Category / Business of advertising

by Ajinkya Pawar

The brown dwarf

Brown dwarfs are the universal in-between – neither a star, nor a planet. They were potentially stars, but failed short. They failed to shine. Unlike the sun, the nuclear reactions on a brown dwarf sputter unstably, sometimes being extinguished of that majestic fire altogether.
Its death is slow, degenerate. It contracts, cools, degenerates very slowly, forever.

Advertising industry is the brown dwarf of the capitalist 21st century.
It’s capabilities are falling short in the arms race for talent. It doesn’t pay to attract good talent at entry and mid-level. It won’t spend money to train the potentially great entry, mid-level talent either (almost every one is potentially great). So it’s stuck in a degenerative loop. It’s leaders spin furiously in their little cocoons at the top without affecting any change in the lives of people who actually get shit done. A lot of hot talk remains trapped inside air conditioned boardrooms.

Agency business is a good business with decent margins serving a need that is never going to go away. People will always need help with influencing others. But the ways in which people can be influenced changes with times. Other industries are stepping in and re-configuring the way people want, the way people seek and the way people connect. The tragedy is, the agency leadership still doesn’t get this. The margins are fat enough now for the leadership to remain complacent and live off the dividend. But the brunt of accumulating inefficiencies, incompetencies has to be faced by the entry, medium-level folks. As such, the best among them keep on leaving.

So this spinning circle jerk is contracting day by day, jettisoning the best and brightest among the young who feel – ‘i can do better than this’. This leaves behind the not-so-bright-but-cocky-enough-to-compensate folks at the center of accretion disk.

Unless agencies start paying, listening to and adopting ideas of its bright young folks, agencies are destined to deteriorate like a brown dwarf.

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by Ajinkya Pawar

The business of transformation

WPP is now a ”creative transformation” company.

I am cautiously optimistic about this facelift. I hope there is more to come. And that WPP will go beyond the facelift and the simplification. fingers crossed.

But…

After Ogilvy‘s ‘refounding’ and Publicis’ marcel attempt and now WPP’s structural simplification & brand identity ‘reveal’, it feels as if the creative industry is in serious short supply of imagination & ambition.

I guess, it will be worthwhile to understand WHY these agencies feel the need to change.

Tumbling down the priority list

Firstly, mass communications’ relevance to fuel business growth is in decline. Digital has opened up newer ways of creating products and reaching, engaging and servicing consumers. So businesses now have far more levers to crank growth, whereas in past it had just a few – mass communications being the most ‘scalable’. Now distribution, service and even products are scalable.
So the obvious implication for advertising agencies is to –
a. Accept the reality  that brand building remains important, but it is one among many things that a company needs to do. So premiumise our services, increase the value of creative offerings. After all, branding might not be essential to everyone, but it still remains essential to many. But we are not doing that.
b. Or accept the elevation of other service partners at the table. Consequently accept the declining share of client’s growth spends. And go find ways to ‘scale‘, reach more clients.
c. Or, grow capabilities to service newer needs of business growth.

The key thing here is to commit to a path – either of these three. If we try to straggle two paths, we are bound to falter. WPP, Publicis and the rest seem to be trying to straddle.
In this light, the ‘creative transformation’ doesn’t signal a strategy at all. It simply feels like an articulation to assuage fears of irrelevance. It is not committing to any one path. It is more of the same old. It is simply reducing silos, but still functioning with silos. It doesn’t understand true integration of capabilities. They seem to operate with the logic that to gain a capability, we need to simply add a department. But they have no point of view on enabling people with different capabilities to work together, learn together. This remains a crucial problem to solve. 

The incremental evolution perhaps is in the right direction, but not big enough, not fast enough. WPP, Publicis and most other creative agencies are bound to be turned into second tier vendors in the new economy, unless they fundamentally change the way they work.

Theater of precision

Secondly, digital tools create the theater of precision. Data gets sliced, diced, bundled, anonymized, aggregated, dimensionalised, granulated, distilled, contextualised… and so on. Much of it is useful, much of it isn’t. For now though, data enjoys the hype among CxOs that advertising enjoyed in the last century. Advertising relished in the indeterminate and chaotic nature of human creativity, while data gives a false sense of certainty and precision. In absence of scientific temperament, a theater of rationality is stealing the show. Advertising industry’s reluctance to engage with scientific processes meaningfully has given rise to a generation of clients who feel that the industry is opportunist at best, incapable-of-reason at worst.

The advertising industry needs to rationally dismantle both, the theater of precision and the theater of mystic creativity. It needs to stop acting as an opportunist salesman that uses complexity and mysticism to its advantage. The time is up for that. Scientific temperament can help gain confidence & value.

So my question is, how exactly does ‘creative transformation’ take place? what is the thesis? what is the scalable process here to deliver this transformation? Is there a precedent to this approach? How do we know that this strategy is superior to others in helping clients grow?

Instead of starting with a brand identity & design exercise, I believe WPP should have started with a rational approach to define a new way of working together, a new way of being more consistent with driving results.

Start: The industry needs to focus on their ability to create real value for businesses seeking growth.
Stop: Focusing on justifying our existence, articulating our way into relevance, feeding the parasites.

by Ajinkya Pawar

The sudoku problem and the delusion of conservative ad men

This is in response to Mr. Rory sutherland’s article about targeting in advertising. Read that article before reading this one.
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“By deluding everyone that the whole of advertising is reducible to “the efficient and inexpensive delivery of targeted messages” through the extensive use of data and algorithms, two companies have gained a multi-billion-dollar rent-seeking monopoly over the majority of advertising activity.”

– The extraordinarily persuasive Mr. Rory Sutherland in his campaignlive article.

Bang on. But right after identifying the problem correctly, he then completely misses the big picture.

1. Platforms are relevant beyond advertising. Agencies aren’t.
Yes, facebook and google create the illusion of measurable effectiveness of comms through targeting, even as it turns out, it is just as much a gamble as traditional media was. But Mr. Rory doesn’t comprehend the broader utility of these technological giants. They aren’t simply channels of communications. They are default platform of commerce, knowledge & social connections. They inform not just marketing but supply chain strategies, go-to-market strategies and even new product development. These platforms are fundamentally shaping the new era of business growth. The ‘sudoku’ like big picture consciousness needs to take this into account. It needs to take into account the fact that these platforms are fundamentally changing the way we work, we behave, we interact and we live.
So, my first moment of ‘wtf’ came when Mr. Rory thought that the multi-billion dollar rent-seeking was just about ‘advertising activity’. Either he needs to appreciate the far broader footprint of that ‘activity’ where creative agencies don’t compete or he should look for reasons within the creative industry for why we aren’t getting a share of any of that activity.
I don’t particularly like the tech giants myself. But advertising industry is no innocent minnow either. It has always been a morally grey industry. So for its statesman to target the tech industry while absolving itself of its failing fortunes, felt a bit weak. The sense one gets is “we don’t need to change, you should. we are not muddled in our heads, you are.”  Which is horseshit ofcourse.

2. False duality of Targeting/ Creativity:
I wholehearted agree that obsessing about targeting is problematic, not just strategically but even morally and hopefully eventually legally.  But with metaphors of sudoku and door man, he ends up creating a false sense  of comprehensiveness with targeting & creativity. Indeed he talks about sudoku – the big picture consciousness needed to solve the problem, but doesn’t take into account the big picture of advertising operations. We are way too busy advising businesses about their transformation to notice the need for our own transformation.

He essentially creates a false duality about targeting & Creativity. Advertising comprises of far more acts than that of creative messaging and targeting. As a matter of fact, technology’s relevance for advertising is precisely outside of these two acts – servicing, client feedback, HR, research, basic analysis even creative inspiration … all these tasks that support creativity can be improved with technology. And they can improve only by ‘breaking-down-to-manageable-parts’ approach. The sudoku metaphor, though very enticing feels wrong. The sudoku metaphor is relevant for big picture strategy or pure acts of creativity. But no other process beyond it. and there are far too many processes beyond these two processes in advertising.

3. The untold story about the doorman: So in Rory Sutherland’s piece, tech company automates the door and boom – end of the hotel. But in reality, there is a story after that. Unlike our industry, tech industry is notoriously good at improving with feedback. They are famously ‘forever in beta’. They would recognise the error, and plan ahead. perhaps by creating  gadget for the doorman to greet different patrons in different language. Perhaps, by creating a entry chamber that is even more secure and pleasurable to enter into. The possible improvements are endless with creative thinking.
What I am trying to get at is… tech will improve the processes that it can improve until no improvements are needed. And unless agencies get on with the ‘arms race of feedback led improvements’, we are doomed to get thrown out by the doorman like he would a bum.

4. Tech’s role in advertising:
Do clients want us to be more nimble, more responsive? how can it happen without tech?
Digital media is creating a Just-in-time and plug and play mentality for solutions. can we deliver solutions JIT and PnP without tech?
Agencies service just the largest corporates in the world. we can’t profitably service SMEs. Is that the world we want to be in where the biggest get unfair advantages of our talent? Can technology help agencies in servicing at scale?
Most of our time goes in idiotic tasks such as filling time sheets, arranging meetings, reworking forever due to bad feedback… Each of these tasks can be improved with tech.
We are using tech to reduce productivity actually – Take for instance the process of installing a font currently – raise a ticket, wait for technician, who installs it. the first two steps are completely unnecessary. but we do it, because we don’t take tech led improvement in processes seriously, even as we idolize Apple.
Most importantly, effectiveness of campaigns is still akin to picking a lottery ticket. There is no scientific algorithm to achieve right effectiveness. Similar to the problem faced by stock-brokers. But people like Mandlebrot have been suggesting scientific and a different approach to that problem. Maybe, there is much to learn for us from that approach. (Stochastic and as such programmable to an extent. but not anytime soon.

5. ‘Creativity’ has been agencies’ excuse for long to get away with their privileged complacency. Advertising agencies are too expensive,  unreliable and inaccessible. Tech will disrupt advertising agencies soon enough, because industry leaders echo Rory’s myopia.

And here’s the blueprint for that disruption – Agency as a platform.

by Ajinkya Pawar

2018: A good year to disrupt creative agencies

Two things happened recently, that have filled me with an existential dread as an advertising guy. I see a leak in the advertising industry’s ship. But instead of fixing it, the two indicators are telling me that advertising industry is busy being in denial – telling its employees, its clients that everything is fine, all we need is ‘purpose’, ‘creativity’…(and other buzz words). Semantics and bullshit have never rescued a sinking ship. The ship is totally rescue-able – it can even get better. But for that the emperors must acknowledge their true sartorial status.

The first indicator – Denial

So I got my grubby hands on a leaked document from one of the biggest agencies, charting out their plan to succeed in the new year. They identified just the right problems plaguing the industry. I was quite surprised to see the clarity in problem statement. Wow, hope!
And then the embarrassingly small minded solution to the big problem – a new fucking planning tool. Don’t get me wrong, i understand the power of a new perspective and this tool was a new interesting perspective of looking at modern business problems.  It quite adequately and elegantly captures the new realities of digital behaviours and mass media’s sharper relevance. BUT, it did not solve for the problem that was stated. If the brands are dead, how would a new perspective resuscitate them? If agency’s role in brand building is getting marginalised, how will a new planning tool help it in becoming more relevant? It is part of the solution, not the solution itself. Perhaps I misunderstood the scope of thinking – so I engaged a few people in conversation – perhaps there is a technological component to the tool that will help scale the operating procedures. After all, what good is a perspective if it remains a sales tool rather than a systematic way of thinking for the whole enterprise. That can happen by designing intelligent workflows, reimagining the roles and expectations. So I asked about these opportunities, but in return I received puzzling silence. Maybe they don’t get it? maybe I am not getting it? Either ways, glug glug glug.

The second indicator: Talent paucity and nothing constructive done about it

Successful Digital startups ‘pivot’ fast enough to stay relevant and thrive. Agencies very obviously can’t. They are good at applying cosmetic changes to their ‘purposes’ and ‘philosophies’ even as nothing operationally changes.

Successful companies are good at institutionalizing the feedback loop – the giving, taking and leveraging of constructive feedback. Company improves if employees improve. But agencies seldom have that culture – the evaluation ritual is perfunctory most of the times. All agencies depend on talent, though only a few invest in talent with time and thoughtful dialogue to help improve. Most agencies simply throw money to hire someone with new awards. They would much rather spend money than time and efforts. Effectively that has created a loop of talent turnover instead of learning and improvement.

Why 2018?

Because of the momentum – The media inventory being questioned, tracking  and target positioning ad ex as bad guys, stocks falling for holding companies and there being obvious ways in which an eagle eyed activist investor can take charge and improve long term growth prospects… Besides the vulture funds have too much cash and not enough places to put their monies in. Hedge funds, hedge this.

 

by Ajinkya Pawar

The precariat agencies

I am interested in the changing dynamics of agency business. So I tend to read whatever I can about new efforts being made to reinvent businesses. Some of the efforts are truly astounding – the AI agency Born, for example – sounds very interesting. Then there is Maana, a big data company that helps make sense of internal data.  I don’t completely understand them yet, but I know what need they are fulfilling and how they are relevant. They are trying fairly interesting new things.

And then I come across news from advertising agencies – and it feels as if all that ad agencies do is bullshit, not actually innovate. Just came across an article on adage that I had to read twice to make sense of. Here it is. So the article packages the desperate efforts of some small agencies to stay relevant as ‘new business models’. Sure, what they are doing is indeed a new ‘business model’ – like depending on freelancers instead of investing in teams and infrastructure or to charge only by hours instead of guaranteed scope under contract. But is any of it in their own long term interest? If you are not engaging in contractual  partnerships, you are simply creating a cheaper alternative to traditional agencies while absorbing the uncertainty for yourself.

A ‘business model’ that essentially creates ‘less value’ is similar to a ‘business model’ of outsourcing manufacturing jobs to ever poorer countries. The client gets a cheap deal and the labour at home suffers. That is not innovation. It is desperation.

precariat2

In the article, BETC LA, (a dance company? an agency?) boasts about spending ‘only’ a quarter of a million dollars on a launch campaign. I tried to dig a bit deeper trying to understand why would an agency need to spend that kind of colossal sum on a ‘launch’? The agency website still say that it ‘will’ launch in oct 2017. Doesn’t compute.

It feels like somebody had to do wild mental gymnastics to portray these various precarious agencies as pursuing bold new ‘business models’. If you get into cost wars, the cheapness spiral will only drive down the industry.

In a way it is poetic justice. The industry that played a role (even if indirect) in destroying unions and collectivist utopia of 20th century finds itself on the other side of the table – capitalism draining it out and rendering it into a commodity.

There is time still to do the right thing, to grow by increasing the ‘value‘ of what we do, by being more conscientious of what we do. Here’s a few ideas for ad men/ women to grow in the future –

1. Recognise your  precariousness and Unionise to gain strength.

2. Recognise your human potential and look for opportunities ‘beyond ads’

3. Learn from beyond the narrow world of advertising and create new value, don’t sell old wine in new cheaper bottle.

May you find your way out of precariousness.

 

by Ajinkya Pawar

Advertising industry’s new ‘Pivot’

No planet for old businesses

Exhibit 1:

On 16 June 2017, Amazon.com Inc. announced that it is acquiring Whole Foods Market Inc., for $13.7 billion in an all-cash transaction.
By the end of that day, Walmart, Kroger, Target & Costco had lost their market caps by 5.8%, 7.1%, 9.1% and 15.7% respectively.
On the eighth day of the announcement, Amazon’s market cap had increased by $18.9 billion.

In a sense, not only did investors reward Amazon by funding the acquisition, they also punished the competitors of Whole Foods for not being acquired by Amazon.
The situation is such that as soon as Amazon enters any category, leaders in that category lose market valuations almost instantaneously. That is the promise/ threat of platforms like Amazon.

Exhibit 2:

“In 2017, almost 80% of every incremental ad dollar spent globally will accrue to digital. In their domestic market of the US, Google and Facebook are capturing more than 100% of this growth, up from 85% in 2015.” So read the 2017 Redburn Report titled, ‘Ad Agencies Marginalised.’
“More than 100%…”

If someone captures a share of more than a 100%, it means that that share came at someone else’s expense. Certainly, many digital advertising companies and ad exchanges saw decline in share of digital ad spends. Advertising agency holding companies too bore the brunt of Google and Facebook’s growth. 2017 perhaps has been the worst performing year for WPP since the recession of 2008-09. For the latest quarter Q3, the firm reported a 2% drop in organic growth.

Essentially, growth is almost a zero sum game now in which platforms are winning. This is in stark contrast to the nature of growth in the last century, where globalization created avenues for many to grow: It was not a zero sum game then. The monopolistic ‘Platforms’ are stealing lunch of legacy businesses – ours too.

Platforms are winning in today’s zero-sum game of growth. The monopolistic Platforms are stealing our lunch.

What are platforms?

A platform is essentially an enabling infrastructure/ environment that,

  1. Gives freedom to connect with others
  2. Enables valuable exchanges which were not possible outside of the platform
  3. Enables external applications/services to be built on top of it, (APIs)

Platforms like Amazon, Facebook, Google and Uber are enjoying unprecedented growth and consequently unprecedented investor interest, because they allow that egalitarian access to valuable exchanges that were not possible otherwise. By their very nature, the exchanges become more useful, more valuable with expansion of user base. Amazon is able to fine-tune its suggestion because it has access to purchase history data of billions of its customers across the globe. People use Facebook because all their friends use Facebook. This phenomenon, of increase in usefulness and consequently the value of a service with increase in the number of users, is called ‘network effect’.

The sinister consequence of the network effect is the potential of monopolies. The logic of Platform growth inevitably leads to hollowing out of existing market structures. The logical conclusion of Platform economy is a world of monopolies rising upon the ashes of old businesses.

Shift in client priorities

From ad spends to spends for innovations in product, supply chain or marketing.

As if the threat/ opportunity of ‘Platforms’ was not enough, companies these days also have to wrap their heads around 3D printing, Blockchain technology, CRISPR/Cas9 and so on. These are amazing technologies promising revolutionary changes. These technologies present new opportunities that we never knew existed before.  However, many legacy businesses are ill equipped to respond to them.

Thankfully, a whole industry has sprung up to cater to these needs – needs of business transformation in the face of existential threats posed by new technologies. Traditional consultancies have adapted to offer new expertise to clients. Specialist big data analysis agencies are helping companies make sense of their consumers. There is even an AI (Artificial Intelligence) agency now, that helps create ‘intelligent agents’ for brands. Market is demanding newer mutations of agencies like these, mutations that help them navigate the brave new world of the new economy.

Market is demanding newer mutations of agencies; mutations that help them navigate the brave new world of the new economy.

The question that we must ask ourselves is – do advertising agencies matter as much in these testing times? On one hand, the budget allocated by clients for marketing is under pressure. On the other, technological investments, specialist hires and consultancies are claiming an increasing share of the budget. Will this twin phenomenon erode the value of our services? Will the share apportioned to advertising shrink further?

Advertising agencies, if they remain what they are, will secede their privileged partnership status to digital transformation agencies, to business consultants and to platforms like Google, Facebook and Amazon.

One obvious yet terribly difficult-to-pull-off implication of this is – to become an advertising platform. I have discussed this in detail earlier. The reality though is, not everyone can win in that race to become a platform. For the majority of marketing services agencies to survive and thrive, we need a ‘specialist’ strategy, not a generalist one. Here is why.

Age of specialists

Creative agencies are made up of a unique set of people: People who can think laterally, think big, think informally. Apart from a few top tech companies, not many companies have the asset of free thinkers who are not stifled by hierarchies and suppositions. As such, creative agencies are uniquely positioned to create new solutions for brand growth, beyond branding ideas.

For marketers trying to make sense of a fast changing world, agencies need to adapt to remain the priority partners they turn to for help. Can the planner’s customer centricity help companies improve their business plans? Can the creative talent’s mastery over conceptualization propel a client brand’s product and service design?

Why not to be a generalist?

Advertising agencies help clients ‘position’ their products as distinctly relevant. But we forget to apply those lessons to ourselves.

Google and Amazon is fundamentally rewiring our brains – even our clients. The ‘search’ and ‘suggested’ result mentality means that for every emerging need, the client searches for services he/she needs with sharper definition. She is more likely to send out a specific query out in the world – either digitally or among peers – ‘Who is the best at product design in our category?’, ‘Who can help me assess Blockchain’s potential to disrupt our category?’

What results she might get? Would people respond with a generalist agency’s name even if they have the capabilities? Will a generalist be on ‘Top-Of-Mind’ for such queries?

Well, many private agencies can choose to continue doing what they do, with likeminded clients catering to traditional consumer segments. But that set of marketers is shrinking, the addressable opportunity is getting smaller. That means making peace with low growth.

However, for publicly traded advertising holding companies, coming years could be the years of transformation – either willingly or engineered by activist investors who demand growth.

Hence, it is increasingly likely for large advertising players to ‘Pivot’ to go for the biggest emerging opportunities.

What is ‘Pivot’?

The purpose of a pivot is typically to go after a bigger & sustainable growth opportunity in the market that can ensure companies’ prospects for near future. You do so by changing the direction of your enterprise if the need be, while staying grounded in your core competency.
Firstly, it requires reassessment of your old business in the context of emerging opportunities/ threats. The reassessment should ideally throw up useful insights about your clients, your product/ service relevance or the way you work. Consequently, you quickly test possible improvements to your service. When you hit on something that works, you scale it up and go to town with it.
You might end up changing something about the way you do your business, while keeping some aspect of the business constant. For example, it might entail shifting to new markets/ consumer segments/ new clients. It might entail prioritizing a different sales channel or to gain new capabilities. It might even mean reinterpreting a consumer need and creating a completely new offering.

At its core, it is about changing with an ear to ground. An ear to the ground tells us of seismic shifts in advertising industry with issues of trust (Pritchard, 2017), profitability, and marginalization (Bianca Dallal, 2017) posing threat to advertising industry’s prospects. Common sense tells us that something needs to give – something must change.

It is about time advertising agency business models change for the better.

The pivots of advertising agencies

At its most fundamental level, advertising agencies exist to help marketers grow (Purpose). They do so NOT by helping make the product/ service better, nor by helping reach more consumers. They do so by helping create consumer demand with distinctly persuasive communications. (Competency) The perspective to understand here is that of two variables: Core competency and Purpose of existence. Hence, to evolve, agencies can either look at radically reassessing their competencies or their purpose.

To evolve, agencies can either look at radically reassessing their competencies or their purpose.

Pivot 1. Core competency:

a.      Marketing services agencies:

Typically, creative agencies’ core competency is in their access to creative & strategy talent. W+K, Droga5 or Ogilvy are well known for their creative rock stars. Yet another agency might be built on the strength of decades old client-agency relationships. A media agency might boast about the scale of media spends that it controls and can influence. A research agency might have proprietary methods of inquiry or access to qualitative data.

The logic of pivot tells us that – for advertising agencies, there is an opportunity to pivot with their creative talent. What is the biggest business growth opportunity for the kind of talent they have? Beyond ‘advertising’ what high-value products/ services can this talent create?
Similarly, a research agency might look at its proprietary tool and reevaluate its potential. How can they augment the value of their intelligence the most? Would tabulation of existing qualitative studies help build an intelligent map of consumer behaviors? Who might be interested in such products? If ‘Big Data’ is the new oil, why are research agencies not making their big data usable at scale?

Here is an example of Pivot thinking applied to creative agency business.

The “If You Build it, They Will Come” agency:

This pivot is about keeping company’s people and their abilities at its heart and purpose. It seeks not to build radically new capabilities or hire radically disruptive talent. Instead, it seeks to find the biggest opportunities that the existing teams can deliver on, with greatest amount of satisfaction for the team.
For a creative agency, that means identifying the distinct talents of its teams and then finding the biggest possible commercial opportunities for them, may it be in advertising or beyond.
Creative talent remains the biggest asset of any creative agency. Yet, there is a growing sense of being overworked and underappreciated among the creative teams. There is a sense of ‘missed opportunity’ among people who see others creative people garnering fame and fortune with digital content. YouTube stars, Vice, Refinery29 and so on, have shown that there are bigger avenues for creative expression that could be financially rewarding too. There is a market for every conceivable creative style, expression, idea, app, activity or content. The creative team’s dilemma is – whether they will be better off with a career in advertising or in new age digital companies or by going solo with content creation, curation or aggregation?
Each creative person grapples with these choices. It would be in the agency’s interest to see the potential of its people before the people themselves do. If their team is passionate about a certain kind of creativity, find the biggest market for that creativity. This logic perhaps would not have been very sound 20 years ago. The surest way to make money with creative expressions and ideas was with advertising alone. However, today, a creative person can do much more with his/ her ideas.

If one looks at an idea objectively beyond the context of its birth, it looks much grander. Here is a thought experiment to prove my point.
Think of the last idea you had for a client’s campaign (or if you do not work in advertising, consider ‘what were they thinking?’ for any of your favorite commercial). Now think a logical conclusion to that idea divorced from the brand. Put that idea onto another stage/ context/ medium – see how it expands. If it is a good idea, it will always fill up the volume of your imagination – more than any brand can do justice to the idea.
For example, divorced from Dove, imagine the biggest expressions for the idea of ‘real beauty’. Can it be a movement? Who would like to contribute to it? Which brands would like to associate with it? Would the idea find place in the women’s marches? Would it lobby against skin whitening creams among policy makers? Would it run community centers? What would be the business plan, revenue model for the fullest expression of this idea?

If it is a good idea, it will always fill up the volume of your imagination – more than any brand can do justice to the idea.

Imagine an agency that has a set of issues/ themes/ ideas that it works on instead of set of clients. Will it be more interesting for the creative talent? Could it be more profitable? I believe it can be.

Ideas can translate to bigger things if you let them run free. The digital world has brought down the cost of realizing ideas drastically. It has given us the tools to translate and mutate ideas in infinite ways. Creative shops must make it part of their credo, to not let any good idea go to waste and to bring to life only the biggest expression of it.

The tragedy for many creative people is to see their magnificent ideas not reaching their full potential, being rendered impotent for a smaller cause, smaller venue. Instead, this new agency would recognize the bigness of ideas and put their efforts and capital in realizing those big ideas. The belief being – If You Build it, They Will Come.

b. Holding companies:

Unlike consultancies whose competency is in housing domain experts, holding companies do not have palpably distinct competency any more. A holding company is as good as the companies it has in its portfolio. The value of a holding company used to be in its ability to help portfolio companies to scale. However, it seems to have exhausted its scaling potential, evidenced by lack of organic growth.
Holding companies are trying a few things to improve their value. WPP is hedging its bets on ‘Horizontality’; Publicis is attempting to create an AI enabled personal assistant for its employees called ‘Marcel’. However, unfortunately, both attempts lack vision and conviction.
In an interview for ‘Strategy + Business’ in 2016, PwC Principal Deborah Bothun asks Sir Martin Sorrell, “How far can you take that?”, referring to Horizontality – the effort to get people from different WPP companies to work together for certain clients. Sir Marin Sorrell responds, “Not far enough.”
If the idea cannot be scaled across the company, is it even strategically relevant? At best, it seems to be a tactic to keep key clients happy.
Marcel too seems to be born of a narrow vision; it simply is an internal talent-sourcing tool. Wit AI, and the data that Publicis already has, it can be much more – but there simply is no evident will to create something groundbreaking.
Currently, the business incentives for a holding company are structured in such a way that they cannot radically change their course. However, many of their operating companies can.

Pivot 2. The purpose

In this pivot, we remain true to our purpose of helping client businesses grow. What changes is the ways in which we help them grow. The competencies become variable here. This means for this pivot to work, we must be radically adept at bringing in expertise for most growth needs of the client. If the client requires blockchain expertise, the agency must be capable and willing to provide that expertise. The key focus here is to become the de-facto growth partner of your client.

The “specialized business growth drivers” agency:

This pivot keeps the client base, the market, as constant and re-evaluates its options to seize the biggest opportunities in that market. Therefore, if your client base still feels that their biggest priorities are advertising/ branding to fuel their growth, continue doing the same. However, if your client base feels that their biggest priorities for growth are about leveraging emerging digital platforms or managing reputation in the age of instant outrage, adapt and train your teams to fulfil these needs well. The days for generalist agencies that could do everything for a client moderately well are numbered. Today, marketers need sharper, targeted expertise, which they can get most efficiently by looking at smaller, more specialized ‘vendors’. There is good money to be made servicing these myriad business growth needs. Specialize in driving growth for a certain kind of clientele with a set of competency they prioritize.

New age, new agencies

It is about time that agencies wake up to the reality of working in the digital world. It is not the time to be afraid and to be defensive. It is time to make bold new steps, to ‘fail fast’ and to ‘pivot’. It is time to start new adventures. The technological and societal revolutions are not threats, but opportunities for growth. It is time to grow magnificently with these new opportunities. Grow by either sharply adapting to emerging client needs or by investing in ideas you believe in. It is a brave new world, ready for the best of our ideas.

by Ajinkya Pawar

Targeting: the holy grail of 201x’s ad-tech creeps

Traditional advertising was famously opaque. As the old adage went – “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” So when digital advertising came about, the initial siren songs were about the promise of precise targeting and reducing the ‘wastage’. That siren song has not lost its appeal. More and more ad-tech firms pile on with newer and newer ways to target/ retarget by usurping personal data of unsuspecting consumers in morally repugnant ways, even if legal.
IoT, mobile phones, smart TVs, alexa…. the spying glass now comes in various shapes and sizes. And there are thousands of companies trying to incrementally increase the creep efficiency with each of these surveillance windows.

But to what effect?

  1. A vast majority of ad-tech firms are not making much money. A ridiculously large share of the profit pie goes to only two players – Google and Facebook. So the prospects for ad-tech guys don’t look all that well. Their hope is for the laggard holding companies to buy them off.
  2. Brands -Brands are waking up to the reality of indirectly funding fake news, hate mongers, trolls, sexual predators and so on with their programmatic buys. Even as the ‘inventory’ gets cleaned, they are getting a terrible deal on the rupee spent – for every rupee spent, merely 3 paise actually amounts to something useful. The rest goes to middlemen. So much for efficiency.
  3. Trust – and most insidiously, more and more people are looking at media, at devices, at brands with suspicion. All the tracking, hacking, retargeting efforts have left people uncertain about the faustian bargain. the deal perhaps was not all that good. free apps, it turns out, are fairly costly. The utopia of ‘Choices of brands’ is turning into dystopia of incessant, insidious and inescapable commercial propaganda.
    How insidious you ask? Here’s an interesting article telling you exactly how insidious – apps, ad exchanges pervasively track  (beyond your permission, your imagination or your awareness of it) your behavior in hope of ‘monetizing’ your behavioral data.
    The creeps go so far as to use sonar or wifi to monitor your every move in a store to figure out your preferences. Without your knowing ad tech guys are monitoring where you are, what you do and much much more. The ‘big data’ then gets traded around to ‘third parties’, mixed with and analysed so as to know you better than you ever can know yourself. Right now, no can say for sure who in the world has what information about you and how could it potentially be used two years from now.
    Things you wouldn’t care for ten years ago like your routine, your choice of retail shops, your click streams, your idle time on phone etc, are now data points that can be weaponised to influence you. We are being forced to care for our inane details.
    A lot of ad-tech is built by people who either can’t fathom the societal context of what they are doing or don’t care. They are at best naive, at worst slimy scumbags who profiteer at the expense of ruining the internet for everyone.

Most likely, like EU, many other countries will tighten consumer laws (or worse! Use these surveillance system for government’s use like in China) and put an end to overt targeting.
This can’t end well for ad-tech guys for sure.

Essentially we must realise that targeting is a false goal. 1:1 connection might be desirable, but is sustainably possible only in certain ecosystems – physical, amazon prime perhaps to an extent and such. That means  monopolistic powers might gain further, but not without them too getting under the scanner.

Stop obsessing over Targeting.
Make advertising great again. 😛