Like many, I’ve had the opportunity to attend a variety of conferences and industry meetings over the past few months. As Board Chair of the 4A’s and Co-Chair of BSSP, I’ve been asked to speak at, shape the agenda of and simply learn from a range of gatherings.
The overriding messages have spanned from hopeful to dire. I believe I can say with some confidence that the death of the industry is not upon us. That said, it is clear we are well into the complete transformation of what it means to be in the marketing services business, whether as an advertising agency or another player in the ecosystem.
Back in the spring, I was invited to speak at the ANA’s Advertising Financial Management Conference, where I presented a summary of findings from the 4A’s Quantum Age of Marketing research. While there were fine presentations on the main stage, what really impressed me was the commitment expressed by many procurement professionals to employ new forms of compensation with their agency partners. I heard a willingness to move from current full-time equivalent (FTE) models with squeezed margins, to shared risk/reward performance-based agreements. Rapid and widespread adoption of hybrid models that align incentives and focus on value rather than cost is critical to solidify these relationships.
Also at this conference was a presentation on the main stage from what is now apparently the largest provider of advertising and marketing services in the world -- that’s right, a management consultancy. Have no doubt, they’re not coming; they’re already here in full force. And while it’s critical to actively manage the conflict of interest when it comes to consultancies leading media audits, managing media reviews while also offering programmatic buying services, these new entrants may actually help push the industry towards positive change. If smart, surviving agencies improve their business strategy and consulting capabilities in order to better compete, their average fees will increase to be more in line with competitors. (This may also result in declining average hourly rates of consultancy marketing services practices.) Not necessarily the doom and gloom scenarios for agencies that we’ve heard over the last few years based on a new competitive set.
Every gathering (whether on a beach or in a cineplex) relies heavily on the ideas of industry and business model disruption. Generally, they are cautiously optimistic, offering advice, examples of new ways of working, or justification for enormous acquisitions that will provide competitive advantage.
But of course, a conference sponsor’s agenda will often come through, whether implicitly or overtly. I’ll proudly acknowledge that the 4A’s will tout the organization’s industry advocacy (business and legislative), best practices identified among members (yes, that includes pricing transparency throughout the media ecosystem), training and talent tips, all while reminding attendees of the value of membership. The ANA rightly and consistently advocates for its members’ growth strategies, including best practices for using in-house marketing services (spoiler alert: as in working with any external partner, success comes from clearly defined scopes of work and close collaboration between internal marketing services teams and external agencies), as well as a clear and mutual understanding of contractual agreements and obligations between clients and agencies. One thing that rings true is that close and continued collaboration between industry organizations like the 4A’s, ANA and the IAB is essential for establishing client and agency growth.
That said, other industry gatherings have offered a decidedly different outlook.
I recently attended a small, private conference in San Francisco, where the tone wasn’t even cautiously optimistic. This is an annual event that assembles Bay Area agencies to hear from various industry luminaries. The Ad Contrarian delivered his usual rant, only somewhat paraphrased as "no one in digital advertising has any idea what the hell they’re doing." Separately, one industry big thinker phoned in a presentation (literally) that managed to explain both the holding companies’ stagnation and the British and American political quagmires based on an epochal Long Cycle-- which, apparently, we may well be near the end of.
Sometimes we need to look beyond our own industry’s perspective to find promise and a glimmer of hope. I found it during the 11th annual National Summit for Courageous Conversation, a gathering of equity leaders sharing best practices and results from around the country in the effort for racial justice and equity. It was here that I saw 18-year-old Sydney Johnson, the first keynote speaker of this conference in 11 years who was a student. Sydney, an aspiring future Attorney General, inspired and rallied the 1000+ audience with her story of challenges, barriers overcome, daily injustices, ambition, commitment, perseverance and an inviolable dedication to who she is and who she is not.
Sydney is changing the world. Surely you can help change your industry.
Greg Stern is the 4A’s board chair and BSSP founder and co-chair.