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.

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Must you merge?

WPP’s game plan is pretty clear – simplifying the holding company’s ‘holdings’, integrating agencies and driving for greater efficiencies.
In the last few months, it has folded Possible into Wunderman (digital), merged Maxus and MEC into Wavemaker (Media), merged five design agencies into one Superunion (Design), amalgamated Burson Cohn & Wolfe (PR) and two attempts at mixing digital and creative with VMLY&R and Wunderman Thompson.

I hope this strategy works out. And I believe there will be a phase 2 to this consolidation with a layer of AI backed efficiency improvements in the future. But if that was the case, why would WPP have given away some of its stake in Kantar? From an AI strategy point of view, the research agency’s knowledge could be made useful in a specific way.
The sale tells me that they have either,
found no usable database or
have found no way to turn its existing knowledge into usable database or,
have a different AI strategy in place that doesn’t need research data. (which i find implausible, but hey, what do I know? I am a thousand miles from decisions and people who matter.)

Merging People

Coming back to the present, I really hope the objectives of mergers are achieved. The merger is supposed to bring together “award-winning creativity alongside deep expertise in technology, data and commerce.” My first concern is, does it really happen like that? Can creative companies successfully  merge their people, their capabilities? Is the sum greater than its parts? I tried to find answers to these questions in research papers, but couldn’t find any.
Anecdotally, I have witnessed (and know of) more merger failures than merger successes. I guess, data companies (epsilon) and consultancies (Accenture, etc) have been fairly successful in bringing in new capabilities. But agencies aren’t as well positioned to integrate other capabilities as easily.
Let alone integrating capabilities, integrating people with similar capabilities hasn’t always been easy. Look at any of the mergers in Indian advertising industry for instance. More often than not, legacy clients leave the merged agency as soon as founder’s grip on the agency weakens. A merged agency is fundamentally a leaky enterprise – the brand gets absorbed, people leave and so do the clients. There is no intrinsic value enhancement with mergers (apart from providing scale. This proposition was deal maker in the last century. It is hygiene now though.) I don’t want to take agency names here; a cursory look at the history of most of the merged agencies in India will testify.

So if merging is so difficult to pull off for a 100-200 people enterprise, wouldn’t it be exponentially difficult for companies with 10,000 people in employ each?

Scalability

There are specific processes through which say a Oil refinery’s capacity, Google’s computing power or amazon’s warehousing can scale. Before they scale, they would have a roadmap to implement.

I hope WPP has thought about the processes needed to scale successfully. There is much to unpack here.

What would a successful scaling look like for an agency? For physical infrastructure scaling, installation and servicing are easy to monitor and measure. A failure would be apparent soon enough – an oil spill, a data security vulnerability, service outage, etc. However, the results of a failure for creative industry would not be immediate.

What failures do we need to look for?
Our success is measured in Marketing effectiveness, Creative excellence. To make this  a reality, we need capable people working together. So we have four variables to track our success/ failure.

Marketing effectiveness,
Creative excellence,
Talent’s capability &
Ability to work together.

Effectiveness & creativity – essentially a track record. You can put a dashboard ideally. (screw awards. waste of time.) But you will have to wait a year or two to see if this works. 

The second two are interesting. They are about people. Companies merge, people don’t. So upon announcement people won’t acquire each other’s capabilities through osmosis. Nothing is going to change unless there is a systematic plan to help people improve their processes, learn new skills, move across departments fruitfully, and so on.

Publicis potentially can have that capability, if it improves its Marcel attempt.

I hope WPP has such plans afoot. There are two components to it – process improvements to make collaboration and learning easy & training programs. Again, if past is any evidence, I haven’t witnessed any meaningful program to improve my skills, help me collaborate or even to make me aware of new emerging tools. (Well, truthfully, there was one instance in my first year, where i lead efforts to build an in-house Knowledge portal. I wouldn’t say it was a grand success though. We learnt quite a bit with that project.) 

So I am skeptical of holding company’s ability to institutionalize capacity building. Agencies prefer throwing money at recruiting new talent, instead of systematically investing in imparting skills.

I hope WPP institutionalises efforts to plan for and measure improvements in capabilities and co-operation.

The sum total

Successful mergers create value that would have been impossible for the merging companies by themselves. For a commodities & service companies, that value might arise from process & cost efficiencies or competitive ‘moats’. Marketing services/ advertising industry is different though. For Wunderman Thompson to be successful, it needs to change its processes so that its data, strategy, creative people work together meaningfully, resulting in a new experience for clients – where the client shares a marketing problem and agency provides a plug & play solution utilizing mediums and people effectively and efficiently. This will require creation of bespoke tools for collaborative work. But knowing agencies I feel the management will go for off the shelf solutions, creating newer silos. I am hopeful though – after all I certainly don’t know as much as the industry stalwarts do. They perhaps know of a better way to integrate than the ones I am suggesting.

Here’s hoping for the best.

An alternative – decentralize

I believe, there’s a better alternative to this merging mania – improve processes & help distinct companies with distinct core competencies collaborate better in a plug and play manner. I have written about the thinking behind this approach – here and here. I will write a followup about exactly what this translates to in the near future.

Cheers.


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.

The Mad World of Monopolies Over Brains

Microsoft bought semantic machines.

Google, FB etc keep buying smart companies all the time.

A handful of global companies keep buying smart companies before they can get a product out to the market.They are essentially creating monopolistic moats over not just cutting edge intellectual property, but also the intellectuals – the men and women capable of creating/ leveraging new technologies.

So many startups now start with the end in mind, the vaulted ‘exit’. What happens when all the technological advancements get concentrated in fewer and fewer hands? The only anti-dote to Marx’s dystopia of ever accumulating capital was the intellectual capital that allowed anyone to give it a go with limited risk and succeed. Is that anti-dote of intellectual capabilities relevant any more?

Any body can learn to code, etc. But can everyone access the infrastructure and the necessary accelerating feedback loops to improve as fast as these few companies can? That pace of accelerating innovations is the new Capital for 21st century.

If we don’t want an increasingly unequal world, we will need to view this capacity to rapidly innovate as a capital that needs to be seen similarly to other capital assets – land, machinery, channels of access to consumers.

Which means, it is time for regulations. We can’t let ever fewer investors and companies to corner the ability to rapidly innovate.

This is essential. Unlike 15 years ago, when a zukerberg could code out of his dorm and build an empire. Now another zukerberg could code just as well, but if his idea & code is any good, it will either get copied by these juggernauts or get bought early on. Look at how FB is copying snapchat to its death. It is not a level playing field anymore. A successful digital company now will require a war chest of billions. There are investors ready to fund these war chests. But the problem is, that these investors are same few folks from California (and one notable Japanese guy).

There is no Nigerian, no Indian, no Brazilian, no Greek, no Swedish….(and a 190 countries later) person among those few people who control the new engine of human innovations.

A side effect of this narrow competition is the poverty of ideas that the best minds are working on – google glasses, automated vehicles, AI assistants … are these the biggest challenges for the humanity? As Climate change, growing inequality and rising xenophobia tear the world apart, should the people who can create the infrastructure of the new world be spending their times on elitist pursuits?

It is not difficult to copy them and become the new age capitalist. However they have created a high-entry barrier by turning it into a mad game of bluff. Their tactic is to value companies at ridiculous valuations. The valuation is divorced from reality and based solely on the potential of possible monopolistic leverage. Naturally, most sensible people, stay away from this capricious game.

These people are feverishly gambling with the intellectual capacity of humanity. It is a mad mad world. They need to be stopped if we want a better world.

Advertising bros have a big problem: low self-respect

Yes. Self -respect, not self-esteem. They hold themselves in high enough esteem. Many of them could be rightly called out for their arrogance or over-confidence. It is not an issue of self-image as much as it is about an internal moral framework.

I am specifically talking about the way the client-agency relationship is deteriorating and how the advertising bros are reacting to it. What happens when we lose business now? What happens when we keep getting invited to pitches that do not end with change of AORs? What happens when a not-so-smart client gives you useless feedback or worse, hopes you to decode his/her grunts, nods and irrelevant comments? What happens when clients don’t give you enough time or money for the stars and worlds it wants to create for its brand? What happens when they squeeze you for margins, favors and extra un-billed work? What is happening with talent? Are they getting proper feedback, proper support to do their work?

I see the management, across most agencies & globally, conceding ground at each of these moments. The dialectic is totally absent. Apart from a few vanity browny points, we hardly see agency management taking stand when it really matters. I am not talking about pride. I don’t see pride as a virtue. We don’t need to be proud of our work. Pride is a negative emotion. What we need is a sense of self-respect independent of our work, independent of our financial leverage, independent of our contractual obligations and rights. Self-respect that is grounded in our humanity, in our ‘agency’ as human beings. That I feel is absent.

That self-respect powers you to ask the right questions, to stand for your right to your time, your money. That self-respect helps you see things clearly. Without that self-respect, convenience blinds you from reality. Without that self-respect, we accept client’s gibberish or half-baked thoughts as concrete orders. Self-respect gives you the power to very humbly ask the questions that must be answered. Without self-respect, the management ends up piling on more work than the team can handle and with far too many reworks and rounds of reviews. Even if they feel sorry for it, what good is that remorse? What force is marrying them to this situation? It is a simple issue of proper feedback and setting the right expectations. Self-respect propels you towards clarity, towards equal terms of engagement, towards a work-ethic that leads to joyful work not dreadful work.

i hope for agency leaders to grow respect for themselves in their own eyes.

Sell the damn soap. Don’t ’empower’ anyone.

So the research suggested the consumer as a patriarchal housewife – a woman who listens to, and seeks her husband’s suggestion. A woman whose day revolves around catering to the needs of her children and the husband. Surprise surprise, patriarchy exists. But client won’t buy it as it is, won’t really engage with the reality, probe the ‘why’. Patriarchy doesn’t exist in the world of client’s brand guidelines. Now only if by closing one’s eyes to reality, one could change the reality.

The client leader probes the poor researcher, ‘Did she ask for ‘opinion’ or ‘suggestion’? I think the modern woman is a ‘progressive’ equal partner’. “Isn’t she happy to help her family members succeed in their lives?‘ That was expected: the generous reinterpretation of truth to fit their narrow worldview. The VP says so, because the global brand guidelines tell her so. The brand’s consumer is the mythical progressive smart housewife who is modern and yet not outraged by patriarchy. The thing with personas molded by corporates is – it is an exercise where wishes and projections of multiple ivory tower dwellers, coalesce. They fling their narrow world-views and politics at each other, reality be damned. What matters is to sidestep contentious issues  and go for the middle path to profit.

Ok fine. so profit motive is critical. Then why do the whole ‘persona’ bit – why go after ‘life insight’ and ‘cultural insight’? Why not simply stick to the need your product is actually solving. Sell the goddamn soap for what it does. Find insight about the product relevance. It does not need to ’empower’ to sell more. But no. “We are a progressive company”. yeah right.

Solving a problem, needs recognition of the problem, recognition of agency of others. With corporate mandated blinkers, all one can do is provide lip-service to ideals and do nothing that would really do anything ‘real’ about the issue.

I wish for brands and agencies to leave the ‘movements’, ‘revolutions’, ‘activism’ alone. Any of it done in ‘bad faith’ only harms the movement, not help it. The powerful usurp the social dialogue and the issue gets ‘managed’.

Sell your damn soap. Don’t bother with being ‘progressive’ or ‘activistic’.