Advertising’s Mad Men and Women are going through one of their occasional bouts of hand-wringing introspection when they fret about whether their business is doomed and how they can save it.
Rory Sutherland, the vice-chairman of ad agency Ogilvy, has warned the industry is “in crisis” because it has become obsessed with digital “efficiency”, instead of focusing on creativity, persuasion and human insight.
David Jones, the founder of You & Mr Jones, a marketing tech group, says that agency holding companies such as WPP risk ending up “like Kodak” — the camera film firm that went bankrupt as its industry evolved — because “the traditional advertising industry is now a no or low-growth industry”.
And the Advertising Association will tomorrow unveil research at its annual LEAD conference that shows declining levels of public trust in advertising as Britons feel they are facing a “bombardment” of ads.
All of this reflects the fact that advertising is struggling to cope with technological disruption.
Firms are rethinking the role of advertising because digital communications as a whole are becoming central to how they work — from search and discovery of products to e-commerce and ongoing customer relationship management.
Advertising still has an important role but now companies need to create and manage a huge volume of other brand content and collateral for their websites, apps, social media feeds and so on. What’s more, the speed required to deliver this digital content is increasing and it all needs to be joined up and underpinned by data and technology.
At the same time, advertisers know they need to avoid stalking consumers or placing online ads next to inappropriate content.
No wonder so many companies such as Unilever, Vodafone, Barclays, TSB and Go Compare are bringing some of these digital marketing services in-house, rather than using so many external agencies. These brands want greater control and to reduce complexity — “better, faster, cheaper” is the mantra.
Jones’ talk of the agency sector facing a “Kodak” moment may be overly pessimistic but he is right to identify in-housing as a threat. It is also an opportunity as his firm has just taken a majority stake in Islington-based agency Oliver, a pioneer in helping companies to set up their own agency “on-site” in the client’s office.
Brands handling basic, digital communications and fast-turnaround content themselves is going to become the norm. But no one should be foolish enough to think that in-house marketing teams, which are sometimes based far from London, are suddenly going to become magnets for all the best creative talent from Soho and Shoreditch.
As Sir John Hegarty, the co-founder of ad agency BBH, put it recently when he explained why he couldn’t imagine working in-house on one brand: “You will spend your whole life working on f***ing baked beans.”
Companies that want the best ideas and original thinking are always going to need external agencies and talent, particularly for high-level brand positioning and creative magic and to keep up with new technology.
A string of recent ads illustrates advertising’s enduring power to generate fame and become part of culture.
Gillette’s “The Best Men Can Be” highlights “toxic masculinity” by showing men in a series of positive and negative poses, without a razor in sight, during the two-minute US ad that has gone viral. ITV’s “Great Characters Make Great Drama” campaign features the lead characters from hit shows Endeavour and Vera talking in soaring tones about the power of drama in two epic ads aimed at upmarket viewers.
And Barclaycard has shown its support for small businesses by producing a wacky ad featuring a couple in white coats from Kettering who sell crystals — complete with new-age soundtrack.
In each case, the brand wanted to stand for something, challenge perceptions and communicate in an evocative manner, and advertising was an effective way to do that.
All three companies turned to an external agency. Significantly, ITV used new, independent London outfit Uncommon and Barclaycard appointed another independent agency, Droga5 — proof that large corporations are willing to try something different in the search for creative edge.
These twin forces — advertisers taking more control and bringing services in-house while needing the best, external creative talent and tech know-how — are two of the key drivers reshaping the ad industry.
It is a tricky balancing act for advertisers as they weigh up the relative merits of short-term digital efficiency that drives an immediate sale or response and long-term brand-building that can boost awareness and consideration.
Increasingly, this brand versus performance conundrum is about the tension between creativity and technology — the magic and the machines as Sarah Golding, the president of the Institute of Practitioners in Advertising, puts it.
As the ad industry wonders how to rebuild trust and stop bombarding consumers, there’s an obvious step: invest in creativity.
Gideon Spanier is global head of media at Campaign