The end of Monoculture and what that means for agencies

Flying over Kuala Lumpur, one can see huge expanse of palm trees, beautifully arranged in rows and columns. Fly over Thailand and you would see similar geometry playing out with rubber trees.
The human sense of geometry imposed on nature, seen from the human invented vantage of flight. It’s wondrous and beautiful and awe inspiring.

What you saw was monoculture in its full glory. Monoculture is beautiful for the bird’s eye, but it is destroying the biodiversity of this globe. We might wake up to a world tomorrow, skidding to a halt, when the rubber plants in Thailand are infected with deadly fungus. Say bye bye to tyres, grips, stethoscopes and condoms. It’s the end of the world as we know it.

Monocultures make us vulnerable.

A similar monoculture had been taking root in the 20th century. The memetic monoculture of TV and mass media.

We had shared cultural references – shaktimaan, ramayan, chandrakanta, hamara bajaj… it was easier for brands to be built with ‘campaigns’; one iconic campaign and you are sorted for the decade. agency leaders were celebrities and being in an agency felt great. After all, advertisers were the architects of the monoculture. One culture to rule them all, and advertisers were molding that ring. We wielded great power and we rue loosing hold of it.

21st century is different though. Internet is the fungus that has killed the monoculture of mass media. These days I am hooked to The Bugle podcast by Andy Zaltzman & Post Malone’s song, Sunflower. And no one knows of my addiction to these content pieces – not even my family! I am consuming that content mostly by myself. Unlike the 20st century where content was sparse and people welcomed content, we live in a world where we shield ourselves against the onslaught of it. I don’t want your forwards and in return i won’t send you links to podcasts and videos i like. 🙂

From mono culture to culture of one! The world has been turned upside down.

What does it mean for agencies? Isn’t it obvious? advertising was the powerful ring to rule them all. Now that ring is destroyed. You might create campaign that is creatively 100 times better than Fevicol’s legendary campaigns or Nike’s just do it campaign. But unless those efforts are now backed with content – retail – experience strategies, you are bound to sink.

The point is not that advertising is dead. But rather that it’s relevance is dwarfed now. It will always exist, but no longer in the spotlight, but it will grow in the shadows.

It will remain an important tool in attempting to create shared cultural references. But it’s ability to do so is being challenged with end of monoculture.

Strength in Diversity

Marketing gurus like Mark Ritson & Les Binet are ardent advocate of the notion that advertising, especially TV advertising, is crucial in creating that shared cultural reference, the brand. I don’t dispute their claim. But I wish they wouldn’t discount the opinions of people who feel that software will eat the world, beginning with advertising world.

Mark Ritson’s argument is simplistic – look at the number of people spending time on TV! Look at people talking about ads during superbowl! TOM Matters!

Yes it does. No one’s discounting it. Otherwise, we wouldn’t have seen growth in ad spends.

What is being questioned is the primacy of mass media and TV in particular. And that is an excellent question!

With proliferation of medias, strategies, approaches… the diversity is strengthening the capitalist culture. The new culture might require more brands, perhaps fewer platforms and a billion segments of consumers who consume things in millions of different ways.

That is an opportunity to advertising agencies, not a threat.

A brand now needs to do more – engage in culture more, meet more needs, be more proactive, delight more often…
Why fight and complain about it?

It’s great that the ‘big idea’ is dying and marketers have to do more, improve faster to retain customers. this is natural in the paradigm of growth through fast feedback.

By fighting it, all we are doing is showing our ignorance, our inability to adapt. we need to Pivot.

Here’s how – Pivot.

Advertisements

Our role in the fight against climate change.

Weren’t we supposed to be the good guys?

Advertising alleviated the pain of the Sisyphean tragedy of modern capitalism. Advertising taught the world how to want. Advertising gave the notion of free will and choices when it comes to consumption. It made the powerless feel powerful, that their choices, their consumption mattered. The consumptive soma that advertising created, filled the world with euphoria, making people forget about the differences that divided them, for a while. The promise of abundance, growth, prosperity united the world in a beautiful hope.

But in the process, it also helped wreck the planet, helped remorse-less industries harming people/ planet put up a human face, and generally aided the self-image and bad-diet crisis.

`And if that wasn’t enough, advertising world has to contend with its role in bringing humanity to the brink – there is growing consensus that unless we change our ways drastically in next 18 months, societies will collapse inevitable due to environmental catastrophe. And as of now, we are on the dark side. We are helping fuel the climate change denial by enabling smokescreens, we are encouraging consumptive behaviour, we are enabling companies ‘manage their image’ in bad faith and we are giving consumers the false hope of sustainable consumptive choices.

It’s time we reckon our role in climate change. Advertising industry has been instrumental in globalised capitalism. It was the soft power, that ensured that hard power was never needed to win new markets to grow like never before. But that project is over now. Same levels of growth for businesses will come at the expense of humanity’s probable extinction.

Capitalism is the creator and destroyer of worlds. And advertising is one of its most prized deputies. It is time for the deputy to check both sides of its master – unchecked creation IS destruction.
It’s time for its deputy to convince its capitalist masters that their survival is at stake, not just others’.

18 months.
We now have 18 months for the great capitalist machinery of this planet to self-reflect critically and change its ways. The way the world is going, it is likely that not much will change in the next two years, apart from the climate of course.

“it is time we consider the implications of it being too late to avert a global environmental catastrophe in the lifetimes of people alive today.”

Jem Bendell, Deep Adaptation

The de-stabilizing forces that we have unleashed on the planet are multiplying exponentially. The ensuing feedback loops of the chaotic system we call climate is going to leave most of humanity in tatters, soon enough.

We could plead ignorance in the last century. But what is the excuse now?

So here’s what we need to do.

Accept

1. Accept complicity in creating consumptive culture. Understand that it is not sustainable.

2. Accept that we have been opportunistic with interpretation of business goals – we help companies build opportunist narratives by leveraging humanist insights. we allow companies to remain inhumane by helping create humanist facade for them.

3. Accept that we have the opportunity to influence brand leaders and consumers in being more mindful and more active in our quest to increase probability of survival for most humans.

4. Accept that peddling tokenism, promoting purpose or social marketing – are counterproductive.

Check my denial

  1. Climate change is real. The change is not linear. As the situation worsens, it will worsen faster. And it is unpredictable.
    So STOP taking projects that contribute to climate change denial.
  2. We will be seeing its adverse impact within our lifetimes. Our life is being impacted by it even now. There is more than enough evidence for it. Search at reputed sources of scientific information for it.
  3. Avoid conservative/ right-wing media. They might say what you want to hear. But it doesn’t make it true. They are becoming wealthy at the expense of our ignorance and our lack of courage to entertain truth.
  4. There isn’t a category of products that is untouched by issue of climate change. Any thing that is consumed – product/ service will have a footprint in environment. It is time to be mindful of your role in propagating consumption in any of those categories.
    From clothes, soaps, liquor, social networks to hospitals and psychiatric clinics… growth in every category leads to consumption of resources which leads to environmental footprint – possibly detrimental.
  5. We advertising folks are masters of re-framing, reorienting the perspective for convenience. we can justify most decisions on moral grounds by bringing up other issues, by employing what-aboutery. Perhaps you can turn the question regarding consumption into an issue of free will – choice to consume freely, or into an issue of inequality – time for the underprivileged to consume now, or about gender issue – this face cream is about inner beauty… and so on. But know that these arguments are in ‘bad faith‘. (We really need to understand this concept.)
    Understand bad faith and try not to do anything in bad faith.
  6. We cry insignificance and point to the might daddy corporate which really runs the show. we say, if not me, someone else will… and that’s how the world ends.
    Clients are smart people. They aren’t always reasonable and they know the value in being so. After all, it is we who have cultivated the culture that entertains their unreasonable, no-questions asked poodling. They are used to people doing their bidding through the numerous agencies they hire. agency for manufacturing, for marketing, for R&D, for supply chain, for management…for everything. They are so far removed from the real world that they need research agencies to conduct researches to know their consumers. They are so far removed from the effect they cause in the lives of their consumer that they genuinely come from a place of ignorance. We agencies have a perspective though.
    We shouldn’t selectively project ignorance to protect our culpability.
    There’s no alternative to engaging with clients in ‘good faith’ about their impact on climate.
  7. Lastly, the world is never going to be the same again. The new world will not be about abundance and unlimited choices. Geo-engineering, genetic engineering, flying to another planet are not realistic choices. The new world needs a new perspective.

Resilience, Relinquishment & Restoration

I highly recommend reading this to start with – http://www.lifeworth.com/deepadaptation.pdf

...what we face is a complex predicament beyond our control. Rather, I hope the deep adaptation agenda of resilience, relinquishment and restoration can be a useful framework for community dialogue in the face of climate change.
Resilience asks us “how do we keep what we really want to keep?” Relinquishment asks us “what do we need to let go of in order to not make matters worse?”
Restoration asks us “what can we bring back to help us with the coming difficulties and tragedies?”

Deep Adaptation

To survive as species, we need this new mindful approach. Exponential growth is not sustainable. We had it good for a while. But now it time for change. So how can advertising agencies change?

These questions can guide us in our brand building, comms approach by keeping the context of broader society in our minds. We can’t afford to see our work in isolation from the rest of the world.

The question of resilience helps us reflect – Is this project really something that we want to see existing in 20 years?

The question of relinquishment helps us appreciate that in the coming decades many among us will have to give up something important – perhaps someone’s home, livelihood, way of being… Are our actions helping other people or are they aggravating their situation?

The question of restoration helps us look back and see for inspiration in our past. What and How can we help restore?

Appeal

What you read are my raw thoughts. I still need to read, learn and build on these ideas. I would appreciate any leads to help me do so.

I am looking for opportunities to partner with organisations in the space of raising climate change awareness. Again, would appreciate any leads.

Thanks.

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.