Transformation in an era of short-termism

Agencies have not really adapted in recent years following the big decoupling of media from the ad agencies.

We’re all aware of the massive challenges facing clients and agencies in attempting to negotiate the highly volatile and changing world. A VUCA (volatile uncertain complex and ambiguous) world in which having an emergent and fluid strategy is the only real option.

The issues we need to get to grips with are dominated by technology, but within our communications world we can also add the erosion of consumer trust in advertising and the demand for greater diversity and equal representation, both in advertising messages and the talent within our industry. These are issues that in my new global role at Group M I’m eager to tackle head on.

And a key issue impacting marketing and media from the broader business world is the trend of short-termism, which was revealed in the most recent IPA Bellwether report as having a significant impact on advertising spend, with digital spend in marketing budgets up the greatest extent in a decade.

The move to short-termism is highlighted in impressive new research from Enders Analysis, commissioned by marketing body for consumer magazines, Magnetic, which reveals just how much impact short-termism in corporate behaviour is having on marketing.

The Enders report exposes the need to establish a better dialogue with company chief executives and boards, using smarter financial evidence to help land this, questions over the roles and interactions of the media and creative agencies, and whether marketers are "addicted to the crack" of short-term, response-based communications.

The Bellwether exposes one of my biggest concerns – the idea that marketers, driven towards short-term goals set by their board, are addicted to instant gratification. As long as there are shareholders to appease, the board will always be won over by quick 'last click' wins and we will see long term losses but not in what are increasingly short tenures of chief marketing officers or chief executives. 

We also have to take a hard look at our own setup. We agencies have not really adapted in recent years post the big decoupling of media from the ad agencies. That was right then, is it right now? If not, how else do we rethink the model?

Media agencies are now increasingly sophisticated: we can see the data, optimise, and reinvest in digital channels quickly and efficiently. As a result, we are able to be super precise on short-term performance. Meanwhile planning departments at creative agencies tend to still look longer term or with a brand lens. How do we better connect these lenses? We must bridge the two models to encourage a stronger link between shorter-term thinking and longer-term strategy.

My new role at Group M will seek to work out new models, ways of working, more fluid examples of what WPP calls horizontality… And this need to flex is a core skill when we look at the broader business context; the transformation we are experiencing is profound, the World Economic Forum calls it the "fourth industrial revolution", a new era characterised by huge technological change and one that requires two key skills to succeed: collaboration and agility.

As agencies, we feel a great sense of responsibility in guiding clients through this transformation, as we often stay longer with the brand than some marketing directors.

If we want to stand up and be counted, we should be thinking about taking greater ownership of strategy and providing clients with absolute focus on what works both in the short-term and the long-term.

Providing full-service solutions in pitches is one practical solution, but let’s not be too prescriptive. Returning to the point about collaboration and agility, we must work alongside advertisers to create tailored and flexible models that work better for clients in this competitive business environment. This helps shift the brand dial upwards while maintaining strong and immediate results.

Short-termism has hit agencies too. As the Enders study shows, the average partnership between brand and agency fell from 86 months in 1984 to just 30 months more recently, according to the IPA. This puts our ability to have a lasting impact on client business under pressure, but the development of our senior talent could hold the key to easing this.

In terms of winning respect at the top levels of the client organisation, right up to board level, it’s vital that we invest in our best senior talent as well as stronger training and development to ensure that we provide the diverse and representative field of talent that clients now demand.

I’m convinced we can work with client marketers and their boards on delivering growth short term and long term; growing an appreciation for long-term brand building and the true value of media environments and context. While an industry-wide response is required, clients need agencies to help them think differently and work smarter. I’m encouraged by the debate this report has started and look forward to challenging the way our whole industry works.  

Lindsay Pattison is chief transformation officer at Group M

 

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