Why brand owners & consumers will benefit from the revolution in the marketing industry….
Let’s face it, the brand marketing industry is in a mess. It’s hardly the last days of the Roman Empire, beset by forces within and barbarians at the gates, but we are experiencing our own cycle of disruption, probably the biggest the marketing industry has experienced. All the old models – media, creative agencies and brand owners – are creaking under the strain of divergent forces at work. We’ll come out of the disruption looking very different from today – with huge benefits for many – but there’s going to be a chaotic middle period of confusion and unrest. During which brand marketers and partners at agencies and media owners should embrace the chaos with a smile – or at least a forced grimace. Because better times are coming.
Let’s look at those models in turn. Creative agencies, at least the holding company version, are in a tricky spot. Disintermediation is becoming rife as brand owners find alternatives to the ancient AOR model. Three drivers are at work here:
- Firstly, marketers are balking at the agency agreement’s built-in costs. The 300 percent mark up was always wince-inducing but is now becoming totally unworkable given unrelenting budget pressures and the emergence of other alternative creative solutions. We need a new deal.
- Secondly – and admittedly this is anecdotal – talent is leaving the big agencies in droves. Some of the best creative teams I’ve known have set up their own shops and seem to be adapting to life in a project-by-project world very well. Meanwhile, with the bigger agencies we’re still playing the old game of musical chairs as year after year your agency team gets replaced with the next set of shiny new faces.
- Thirdly and perhaps most profoundly, creative agencies are struggling to cope with the explosion in the diversity of ‘content’ that brand owners demand. Multiple channels, formats, lengths, quality, sources all combine to produce a soup of messages and imagery that must bring tears to the eyes of even the most hardened planner. And we brand owners, with our silo’d structures and petty control issues, must only make it tougher to knit together a reasonable proxy for a brand narrative.
Media agencies, though becoming the most important power brokers in our industry, are struggling to cope with brand owners’ demands for full programmatic buying across all channels and formats. That particular utopia is a long way off but the mere sniff we’ve had of the promise of programmatic is enough for us to stand on desks in client cubeland and scream for more. Media agencies may be equally evangelistic but seem to be stymied by the unwillingness of publishers to turn their models upside down, fearing content of commoditisation. Nevertheless, we are crossing the chasm on programmatic; those holding back risk being by-passed by advertisers wielding DMP-driven algorithms and with eyes wide open to Amazon video, Hulu, YouTube, and the like. I keep hearing from publishers that brand owners still want to spend 50% of their marketing funds behind TV and print based on broad and weak target definitions such as ’women 18-49’, but, whether they are right or not, it’s a denial of reality akin to the band playing on as the Titanic slipped under the icy waves.
Meanwhile, for brand owners, it’s the very best of times and the very worst of times. Personally, I’ll go with the very best of times. When else have we had access to such a fantastic set of behavioral and purchase data? We have opportunities to tell our brand story across myriad formats and channels, and inspire our consumers to do the same. We can connect with people on values inherent in our brand that great story-telling can reveal. We can, if we do it right, insert ourselves into the cultural dialogue and be welcomed for that. We can activate our advocates with unbelievable speed and reach. And operationally, we have new systems such as Percolate to bring us control, consistency and visibility. And there’s emerging models of agency engagement that are set to be game-changers in both cost-reduction and in liberating the best creative talent to work on an ever-widening choice of projects.
Bloody marvellous, right?
Well it’s admittedly not that rosy. Like everyone else, brand owners are struggling to adapt to the changes taking place. Talking to my peers, we’re all kept up at night worrying how we’re going to produce ‘content’ that people actually, really, want to consume and that delivers concurrently a seamless, compelling brand/product message. And how to cope with conflicting or unclear data and measurement systems that fail on attribution. How to maintain a coherent strategic thread across the fast-growing mosaic of touch points while our marketing budget remain cost-constrained. How to find the creative and strategic talent that our agencies often struggle to deliver. How to drastically carve out old model costs; even when we use ‘boutique’ agencies in place of AORs we often still find ourselves paying large overheads. Which of the 10 calls or emails a day from adtech and martech firms do we respond to. And let’s say it quietly, the spectre of ad blocking and ad fraud haunt our dreams…
I believe the answers are pretty clear. Let’s embrace change and:
- Move to value-based models where brand owners, creative talent, media talent and publishers come together in a kaleidoscope of co-created content paid for on the basis of value and results rather than hours, labour rates or impressions. Let’s cast off measures like CPMs and instead focus on attribution-based value delivery to target audiences.
- Encourage and incent our creative partners and media partners to work with brand owners as a single team, inspiring the creative content that is judged not on it’s category performance but on its ability to get consumers to sit up and take notice.
- Bring brand strategy in-house as a client-side discipline staffed by top-quality brand strategists, deeply insightful data engineers and creative leads supported by diverse teams of independent creative partners who provide their talent on a win-basis, applying their skills in creating many times the volume and effectiveness of the content produced today as a result of excess costs being driven out of the system. And let’s be clear, brand owners will compete for the best independent creative talent based on the brand owner’s vision, strategy and willingness to take creative risks.
- Leap into a world of real-time, programmatic content distribution, embrace new channels of delivery and encourage those connecting offline with online – such as linear television’s attribution to media investment. There’s plenty of fabulous content we brand owners want to associate our message with, whether that’s first-class ‘TV’ entertainment delivered in linear or digital form across traditional or new providers, brilliant news programming and analysis from the CNN’s, New York Times, Financial Times, BBC World and so on. As always, the best content wins; it’s always been that way.
Some of us are doing much of this already. There’s a way to go though and some turbulent waters to navigate. The destination however, is in sight and looks appealing.
Pete Boland is the Senior Vice President at Charles Schwab responsible for Brand Strategy. He is also an Adjunct professor of strategic brand marketing at Hult International Business School (San Francisco campus) and a Board Member of Red Tricycle inc, the leading US digital media brand in the parenting space. Previously Pete was Managing Director and Head of Global Brand at BlackRock an Director – Global Brand at both Visa and Microsoft. Follow him on LinkedIn.