Internationally, the loss of publisher revenue from ad blocking is projected to rise to $42 billion, up from $28 billion in 2016.

In addition, Google has announced that the 2018 version of its Chrome web browser will allow consumers to automatically block “annoying, intrusive” ads, which will accelerate the financial impact of this trend given that Chrome represents approximately 60% of the desktop/mobile/tablet browser market (source: NETMARKETSHARE, September 2017). Google’s motivation, it claims, is that they are simply introducing the Coalition for Better Ads recently announced best practices standards to enhance the consumer’s web browsing experience.

It is no surprise how we got where we are. Advertisers wanted to improve consumer engagement and publishers wanted to drive revenues. This, in turn, led to publishers placing more ads on a web page, including higher paying video units, making ads larger or forcing visitors to somehow interact with these ads to get to the content. This involves video ads that automatically refresh or blast audio automatically or force consumers to wait for :05 to :10 seconds before they can access the content they seek.

In the end, advertisers and publishers have not realized greater levels of engagement, but rather helped to fuel greater levels of consumer irritation and therefore ad blocker usage.

Thus far, the industry has been focused on blocking the ad blockers. It is true that many publishers believe that being exposed to ads is a user’s obligation if they want their content to be free. Others, however, share the consumer’s disdain for obnoxious, intrusive ads, and would like to see them banned from their sites. The problem is that ad blockers tend to block all ads.

So what is the ad industry to do? Busting the use of ad blockers or implementing web browser workarounds would appear to be somewhat short-sighted. Consumers have clearly signaled that they find the level, number, positioning and type of online ads served to them on a regular basis to be discordant with their intended browsing habits. Pursuing a more measured approach on the part of the industry is warranted. As Supreme Court Justice Ruth Bader Ginsburg intoned:

“Reacting in anger or annoyance will not advance one’s ability to persuade.”

The challenge is clear, finding a mechanism for publishers to fund their content creation at least in part through the use of online advertising. The answer, however, is not so readily apparent.

Let’s face it, by in large, consumers do not want to view online advertising. This can be evidenced by plummeting open and click-through rates, reductions in conversion rates and declines in average viewing times. Advertisers and publishers want “engagement” and sadly, consumers want nothing to do with most of the advertising foisted on them.

Is the answer better creative that informs, educates and entertains in the hope that users will both notice the ads and choose to interact with them? Or is it fewer, less intrusive ads that can take away from a user’s web browsing experience? Or will publishers finally have to solve the “pay to view” content dilemma, which consumers have largely been resistant to thus far?

If consumer engagement is the goal, the answer is likely “Yes” to all of the above.

 

Will AI Render Media Agencies Obsolete?

11 Sep

artificial_intelligenceArtificial intelligence (AI) is already reshaping how advertising is developed, planned and placed. The marketing applications being envisioned and adopted by agencies, consultancies, publishers and advertisers are nothing short of remarkable.

From the onset of “Big Data” it stood to reason that the concept of predictive analysis, the act of mining diverse sets of data to generate recommendations wouldn’t be far behind. Layer on natural language processing, which converts text into structured data, and it is clear to see that “deep learning” is on the verge of revolutionizing the ad industry. As it stands, algorithms are currently optimizing bids for media buying, utilizing custom and syndicated data to match audience desires (or at least experiences) with available inventory.

Effective, efficient, automated methodologies for sorting through vast volumes of data to evaluate and establish patterns that reflect customer behavior for use in segmenting audiences and customizing message construction and delivery holds obvious promise.

So, what does this mean for media agencies? Will they be at the forefront of automation technology? Or will they be swept away by the consultancies and ad tech providers that are already investing here?

If media agencies desire to remain in control as the industry evolves, there are real challenges that they will have to address to remain viable:

  • Re-establish role as “trusted advisor” with the advertiser community. Recent concerns over transparency, unsavory revenue generation practices and a failure to pro-actively safeguard advertisers’ media investments from fraud and from running in inappropriate environments have created serious client/ agency relationship concerns.
  • Attract, train and retain top-level talent to re-staff media planning and buying departments. The focus will need to be on bridging the gap between developing, and applying automation technology and providing high-level consulting support focused on brand growth to their clients. Presently, media agencies are not effectively competing for talent, whether in the context of compensation and or personal and career development options being offered by their non-traditional competitors.
  • Provide a framework for addressing the compensation conundrum. Whether this is in the form of cost-based or performance-based fees tied to project outcomes, commissions or hybrid remuneration systems, tomorrow’s successful media agencies will need to establish clear, compelling compensation systems. These systems will need to reflect value propositions that will differentiate them from an expanded base of competitors, while offsetting (to some extent) non-transparent sources of revenue that many media shops have come to rely on in recent years.

This will not be an easy path for media agencies, particularly for those that are hampered by legacy systems, processes and management perspectives that may limit their ability to more broadly envision and ultimately, assist client organizations addressing their needs and expectations.

Either way, the race is on, as management consulting firms are acquiring various marketing and digital media specialist firms and as media agencies raid the consultancies for personnel to build out their strategic consulting capabilities. The key question will likely be, “Which business model holds the greatest promise, in the eyes of the Chief Marketing Officer, for improving brand performance?

 

 

 

Economic Growth Projections Raise Concerns for Ad Industry

25 Aug

economyAdvertising agencies are finding that organic growth will be a difficult objective to achieve in the near-term.

One contributing factor comes in the form of marketing spending constraints on the part of advertisers. Why? Organizations are feeling pressure to control costs in the wake of lack luster market conditions that are limiting growth and reducing margins.

The key economic indicator driving advertiser concern is “slow growth” which is impacting many sectors of the economy:

  • GDP growth of 1.2% during the 1st quarter and 2.6% in the 2nd quarter (short of the sustained 3%+ growth rate promised by the White House)
  • U.S. retail sales, excluding auto and gasoline, rose 0.5% in July ’17
  • Fast-Casual restaurant sales fell more than 3% in the first quarter 2017
  • U.S. automotive sales have fallen for seven straight months (Jan. – Jul.)
  • Homebuilder confidence sank, posting HMI’s lowest reading in over 6 mos.

Two CPG giants have announced dramatic moves, which reflect the nature of this challenge. Unilever signaled its intent to reduce the number of agencies on its roster by 50%, while cutting the quantity of ads produced by 30%. Procter & Gamble Co. indicated that it would trim $2 billion in marketing spend over five years as part of an enterprise wide expense reduction initiative.

It is worth noting that there are motivations beyond “cost reduction” driving these decisions by advertisers. Consider fast-food giant McDonald’s, which earlier this year trimmed the number of agencies that it works with from 60 to fewer than a dozen. Their goals included streamlining marketing and improving the consistency of their output… in addition to reducing expenses.

Unfortunately, the impact of slower spending by advertisers is being felt on Wall Street. According to an August, 24 article in the NY Times, WPP which had earlier cut its revenue forecast saw its share price decline by 10.9% in London, with Omnicom Group and Interpublic Group falling 7% and 6.3% respectively in the U.S. and media stocks are generally lower as a sector.

Interestingly, advertisers have made a conscious decision not to fuel marketing spend to counter slowing sales, but to cut spending to protect margins, which is particularly concerning to the ad agency community.

With increased competition from non-traditional players (i.e. management consulting and technology firms) and the continued fall-out from an industry transparency crisis, the lack of confidence on the part of marketers regarding advertising’s ability to drive profitable revenue growth is certainly a worry.

Whether or not this slowdown in organic growth on the part of ad agencies portends a slump, remains to be seen, but at the very least the macro-economic uncertainty will serve to increase industry volatility. Perhaps the industry can find some solace in the words of Yogi Berra the hall of fame catcher and manager of the New York Yankees: “Slump? I ain’t in no slump… I just ain’t hitting.”

 

 

Does Anyone Really Want Advertisers to Solve the Attribution Dilemma?

14 Mar

conspiracyIt has been decades since the concept of Marketing Mix Modeling (MMM), the forerunner to Attribution Modeling, was introduced. The concept was relatively straightforward, marketers would apply statistical analysis to sales and marketing data to quantify the impact that each element of the marketing mix had in driving brand sales and profit. Once the causal relationship had been modeled, marketers would then be able to accurately forecast outcomes and inform resource allocation decisions.

While the concept may have been straightforward, the solution, for most marketers, has been elusive. Why? First and foremost, MMM has some inherent challenges, particularly when it comes to quantifying the impact of longer term brand equity development tactics versus those focused on short-term sales. Secondly, these models have not fared well in accurately assessing the impact of various media types on outcomes to assist in refining allocation decisions.

Fast forward to the late ‘90’s when we experienced an explosion in online media, the birth of e-commerce and the introduction of “Big Data.” The emergence of digital media and the attendant level of data that marketers where now able to gather led to the launch of “Attribution Modeling.” The goal, to assess and quantify what marketing and media touchpoints influenced an advertiser’s target audience, and to what extent, across the purchase funnel in an effort to optimize media spending across the ever expanding gamut of media alternatives.

While there are multiple variations of attribution models to consider, most marketers have relied on single-source attribution models, often using a “last click” approach which assigns responsibility for an outcome to one event. While simple, this flawed approach to attribution modeling gives too much credit to digital media, at the expense of traditional media and other marketing touchpoints.

Sadly, for advertisers that are doing both MMM and Attribution Modeling, it is rare that the feedback from these related, but different approaches synch. Further, there remain audience delivery measurement (i.e. cross-channel measurement), multi-touch attribution challenges that introduce a layer of complexity that drives up the cost of attribution modeling.

That said, since the onset of these two modeling tools being introduced, the industry has dramatically evolved its data gathering capabilities, enhanced CRM and DMP capabilities, conceived of and launched programmatic media buying, where algorithms have replaced media buyers and now we’re seeing the use of artificial intelligence bots, such as Adgorithms’ “Albert” that can plan and place media and create content. Heady stuff to be sure.

This got the cynic in me thinking; “Well if we can master all of this from a technology perspective, surely we should be able to cost efficiently and effectively master attribution modeling.” That led to idle speculation about whether or not the ad industry really wants advertisers to solve the attribution modeling dilemma?

After all, what if John Wanamaker was wrong? What if more than half of his ad spend was wasted? Remember, the marketing and media choices available to him in the 19th century were considerably more limited than those available to advertisers today. Would accurate attribution models eliminate some of the following marketing and media options from consideration?

  • Television
  • Radio
  • Magazine
  • Newspaper
  • OOH
  • Cinema advertising
  • Product placement
  • Direct mail
  • Email
  • Sponsorships
  • Online display
  • Online video
  • Podcasts
  • Paid search
  • Organic search
  • Mobile
  • Social media
  • Native advertising
  • In-store advertising
  • In-store displays
  • On-package advertising
  • Trade promotions
  • Price promotions
  • Couponing
  • Affinity marketing
  • Affiliate marketing
  • Applications
  • Earned media

Crazy. Right? Reminds me of a quote by the American journalist, Gary Weiss:

“One problem with the focus on speculation is that it tends to promote the growth of the great intellectual cancer of our times: conspiracy theories.”

What do you think…

 

Is the Agency Holding Company Model Viable Going Forward?

19 Oct

dreamstime_m_35343815The pursuit of excellence is less profitable than the pursuit of bigness, but it can be more satisfying.” 

 ~ David Ogilvy

It is not our intent to suggest that scale does not have its advantages. There are multiple instances, within the professional services sector in general and specifically within the ad agency community, where size translates into meaningful benefits for clients.

That said, since Papert, Koenig, Lois went public in 1962 and other advertising agencies soon followed suit, the ad industry has undergone dramatic change. Ad agency IPO’s begot an uptick in agencies acquiring other agencies, which Marion Harper, CEO of McCann Erickson pioneered with the formation of The Interpublic Group of Companies in the early ‘60’s. This was then followed by the “unbundling” phenomenon of the late ‘70’s and ‘80’s.

Fast forward to 2016, where the top five agency holding companies; WPP, Omnicom, Publicis Groupe, Interpublic Group and Dentsu account for over 70% of the world’s estimated 2016 ad spend of $542 Billion (source: eMarketer, April, 2016). Further, each of these holding companies have broadened their acquisition strategies to further penetrate the larger $1.0 Trillion global media and marketing services category.

As a result, the portfolios for the top five agency holding companies contain between dozens and several hundred firms covering a myriad of marketing disciplines including, but not limited to:

  • Creative agencies
  • Media agencies
  • Digital agencies
  • Social Media agencies
  • Brand activation firms
  • PR firms
  • Relationship management firms
  • Programmatic trading desk operations
  • Research and audience measurement firms
  • Media properties

It is clear that the agency holding companies have successfully pursued and achieved “bigness.” The question is; “Has the holding company model achieved “excellence?” The answer may well depend on which stakeholder group one belongs to. Shareowners will likely have one viewpoint, suppliers and employees another and clients perhaps yet another perspective.

In the early days, the primary role of the holding company was to pursue efficiencies across their agency portfolios, while leveraging cross-agency synergies and driving strategy across their portfolio firms. Four decades later, this has evolved into holding company “agency” solutions consisting of cross-firm, multi-disciplinary client service teams served up to the holding companies top global clients.

Yet, the holding companies are struggling to define and evolve cultures, eliminate inefficiencies and break down silos across the numerous agency brands and marketing services firms that they have acquired. All while wrestling with issues and opportunities tied to the rate and rapidity of technological change and its impact on the business of creating and placing ads and not least of all… technology’s impact on consumer media consumption and purchasing behavior.

Today, the agency community is facing challenges related to attracting and retaining talent, evolving remuneration systems and regaining advertiser trust, all while being mired in a very public dispute with advertisers, publishers and ad tech providers regarding the issue of transparency.

Simultaneously, serious competitors have emerged, threatening the ad agencies stranglehold on advertising, media and marketing services. Consulting organizations such as Accenture, IBM Interactive, Deloitte Digital and PwC Digital now offer comprehensive, end-to-end consumer solutions, which include branding, graphic design, creative and media services to complement their analytical, strategy consulting, enterprise digital solutions and customer experience design skills.

This new breed of competition has monolithic brands, established cultures and highly trained, intelligent, flexible global workforces. Also looming on the competitive horizon are firms such as Adobe, Oracle, SalesForce, Facebook and Google that continue to focus on serving up marketing services and support to advertisers on a direct basis.  

Perhaps most importantly, the ad agency holding companies may not control their own destiny. At least not to the extent that they once did, when serving as valued, trusted advisors to their clients providing high-level strategic support and maintaining solid C-suite level relationships. Further, advertisers today have shown an openness to evaluating alternatives to the traditional client/ agency model, which has favored the aforementioned consultancies, technology and media firms along with in-house solutions.

It is certainly too soon to count the holding companies out, as they remain a formidable force in the industry. The question is can holding company leadership successfully chart a new course for leveraging their scale and talents to boost their relevancy in the years to come. What advice might one of the industry’s most iconic leaders offer to his holding company contemporaries?

“Leaders grasp nettles.” ~ David Ogilvy

 

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