Crashing out of Goldilocks zone

I wrote this article for WARC’s ‘Future of Strategy report – 2020′.

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Survival is a delicate affair of balance and luck. Consider a monarch butterfly for instance. The place where they breed should have temperatures between 86°f to 95°f. Too high, eggs go dry. Too low, the monarch can’t fly. The climate change, loss of milkweed (their food & shelter), loss of overwintering habitat, are among other variables pushing the monarchs out of existence.

We might not be as beautiful and blameless as the monarchs. But we are just as much under threat. Digital disruptions, Covid-19, lack of organising culture among industry workers, lack of vision among leaders…we are crashing out of the goldilocks zone hard.

As advertising agencies refuse to evolve quickly enough, strategy departments (cost centre with an increasingly uncertain payoff) will be the among the first sacrificial lambs at the altar of P&L statements sinking towards red. Covid-19 is merely accelerating this trend.

Here’s my thesis on the industry’s growing fragility.

1. Advertising is no longer as important for brand growth as it was in 20th century.

In 20th century, a memorable jingle ‘scaled’ quickly in the collective consciousness translating to years of brand success. 
But in 21st century, commercials simply can’t make that kind of imprint on the collective consciousness.

What scales instead?
Supply chains with tech-based innovations;
Predicting consumers’ needs and desires with big data analytics;
Targeted nudges to consumer desire with cookies & notifications;
Product personalisation with material innovation, delivery experience or social engagement;

Memes that resonate with the zeitgeist…. The list is endless.

Digital technologies have given brand owners so many new tools to creatively find new ways to grow brands. Digital transformation is simply more deserving of the ‘growth’ budget. Consequently, advertising budgets are under pressure. Consequently, advertising agency business models are under pressure.

What can help?

As dimensions of brand growth grow, so must strategist’s capabilities even if agency’s offerings don’t. Strategist must develop appreciation of the broader context and not be focused merely on communications strategy. This can help build agency’s capability, but also strategist’s prospects beyond agency roles.

2. Agency leadership so far, have shown a deep incapability to respond to this shift.

  • The advertising industry’s choices to grow are clear –
    • Improve its capabilities in view of the changing world and offer new services or
    • Increase the premium of its offerings to earn more from the shrinking set of clients for whom advertising remains critical or
    • Leverage digital tech to scale – serve more brands with fewer people

Even after loud ‘Relaunchings’ and ‘transformations’, most agencies still are fundamentally unchanged.
The business model is still unchanged. (I don’t know of a single major agency that has substantially invested in either its capabilities, its delivery or its systems. Most changes are cosmetic.)
There are no path-breaking offerings/ new products being created by agencies. Mass media communications remains the major source of revenue for most agencies.

There is no serious attempt at improving capabilities of their people. (The deluge of webinars doesn’t count. What is needed is a culture of positive feedback and experimentation.)     

As agency margins come under pressure, agency leadership look to prune the costs rather than spending capital on building capabilities. This lack of vision is detrimental to strategy department’s relevance.


Ideally, strategists should play a major role in helping agencies navigate the transformation agenda.
This hasn’t happened so far to the best of my knowledge.People leading the transformation agendas in top agencies are usually business folks who are invested in the status-quo.

What can help?

Strategists should actively participate in the agenda of agency transformation. Strategists must appreciate reality of agency business and be capable of leading organisational improvements.

3. The role of communications in brand building is increasingly relevant in shorter time frame of here and now and not long-term brand legacies.  

Many brands these days don’t find the need for long term campaigns or big TVCs, altogether. Since their product/ service is evolving daily, they are more aligned to keep their communications just as alive with daily/ weekly refreshes. They are often more attuned to the changing market dynamics and want to respond at the speed of thought.

The new client expectation is for agency leadership and strategy team to be just as immersed in the brand world as they are. They want agencies to proactively respond to emerging trends, events, sentiment etc.

But often agencies expect the linear flow of directive – client brief -> creative brief -> idea. Repeat.

Agency leadership needs to step in here to set right expectations and enable a working environment where client-talent collaboration is fruitful and not marred by mismatched expectations. It’s not a difficult problem to solve. We just need a will to adapt and partner in new ways, work in new ways.

What can help?

Strategists need to be more vocal in re-engineering the work-flows and creative processes. Strategists need to lead the effort in guiding clients and agency leadership in collaborating more fruitfully in the new fluid brand world.

4.  Covid’s impact

Covid has accelerated the shift of advertising dollars towards digital media. This has meant agencies have lost majority of revenues very suddenly. Agencies that had not worked on their transformation so far, are bleeding now. It’s time for tough choices in such agencies. 

What can help?

Covid has precipitated economic hardships. Many of us will lose our jobs in this crisis. The industry bodies must take steps in safeguarding livelihoods, augmenting capabilities and creating opportunities to collaborate.

WFH

WFH hasn’t affected the effectiveness or efficiency of work. However, WFH has radically alienated people from each other’s journeys. Some teams are exploiting the full potential of productivity tools while some aren’t. Webinars have helped some gain perspective while many have gotten tired with their frequency. Some of us will accelerate in their skill improvement while some will languish. The lack of visibility over each other’s work/ conversations will only increase the disparity.

What can help?

Leadership needs to be more active in communicating with its team members during this time of crisis-lived-from-home. Efficiency and effectiveness are not everything. Community is being ruptured and we are not doing enough to heal it.

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 as parasitic meme

I. Agent to parasites

Orchids fool bees into carrying their pollen by making the bee think that it is getting laid.
Advertising works in a somewhat similar fashion.
The difference is; instead of genes, it is in the business of propagating memes*.

Advertisers needs agencies because, intrinsically, most commercial memes are not interesting enough. Deep down in our hearts and colons, we don’t care about soaps and cars. we care about love and health and sex and our sense of self and so on. (just read Vonnegut’s Breakfast of Champions. hence the hangover of ‘and so on’.)
So the parasitic commercial memes piggy back on emotional/ funny memes we really care about. Agencies in that sense are the piggie-safari-wallahs. Agencies help the fat advertiser climb onto the pig of ideas. (pig of ideas.. that doesn’t make any sense. anyways.)

II. Advertising business is simply not as rewarding as it was before.

If you look at an idea objectively beyond the context of its birth, it looks much grander.
Think of the last idea you had for a client’s campaign. and 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.
bee_orchid
Before internet, people only had advertising as profession where ideas could find a definite shape and reach millions. Your idea piggy backed on client’s money. and client’s commercial meme piggy backed on your emotional/ funny/ useful idea. ‘Symbiotic’.

But now we have the internet and much more.  Ideas can translate to bigger things if you let them run free. the digital world has brought down the cost of realising ideas drastically. It has given us the tools to translate and mutate ideas in infinite ways.
Then why straitjacket your ideas for the sake of commercial messages?
Advertising serves only as a business solution.

Advertising shouldn’t be romanticised any more as business of ideas. It is, what it essentially always was, a business of persuasion. You might tell a ‘story’ to persuade or go ‘native’ or ‘mine insights’. all advertising is doing is to adapt to the new reality to propagate commercial memes.

So unless you profit from it handsomely, why waste your good ideas on it? 
Earlier, brands would pay shitloads for an idea. a clean 15%. Now they have turned an idea into commodity – stripped to hours, execution costs, bargains. Artists (or closet artists) can do better. There are enough businessmen who can run this show. Leave it to them.

Any good idea that a planner/ creative can think of for a brand can always find a bigger expression in the digital playground now.

A creative/ planner (a closet creative person) can now put his ideas into movies, songs, comics, business, apps, installations and so on. He can do all that by himself. for himself. and yet make money out of it.

Be honest. you didn’t come into advertising because you loved brands. you came because you thought you are an artist. But you are scared to actually be one. Look around you. The only ones who are left are the ones who are too old or too young or the ones who are too afraid. everyone else has taken their flight to the land of trying.

What’s an advertising guy without his/her side project? //nudge//nudge//

III. Nostalgia
The orchid’s partner bee went extinct. and yet the orchid carries on the pretence as if with a nostalgic tumour.

Advertising industry, as it stands today, seems to be in a similar situation. You, under-paid friend of mine, do not need nostalgia of others.

*meme – info copied from person to person