Is there mayhem on Madison Ave?

“I told you I was sick” – Epitaph on tombstone

Like any industry involved in communication, technology is a disruptive force that has the potential of bringing down the largest institutions. Predictions on the disruption of the large advertising holding companies goes back to Bob Garfield’s book, The Chaos Scenarioreleased in 2005. Mr. Garfield spent 25 years as the advertising critic for Advertising Age and knew the legacy of the Mad Men era well.
At the time of Mr. Garfield’s writing, Google was only 7 years old. In 2006, Facebook and Twitter came to market. In 2010, Pinterest and Instagram join the fold. And that was just the beginning.

Through the Berlin School of Creative Leadership, I’ve gained a global perspective on the age of new media and have listened to the concerns facing industry leaders from around the world. Here are some of the pressure points I’ve seen:

1. More, more, more – the rise of content marketing

One of the largest growth areas for marketing is the creation of a vast amount of content to be distributed across wide range of media. Dave Lubars, Chief Creative Officer of BBDO refers to it as GOOD, FAST, CHEAP (and yes, you need to deliver on all three). This has led to:

Off-the-shelf solutions. These include predesigned templates as found in Envato, Creatve Market, Canva, and ShortStack. There is also a rise in “do-it-yourself” web design platforms that are challenging agencies who were pioneers in this field. Many of these template designs come from artists in developing worlds who can underbid almost anyone in the U.S.

The rise of in-house marketing departments. The motivation for bringing services in-house is not cost, as much as it is speed and expertise. This has been well documented by the In-house Creative Services Industry Report released over the last several years.

2. Competition outside of the competition

Like many industries disrupted by technology, marketing agencies are facing competition coming from outside their category. Nokia and Blackberry were pretty much destroyed when a computer company, Apple, decided to enter the phone business. In marketing and advertising, competition is coming from:

Media companies. N.Y. Times has made a major commitment to working directly with clients to deliver “native advertising” within it’s news ecosystem. Their T Brand Studio has been so successful, it has been expanded to London. Google has created Google Zoo, their own agency to connect with clients. Who would know how to integrate advertising better than the media company?

Startups and Contractors. A recent study sponsored by the Association of National Advertisers reports the increased use of marketing startups, which further challenges the Agency Of Record model structure so many agencies depend on. In addition, there is a rise in the use of “virtual agencies” that are assembled from across the globe to work on large marketing projects. Victor and Spoils is a network of agency trained professionals that collaborate on briefs as independent workers. The founder, John Winsor, is a former executive at Crispen, Porter + Bogusky.

3. The new creative 

For an industry that relies on creative talent, the agency industry needs to do a better job at addressing the needs of the millennial generation.

Tech heaven. In the special report put out by the N.Y. Times, The Work Issue: Reimagining the Office, they reference a survey of millennials asking them to rank their ideal future employer, Google, Facebook, and Apple were high on the list. These are the brands millennials grew up with and they don’t trust the stability of a corporate cubicle. They want to be part of something new. And this desire is not limited to the millennials. Top creative talent from agencies are being poached by the large tech companies. Tor Myren, celebrated Executive Creative Director of Grey Worldwide, recently left to be the marketing lead at Apple. Andrew Keller, former CEO of Crispen Porter + Bogusky, has joined Facebook. And Lars Bastholm joined Google Zoo after high-level creative positions at AKQA and Ogilvy. IBM acquired a whole agency, Resource Ammirati.

Do good to feel good. Another challenge is the rejection of advertising hype. Millennials require brand transparency and positive social impact. This has been a consistent theme in MillwardBrown’s Brand Z report over the last several years. In some cases, there has been an outright rejection of BRANDS as we know them. The documentary “Naked Brand” chronicles the control that consumers now have on their media and tells a story of how corporations need to “tell the truth and work hard to create better products and a better planet.”

4. What is advertising?

What advertising is and what it will be is in the process of being redefined. What if “advertising agencies” and “TV commercials” were a unique phenomenon whose occurrence was a construct of the mass media phase of our culture. Without mass media, and with new digital platforms, how do you define advertising? RG/A New York believes that marketing should be functional and integrated into the brand. This approach was captured in the recent book by their Global Chief Strategy Officer, Connected by Design. They have also redefined their revenue source by partnering with TechStars to form an accelerator. They provide marketing expertise and digital muscle in exchange for an equity stake in startups.

Here’s the good news – agencies are like cockroaches

This was a perspective provided by Rishad Tobaccowala, Publicis Groupe’s chief strategist, and I would take it as a compliment. Good. smart agencies are a sturdy and valuable species relying on the understanding of customers and clients to survive and thrive. In the process, they create great value for their clients and their employees. Mr. Tobaccowala aknowledges that they will need to leverage their strengths and adjust accordingly in order to remain an integral part of free enterprise. The need for creative talent that can creatively solve problems, touch hearts, and motivate action will only grow in the upcoming years. And in true Darwinian fashion, the fastest, most talented, and strongest will not only thrive, but flourish and make a positive impact in our industry.

And that is good news.



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