The year advertising gets real – and what we’ll need to do to get there
“Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing.” Arundhati Roy

The advertising industry, like countless others, is bang in the middle of a wholesale shift. The tech-tonic plates have separated, merged, crashed, crunched and sunk. The media landscape has fragmented, to the point of atomisation (with each one of us a media node) then re-coalesced. Reformed.

Like the energy and matter of exploding stars goes on to form new ones, the remnants of the old media landscape have reformed around new suns. A handful of apps and social platforms are the new attention magnets; Facebook, Snapchat, Netflix, Spotify, Amazon, et al.

An unsophisticated market

Culture, business, society and life itself are all shifting right under our feet. Yet, most marketers and advertising agencies are still going about the day-to-day as if it is business as usual. Particularly here in Australia.

We consume our information in myriad diverse ways, but you wouldn’t know this if you looked at the structure of agencies today.

Large agencies, especially, can’t afford to give up pushing expensive, yet increasingly irrelevant and ineffective TVCs. It’s the only way they can hit their holding company targets. So they keep selling them to unsophisticated clients. They take cold comfort in Mark Ritson’s polemic, kidding themselves that everything is going to be OK.

88% of Australians use their devices whilst watching TV. It doesn’t matter what percentage of your audience watches TV when the default behaviour is to pick up your phone and scroll through your feeds during an ad break. As we’ve learned with Trump and Brexit, there are significant consequences when we fail to take into account the quirks of human behaviour when looking at data that confirms our biases.

There is a huge adjustment on the way once the market becomes sophisticated. Watch this incredible interview at Recode with Gabe Leydon and see what is in store for just the media side of our industry. It starts slowly, but it gets going at about the 9:45 mark. Compelling viewing.

Whole empires will crumble, rendering the landscape unrecognisable. And we all need to start jostling for position now. As Kevin Kelly says about the inevitable — if you embrace it, you can shape it.

Predicting the future may be a fool’s errand, but given the current state of play, it is a worthwhile one. I’m not going to add to the millions of posts about the death of the agency model. But, I do want to throw my hat into the ring with my take on what might run up against it.

Decentralisation

The best solutions for a distributed and decentralised world won’t be housed under one roof. The agency model as it currently stands follows traditional corporate structures and linear processes. Just adapted for a creative industry. It worked fine for the industrial age. A little tinkering and restructuring has allowed it to stagger on as the information age took hold.

The reality of now and what we’re heading into calls for something else entirely. There can be no re-training, re-tooling, re-structure or re-anything that can save it.

We need to start from scratch.

This shift to decentralisation and distribution will only speed up. Soon enough the market will become sophisticated and adjust to reflect reality. Once it does, we’re likely to end up with the market sustaining two additional, but very different models:

  1. Much of the agency function and its specialist talent are absorbed into global consultancy oligopolies (Deloitte, Accenture, PwC et al.)
  2. A co-operative model of distributed and autonomous specialist networks emerges

The key here is that both of these new models will be nodal in nature.

The global consultancies are already on an acquisition spree. Picking up creative boutiques, digital shops, strategy outfits content creation studios. And they are plugging these shops into their big data and analytical smarts.

They are also partnering with Google and Facebook. Not only to reach their customers but to improve their experience and build relationships. Even TV and agency cheerleader-in-chief Russel Howcroft just recently threw his lot in with PwC.

Michael Farmer suggests these consultancies are a significant threat to the agency business model. The industry is on notice. Agencies representing global brands will be pitching against these guys soon. And that presents a very real problem, given the difficulties faced by agencies attracting and retaining talent right now.

“Since agencies [owned by holding companies] have to deliver profit margins, they are downsizing every year,” says Farmer. “So they are doing more work, with fewer, more junior people at a time when their clients’ need for profitability has never been greater. As a result, they are destroying their capabilities at a predictable rate.” Michael Farmer

Michael Farmer also sees the opportunity this new landscape has created:

“I see a large void in the marketplace which I think smaller agencies, who are able to be more emphatic to solving this brand problem and who are less wedded to outdated notions of creativity, have a real opportunity.” Michael Farmer

Bilyan Smith echoes this sentiment, providing a glimpse of what the future might hold:

“Perhaps new entrants that are not ad agencies at all in the conventional sense, but perhaps collectives of start-ups, freeform teams, individuals, covering a broad and flexible spectrum from business, brand and creative strategy via a range of execution capabilities, media, content…?”Bilyan Smith

Once you see it, you can’t unsee it.

And once you do, the way we’ve all been approaching our craft seems archaic, antiquated even. All of this will bear down on agencies to change their ways and match their output and outcomes to the new reality.

Classic strategies + evolved methods for new platforms

The age old strategies still work. But agencies will need an evolved approach that allows them to effectively apply those classic strategies to the upswell of new technologies and platforms. And ensure that they do this in consistently ingenious ways.

Agencies will need to:

  1. Listen more (sorry Creative Directors, you are no longer the arbiter, the crowd is)
  2. Get from problem to solution quicker (flexible frameworks, and sprints will replace laborious months-long strategy boondoggles)
  3. Experiment as default (not just 10%, with the whole lot)
  4. Ensure spend reflects attention (TV is still being watched, but the ads aren’t. Facebook, Instagram and Snapchat will continue to rake in attention and therefore increasing ad dollars)
  5. Do more with less (budgets will get tighter, will need to perform better and be tracked to the bottom line)
  6. Do more, period. (no point in spending $200k on a film when the video beneath it filmed on iPhone gets all the attention. Do 100 x $2k or 10 x $20k videos instead)
  7. Which will pave the way for full-stack and fast-craft creatives (the new breed of ad creative will take a brief in the morning, then brainstorm, curate, film, edit and post up the short form content to Facebook with a targeted ad spend all in the same day)
  8. Work with social creators rather than Influencers (collaborate with social creators to deploy social content with impact, rather than meaningless product placement)
  9. Collaborate more (don’t just pay money to feature your logo, contribute to culture rather than piggybacking or hijacking. Find aligned partners and create something amazing, where 1+1=3)

And maybe, just maybe, 2017 will finally be the year where the ad industry gets real.