Advertising In 2020: The Industry's Key Players Weigh In With Divergent Strategies
Comment Now
Follow Comments
This article is by Brian Sheehan, associate professor of advertising, S.I. Newhouse School of Communications at Syracuse University. He is a former regional CEO of Saatchi & Saatchi in Los Angeles, Tokyo and Sydney. He is the author of “Loveworks: How the world’s top marketers make emotional connections to win in the marketplace.”
Understanding changes in the advertising industry can be difficult, not because it is hard to analyze, but because there are so many distinct points of view. There are holding companies, creative agencies, digital agencies, media agencies, and public relations agencies that all aspire to lead strategic communications with their clients. These companies each approach the advertising marketplace from the perspective of their unique strengths. They sometimes cooperate, sometimes complement, and oftentimes compete with each other. As a result of the digital revolution, they are increasingly building similar skill sets, smashing the barriers that kept them distinct.
With the goal being to look at the impact of major trends that are transforming the advertising business today, I sat down with the following industry heavy-hitters to learn more about their diverse perspectives:
- Maurice Lévy, CEO, Publicis Groupe
- Mike Cooper, CEO, Phd Worldwide
- Kevin Roberts, CEO, Saatchi & Saatchi Worldwide
- Bryan Wiener, chairman, 360i
- Richard Edelman, CEO, Edelman
All five executives were asked the same three questions. Their answers illustrate where current and future visions of the industry are commonly perceived–or very different.
What will the advertising landscape look like in 2020?
Lévy: “Looking at 2020, I think fragmentation might be strongly mitigated. All agencies now have digital to a certain extent. Take our three networks—Publicis Worldwide, Leo Burnett and Saatchi & Saatchi. They all do digital campaigns, and think digital from scratch, not merely translate analog into digital advertising.”
Cooper: “Five years ago there was a lot of talk about consolidation of all client businesses into holding companies, for example. I feel at the moment, however, that there is a strong gravitational pull in the opposite direction. This is because the business has become so much more complicated, and in particular media has become exponentially more complicated. Major clients have a traditional media requirement, a digital requirement, a social requirement, and even a content requirement. You don’t get everything you require under one roof. So, for 2020, I see things being even more complex, dynamic, and fun! The agencies that have a strong collaborative streak will be the ones who win.”
Wiener: “There has been a consumer revolution led by digital. However, the advertising industry has not yet been disrupted as much as I think it should have been. Companies like ours have disrupted the fringes but not yet the core. By 2020, we will see a tipping point where the floor literally falls out of the current model.”
Roberts: “In a word, consolidation. For clients this has been an exciting four- or five-year period. However, the extreme complications of digital have led them to hire more marketing people to do more tasks. Many of those tasks are purely coordinating and managing all of their marketing suppliers and processes. But their budgets are not increasing. Between now and 2020 more clients will want to simplify the process and shift those coordinating functions to an agency. They will want different relationships, sometimes one-stop shop, sometimes a brand agency leader model, sometimes a general contractor model. But they need to get more efficient.”
Edelman: “At Edelman, we will have a combination of the classic PR business with the addition of strong digital and research. Public relations focuses on opinion formers, but the new paradigm is not the pyramid of influence we used to have. It is now a diamond of influence. As much important information is coming from the bottom as the top. It’s not just professors at Harvard, it’s that mom blogging.”
First it was the digital revolution, then the social media revolution, now the mobile revolution. What revolution is next?
Lévy: “The revolution will be twofold: connected devices and the ‘Internet of Things.’ We all agree on what tomorrow is likely to be, more social, more mobile, more big data-driven and more skewed towards the emerging markets – but this doesn’t make a revolution. However, I do believe that the combination of existing tools (digital, analog, content) and new behaviors (self-marketing, sharing, acts and not just ads) is starting to trigger the two next big things.”
Cooper: “Everyone is talking about the data revolution, and we are still in the early stages of that. But I get tired of the focus on the data itself. It’s not about the data; it is about the insights you glean. So, you could say the next revolution will be the data-driven insights revolution. Data has led to real-time bidding and programmatic buys, which are having a big impact on our business. We are spending less resource on the buy itself and more on analysis, innovation, and creativity. This is great for our business and for our clients.”
Wiener: “I prefer to talk about what is happening now because it will define the future. We are in the middle of a consumer revolution. It has happened and it is happening. Consumers want to consume whatever they want on whatever device they damn well please. What will be revolutionary is when we as marketers start actually connecting with consumers the way they connect with content, instead of shoving the old model down their throats. The traditional creative agencies are in trouble. I’d rather be a media agency than a creative agency in the future.”
Roberts: “The revolution is connectivity and speed. Steve Jobs said creativity is just connecting stuff. The winners will connect digital, social, and mobile with storytelling, story sharing, and the idea. Nothing is as revolutionary as great content connected to all digital platforms bloody quick and bloody cheap. He who connects the content best with consumers, where they want it, with the right cost model, will win.”
Edelman: “One is populism. By that I mean that people don’t trust institutions like government or even brands the way they used to. Wherever you measure it, there is a 10-15-point drop in trust. We are seeing a ‘pro-social’ revolution. People trust each other, peer-to-peer. They want what is good for their communities, and the community at large. This leads to an emphasis on values over just value. Companies have started to internalize this and communicate it.”
Some of the best technical minds are swallowed up at high salaries by Silicon Valley. How important are tech skills for the future of advertising, and can you attract (and pay market price for) the right people?
Lévy: “It is true that the Valley is like a magnet to well-paid young engineers and brilliant minds, but I doubt this is mainly about salaries luring people. Silicon Valley is foremost a mindset – ‘nothing is impossible,’ ‘let’s try it, let’s do it’ or Google’s motto ‘don’t be evil’ – that historically yields unthinkable breakthroughs: the personal computer, the Internet, search engines, and so forth. The same spirit is fueling the success of the Silicon Wadi, the Israeli Silicon Valley, where salaries are much lower. Money comes second. At Publicis, we are extremely confident regarding our ability to attract the right people, courtesy of great ideas and appealing long-term incentives.”
Lévy: “It is true that the Valley is like a magnet to well-paid young engineers and brilliant minds, but I doubt this is mainly about salaries luring people. Silicon Valley is foremost a mindset – ‘nothing is impossible,’ ‘let’s try it, let’s do it’ or Google’s motto ‘don’t be evil’ – that historically yields unthinkable breakthroughs: the personal computer, the Internet, search engines, and so forth. The same spirit is fueling the success of the Silicon Wadi, the Israeli Silicon Valley, where salaries are much lower. Money comes second. At Publicis, we are extremely confident regarding our ability to attract the right people, courtesy of great ideas and appealing long-term incentives.”
Cooper: “To date this has not been a big problem. We work very closely with Google, Facebook and Twitter, and we have been able to keep pace. We are able to attract people who are genuinely interested in the technology. They are fascinated by media advances, and by social media. They have the skills and expertise to understand the space. It is not just something they do as a job. We don’t need everyone to be an engineer. We are an industry of ‘creative technologists.’ People joining companies like Phd love technology, but they want to express themselves creatively.”
Wiener: “It is hard for agencies to get the best technical talent. One thing to do is not to look in New York or San Francisco, where the competition is fierce. But that is not really the main issue for agencies. It is a broader issue. It is about an entrepreneurial mindset. It is hard to find really talented, really bright, really motivated people who want to work for large corporations, period.”
Roberts: “I would argue with the premise. I don’t think the best technical minds are going to Silicon Valley. I just got back from Los Alamos where I met two and a half thousand PhDs who are streets ahead of many in Silicon Valley. They are working at a fraction of the cost because they believe in the cause and the purpose. The people we are looking for at Saatchi & Saatchi are ‘emotionally technical.’ They are not code writers. We will hire the digiterati; they are creatively driven people with technical skills that are more than good enough.”
Edelman: “There has been progress over the years in establishing our value and improving the fees that we are able to charge. We can get what we need. But more important, I don’t think PR will ever rely more on data than on instinct. That is true for advertising too. The Old Spice guy was instinct, not data. The advertising holding companies are to a degree going gaga over data.”
In the end analysis, the top players in the industry are engaged, excited by change, and actively involved in setting their agencies’ courses for the future. There is no perceptible fear. But there are widely divergent strategies. The success of those strategies will ultimately decide the big winners and losers between now and 2020.
