As I lay awake last night at 4am unable to get to sleep, I got the feeling renting an apartment on a busy street in Union Square, NYC, wasn’t the smart option I thought initially it was. Especially with a full day ahead across Ad Week and MIXX fast approaching.
In case you’re wondering, I made it through. Humidity in NYC today was intense and definitely not long pant friendly. Thankfully for the NYC locals I kept the legs covered and tried to keep cool.
At the NY Times Theatre there were 2 CEO summits that I attended today. Bloomberg’s Betty Lui hosted the first session with CEOs from Arnold, JWT, Publicis and Global Hue.
Andrew Bennet of Arnold confessed that integration was something the industry hadn’t really cracked yet. Susan Giannino of Publicis stressed the importance of consumer focused, not channel focused strategy (especially in this era of digital hysteria) and Bob Jeffrey of JWT commented that agencies had done a great job of devaluing their own work by becoming far too executional and commenting that agencies need to develop “big, transformational ideas.”
One topic that became a focus of this, and the next session was around the challenges of agencies to retain top talent. Whilst the changing nature of media consumption creates opportunity, it creates huge resource and talent challenges that generally the agencies are doing a terrible job of managing. In AU I have noticed massive churn, especially in mid level roles, in both media and creative agencies … with many people either heading publisher side (for more money, less hours) or leaving the industry altogether.
The panel agreed the industry does a “horrible” job of nurturing talent, outlining that most companies invest less than 1% of revenue into training whilst other Fortune 500 companies are investing 5% or more. This led to a discussion around the issue around holding companies, with comments suggesting that the bean counting nature of holding companies has made advertising a less fun, less imaginative and less desireable place to work.
Around the issues of remuneration, it was pointed out that consultants (like BCG, Mckinsey etc) have done a good job of tying remuneration to a deliverable. ie – they come in, suggest varied changes that will save $x million from a bottom line. As a result of them delivering a cost saving they are in a better position to extract more fees. Advertising agencies not so much as they struggle to tie remuneration to anything but FTE’s and a multiple. I got the feeling that agency types debating about dwindling fees indicates that there’s either too much supply or too little good ideas … or both.
Fast Company hosted another CEO summit with participants from BBH, Mediabrands and Co. This one talked more about the need for leadership in advertising. The participant from BBH commented that clients are “crying out for leadership” and that because they weren’t getting it from traditional agencies, “they looked elsewhere.” (apologies for not knowing the participant from BBHs name, it wasn’t mentioned and his details aren’t on the Ad Week website)
It was also remarked that ad and media agencies are no longer C-Suite partners and that there are legitimate questions around their value. I got the feeling today the agencies are completely confused – they are unsure what they are (EVERY agency – media/creative/otherwise – is calling themselves ‘digitally led’) and are kind of blindly heading towards whatever they feel clients are wanting.
There was also talk about agencies issues with holding talent. The thing that is weird is that I was Adtech in SF 2.5 years ago and this was a big topic. Sadly, nothing has been done and great creative, curious minds are losing interest in the advertising world.
The Fast Company session seemed like more of a confessional around the very real, very difficult current challenges than a celebration of the future. What is an agency in 2010 and have they lost their handle on what they’re supposedly good at. There appears to be less committment to great planning, great consumer insight, great creative ideas and tremendous execution and more to ticking boxes. If I’ve taken anything away from Advertising Week, the big agencies are in a bit of trouble.
I headed over to MIXX at 3 to catch Google talking up their ‘reinvention’ of display advertising. This was the big event that the ‘Watch This Space’ trade campaign had been leading up to. For Google, they want display medai to be ‘sexy and smart’ … they even said that they would “bring sexy back” to display and that there was too much emphasis on direct response today (erm …)
Goog’s Neal Mohan and Barry Salzman presented 7 relatively bold predictions about where display media was heading and where it would be in 5 years. It’s clear from reading the trade rags and following the GOOG stock price that Google needs a growth tool for share price increases and it appears to be putting its bets on display media to offer them some solid growth over the next 5 years.
It makes sense, the Doubleclick acquisition was a $5bn US undertaking that needs to yield, plus many are wondering how the company brings together all its diverse acqusitions into something that can generate financial returns. Google, like Apple, appears frustrated with the bleak current climate around display advertising (Apple is taking on display with iAds) and is effectively doing a giant trade marketing job for the entire industry. This must be commended.
So Google’s 7 predictions for display advertising by 2015
1/ 50% will include cost per view video (Google is wanting to move video advertising to a more user initiated, cost per view model. They are also introducing an ad selector type model to pre-roll)
2/ 50% of audience buying will happen in real time (ie, exchanges as well as real time updated creative)
3/ Mobile to become the number 1 screen (makes sense given Goog’s focus on Android)
4/ The click is not an important metric (Google talked about being able to measure the in store foot traffic impact of a display ads, offline sales impact etc)
5/ 75% of ads would be socially enabled
6/ Rich media would feature in 50% of brand campaigns
7/ Display media to be a $50bn global business in 2015 (a 110%+ increase over next 5 years)
Relatively bold predictions – but you would expect that from a company that is trying to sell more ads and generate business. Google has the luxury – like Apple – of seeming like an impartial technology guidance company when it makes bold claims despite it being the leading advertising company in the world and a company that firmly has its sites set on taking ad share from others. Google’s idea is to make display seem interesting, hence engage the creative community, hence migrate dollars from TV.
It was a good presentation, but I couldn’t help but think if it was Yahoo or MSN presenting the same sort of futurist claims people wouldn’t have taken them that seriously.
For Google to take display from x to 2.5x in 5 years says to me they need new talent and people that understand the area of display. Much has been said of late around Google’s prohibitive hiring policies (ie, only hiring people with certain degrees, certain marks and certain universities) getting in the way of development of the business and one thing I can safely say about digital sales in Australia is that there is a huge talent shortage. Adding another hurdle around academic success makes that already small pool even tinier.