October 2016 marked the 15th AdForum Worldwide Summit, an invitation-only event that attracted 23 consultants from nine countries, who saw presentations from 36 companies over eight days. This year, the event included Los Angeles and SF/Silicon Valley in addition to New York, and encompassed management consultancies, entertainment companies, publishers, and pure tech plays as well as clients and agencies.
One lasting impression was that it was less about the ‘what’ this year and more about the ‘how’: How clients and agencies are tackling the challenges of an increasingly fragmented, and sometimes fractious, changing market.
Those that impressed were those that replaced “we can’t because” with “we can if”, and arrived at innovative new ways of thinking and new ways of working.
Here, in part, is what we observed:
Three pervasive client fears
The three things keeping clients awake at night are:
- Transformation and innovation: Clients are desperately trying to ensure that they will not be disrupted by the Uber or Airbnb of their category. They are in a race to offer innovative new products and services to align with where their customers have shifted.
- Retailer relevance: Retailers are facing a market-share fight from the likes of Amazon and Net-a-Porter. And as consumers increasingly buy things online, and even faster with their phones, the threat to the traditional retail model intensifies.
- Communication and connection: Marketers are grappling with increasing clutter, and at the younger end of the spectrum, limited media channels and increasing irrelevance of messaging. Reaching this audience requires a combination of cultural relevance and platform fluidity to ensure that messages connect and engage—a new challenge for many marketers.
The emergence of 'Content 3.0'
In 'Content 1.0', we saw big, expensive content productions. 'Content 2.0' was about producing content at scale, and affordably (cheaply, in other words). Much of this content was transactionally positive, but tactical, rather than strategic in supporting the Brand long-term. 'Content 3.0' is showing a maturation, and with the predicted explosion in content production, content is living further up the marketing food chain, often residing with the CMO. A more strategic approach to content has emerged, and in some cases when done right (think Red Bull, among others), content is no longer an expense, but a profit generator.
Publishers as 'frenemies'
Publishers such as Time Inc (The Foundry) and Hearst (iCrossing), have built large-scale media and content capabilities that not only support their ad sales but also, in some cases, have allowed them to walk away with agency-of-record gigs. Their unique combination of data plus the currency of the cultural insights available from their magazine publishers makes them a strong option for some advertisers.
The rise and rise of management consultancies
Anyone who thinks these are not a threat to agencies should go live in Jurassic Park. Unlike agencies, delivering cost efficiencies is in their DNA. And what client is averse to reducing costs? Moreover, consultancies have beefed up their end-to-end delivery, spending hundreds of millions on acquisitions, largely in the digital and design spaces. They are also becoming employers of choice for strategic, design, and digital talent. With the rapid decline of their traditional cash cow—audit—their need to create a new, sustainable, high-value practice area is business-critical.
Forget about collaboration. We are in an era of co-creation, and many are now providing co-location spaces for the various media and platforms to help facilitate this. Fragmentation presents both a threat and opportunity for agencies. Clients, more than ever, need simplification, support, and synchronisation to successfully navigate through the endless possibilities. The smart agencies are those that recognise the real value, over the long term, is in occupying the role of architect—even if that means occasionally sacrificing the role of builder.
The acceleration of holding company pitches
The increased fragmentation and ensuing confusion has led back to the old model of an integrated, single-source solution for some, pulling from within the resources of the holding company to build a bespoke offering. To quote Keith Weed, CMO at Unilever, when talking about rebundling: “There’s a real risk for brands that we end up working with individual agencies that maximise a particular channel rather than maximise the overall brand.”
Investing for today and tomorrow
The agencies that impressed were also not afraid to back themselves, making million-dollar-plus investments to be smarter, more efficient, and to meet client needs of cheaper, better, faster.
To that last point on investment, there has never been a more important time to invest in ‘smart’—especially on the people front. Client problems are bigger and more complex, and the solutions are needed more immediately. While smarter data and technology are enablers, the future belongs to those who can harness them in new and compelling ways to deliver not only new ways of thinking and working but also, most importantly, new ways of winning.
And ultimately, that is what matters most.
Jeff Estok is managing partner at Sydney-based Navigare. You can reach him @JeffEstok on Twitter.