AdForum Worldwide Summit LA: How to win the convergence race
by Johanna McDowell (@jomcdowell) What was different about this leg of the 2016 Adforum Worldwide Summit is that, in Los Angeles, the influence of Hollywood, the artist agencies, literary and film content has a huge bearing upon marketing communications locally and globally. And over four days we met with those key players, along with 11 of the legendary agencies in the city.
LA is a large sprawling city, nothing like New York. It’s very similar to Johannesburg in layout ie suburbs, big buildings, modern adjacent to ancient, big highways, and appalling traffic. But it’s laid back and we were staying a hotel in Santa Monica a stone’s throw from the beach — a complete contrast to NYC.
Once again, we were taken around in a coach, allowing us time to see the city, see the surroundings and talk to each other after each visit. Just the most fun.
Day 1 — Los Angeles — Saturday 8 October
Yes, folks, we pitch consultants do work agency hours, and the two agencies we met with on Saturday had put an enormous amount of effort and work into their respective meetings with us. We flew to LA on Saturday morning (a six-hour flight) and then were three hours behind NYC time, nine hours behind South Africa.
- KBS+: part of the MDC network
- Chandelier: independent and proud of it
KBS+ opened in LA because it needed to and it wanted to create something relevant to LA. For that reason, it is creating opportunities for young key influencers to develop their talents and careers. It is all very experimental, and the social media wing of KBS+, About Attention, will then use these opportunities for clients. Examples such as Infatuation, a restaurant guide and food blog created through Instagram, and a photography influencer who is using major new photographic equipment for self-filming and production, were used to illustrate what is ground-breaking in this particular area.
Creative agency Chandelier had prepared a whole presentation based upon the marriage of style and substance, literally showcased in a wedding. Beautifully scripted and choreographed, it created an unforgettable spectacle that the consultants will remember forever. Using actors and creatives to illustrate its ethos, we were treated to a full “wedding celebration”. Creative, above line, integrated, using all forms of channels — this is the agency for today’s market.
As long as agencies remain committed to new levels of creativity and are prepared to invest, they will be successful with clients.
Day 2 — Los Angeles — Sunday 9 October
- Anomaly: one of the most successful agency groups in the world
Anomaly has NO TIME SHEETS! Output-based contracts and incentive-based fees. Its margins are easily above 20%, sometimes as high as 29%. Most of its clients are on performance-based contracts. It has just opened in LA and is dramatically expanding its in-house production facilities, shooting more film and doing post-production. It has also made a fundamental commitment to data and is building software that provides actionable intelligence. 2016 has been its best year to date.
With them, after the update, we watched the second Presidential Debate with Hillary Clinton and Donald Trump—an education!
Agencies and marketers which are brave enough to try out incentive-based output contracts make far more money than those trapped in the time-sheet downward spiral.
Day 3 — Los Angeles — Monday 10 October
- Hylink: digital solutions agency
- Red Hour: film and content company
- Applied VR: Lieberman Research Worldwide
- ICM Partners: talent and literary agency
- TBWA\CHIAT\DAY: legendary agency
- CAA Marketing: marketing agency within the world’s leading entertainment and sports agency
Hylink is the largest in China, with 15 offices plus one in NYC and another in LA. Independent, 2200 digital professionals. Digital spend in China increases 45% per annum!
Red Hour has Ben Stiller as a partner. Moving into branded content more and more.
Applied VR demonstrated the real value of Virtual Reality and what this can do for brands, people and communities.
ICM Partners: “Brands will be the next great producers.” “Advertising budgets will become profit centres, not cost centres.” Short-form digital content for brands — distribute on the web. 600 people worldwide.
TBWA/CHIAT/DAY: its Backs\ash technology produces Disruption Live, a daily monitor of observations from all over the world with 200 spotters, made into videos on a daily basis and distributed throughout the TBWA network. Unbelievable investment in its business, which is paying off to the extent that it has an 87% success rate in pitches and has built a fully functional editorial team as part of its agency offering. The top team had just been in SA, pitching on MTN — more news it hopes very soon.
CAA Marketing: 75 people within the marketing agency; top team is all ex-advertising. “The best brands in the world go beyond interruptive advertising to generate and participate in popular culture.” “Brands will increasingly use their funds to create content relevant to their audiences.”
Day 4 — Los Angeles — Tuesday 11 October
- Screen Vision Media: cinema screen advertising and media owner
MullenLowe was one of the best agency visits this trip. Its merger has worked — 12 months on — and it’s still the world’s most-effective agency network. The LA agency has seen huge growth and has also invested in PR people, social media and content production. Its YETI production facility enables it to deliver overnight and accurately.
Screen Vision Media again often directly works with clients, not via agencies. Content creation and integration.
Ad agencies that focus on their own production facilities and build PR and social in house in a meaningful way are winning the convergence race.
And that’s a wrap of the Los Angeles report.
Johanna McDowell (@jomcdowell) is managing director of the Independent Agency Search and Selection Company (IAS). This time, she has deviated from her usual daily reporting format as it doesn’t properly encompass all of the key learnings that pitch consultants are exposed to. She will be doing a full report back, as well as showcasing studies from the agencies, at her upcoming Marketing Masterclass sessions. The Joburg masterclass is on 26 October — which is already heavily booked but there is still place available — and the Cape Town one is on 29 November. Book now!