#BigQ2020: A new decade of change in the advertising industry
by MarkLives (@marklives) What are the industry expectations for the marketing and advertising industry in 2020? A panel of key agency and marketing execs discusses the macro environment, budgets, changes in messaging, movement in the industry and any consumer and communication trends they’ll be looking out for in the year ahead. Next up are Scopen Africa‘s Johanna McDowell and César Vacchiano.
Johanna McDowell & César Vacchiano
Johanna McDowell (@jomcdowell), Independent Agency Search & Selection Company (IAS) founder and CEO, and César Vacchiano (@cvacchiano), Scopen global CEO and co-founder, together formed Scopen Africa in 2016. They’ve known each other since 2009, when they first met at the AdForum Worldwide Summit in New York. Both Johanna and César are recognised as leaders in the consulting space for marketers and agencies. Since 2016, AgencyScope, Scopen’s primary product and study which encompasses key learnings from the marketing community to enable agencies to improve their performance, has been run in South Africa with three times.
As 2020 begins, it’s really interesting to review the changes that have happened in the last decade, let alone the last 12 months. The pace of those changes has also varied considerably at times globally and locally.
In the past 10 years, more new agencies have opened in South Africa; there have been many mergers and acquisitions, mainly by the holding companies; and black economic empowerment (BEE) has been instrumental in transforming many aspects of agency and marketer life. We don’t see the change happening until after it happens but we just “feel” it.
- Masterclass Notes: Trends from #AdForumSummit London — Johanna McDowell
- Masterclass Notes: Key global trends in advertising & comms industry — Johanna McDowell & César Vacchiano
- #BigQ2019: How much change will there really be? — Johanna McDowell
- Masterclass Notes: 2018 AdForum Summit observations & trends — Johanna McDowell
- Masterclass Notes: Highlights from agencyScope 2017 South Africa
- #BigQ2018: Marketers to take digital in-house at unprecedented rate — Johanna McDowell
- Masterclass Notes: Trends from agencyScope SA 2017 fieldwork — Johanna McDowell
- Masterclass Notes: agencyScope 2016 SA — what marketers want — Johanna McDowell
In addition, our economy in the last 10 years has been on a downward trajectory and that has had a huge impact on the industry and on how people think. Marketers commented to us last year how 2019 budgets for agencies are much the same as in 2011 —meaning little growth for those agencies — although our Scopen AgencyScope 2019/20 study tells us that marketers are actually spending more and spending it differently.
So where to from here? We present 10 trends for 2020 and the decade to come:
#1. More diversity in the senior marketer space
We foresee many more senior marketing women in the corporate space. These are women at decision-making level, able to hire and fire agencies, approve marketing campaigns etc. In AgencyScope data, the male/female split was equal, if not slightly more favourable to women, in 2019; this trend will continue into this new decade. One day soon, we’ll have more women in CEO positions, as this is still a very weak area.
#2. Less diversity in the senior advertising space
In contrast, there are very few, if any, female CEOs in the advertising agency space, although there is greater representation in the media agency territory. Women at senior level — board director, shareholder in agencies and especially at chief creative officer level — are very thin on the ground and, as we saw recently at the 2019 AdForum Worldwide Summit in London, that this is a global phenomenon. So, it feels as if we’re going backwards in gender diversity in agencies.
#3. Digital work
As predicted, digital has changed everything — the way we live the way, work, respond to advertising etc. This has probably been the biggest and most-comprehensive change in the past decade and has accelerated in the past three years, in particular, with the advent of digital media and digital content now able to do things (from a tech point of view) that were only imagined in the 2000s. This can only accelerate and lead to a greater diversity of digital capabilities in the future.
Marketer preference for integrated agencies which can supply all of their needs is much the same as it was a couple of years ago; however, we see the increasing demand for closer involvement with the creative and media agencies and some agencies, as a result, are starting to either bring more media skills in house or more creative skills in house, depending on the core skill of the agency. However, the majority of marketers work with specialist agencies because they need the variety of skills — marketers work with an average of three creative agencies (ATL, BTL, digital) and one media agency.
#5. Account service
On a very granular level, account service has become a tipping point for marketers and agencies alike. The kind of skills level that clients need now — within agencies — has to be led by individuals with vast experience and knowhow in order to master all of the different components of advertising — and not always found in the same agency.
These client-facing individuals are rare and are more like business consultants or the business partners that clients desperately need to have in order to ensure their marketing delivery needs are met. Some agencies are now structuring their businesses this way; some are hiring in highly experienced top-level people (from marketer or management consultancy backgrounds) and, while this might seem an expensive way of making this happen, the value that they add is inestimable.
These people are not the old style “glad-handing” client service directors; they are business consultants and business-minded individuals whose grasp of marketer needs, along with a full understanding of and appreciation for the impact of a creative product, are the combination of skills that are now required.
#6. Results & effectiveness
Results and effectiveness continue to grow in importance. Now that marketers can measure everything, they are being held more and more accountable by their CEOs for results from their advertising campaigns. This, in turn, puts their agencies under even greater pressure to deliver and to demonstrate results. Smarter agencies are starting to spend much more time on their success stories and case studies which show how effective creative work delivers tangible sales and results fornbsp;brands.
Now that SA has become part of the Effie Awards via the Association for Communication and Advertising (ACA), which has replaced the local APEX Awards with this international effectiveness awards show, it will be a further opportunity in 2020 for the country to demonstrate more effectiveness locally and globally. Also, the Effie Index is something that marketers aspire to have on their CVs, so this area will grow in importance.
In-housing of certain marketing activities has increased (not as much as in some other countries such as the UK) but more and more marketers are handling in-house their own strategic planning, CRM and digital performance, as well as the more-obvious social media and community management, DTP etc.
Smart agencies will have to find a way to provide their services — especially for creativity and production — in such a way as to stimulate the internal client team, allowing both parties to excel in their particular areas and to ensure that savings are reinvested to produce better results for the marketer which, in turn, will increase ove all budgets into the future.
#8. Increasing relevance of independent agencies
Clients believe that independent agencies have a better understanding of the consumers and categories, are able to identify local insights for strategic planning, and produce faster responses and with better value for money. In SA, and other countries, independent agencies occupy strong positions in the creativity rankings, and are becoming more and more attractive options for marketers when producing shortlists for pitches.
Consulting companies aren’t yet perceived as strong as agencies in contributing to clients’ growth. Overall, globally, advertising agencies contribute by 35% to client growth, media agencies by 27% and PR agencies by 26%. However, consultancies are still perceived as contributing less than 20%. Amazon, Google and Facebook are ahead of business consultancies and are fast approaching agencies in their contribution to business growth.
Clients will increasingly working on project-based relationships with their agencies. Even if they maintain relationships on an ongoing basis with their agencies and there’s an annual fee, clients will remunerate their agencies project by project that are developed during the year. At the same time, we foresee less incentives and bonuses at the end of the year. CFOs on the client side don’t like to integrate these bonus formulae into their budgets, and agencies no longer want to take the risk because clients don’t always pay, even if the agreed-upon KPIs have been reached.
- #BigQ2020: A brave new world! — Prakash Patel
- #BigQ2020: Hello, blurred world! — Naeem Seedat
- #BigQ2020: A focus on the unchanging — Faheem Chaudhry
- #BigQ2020: The future is here — Jarred Cinman
- #BigQ2020: The rise of behavioural science — Rita Doherty
- #BigQ2020: Efficient vs effective — Marc Horne
- #BigQ2020: Client, agency expectations for 2020 — Keri-Ann Stanton
- #BigQ2020: 20/20 vision — Masego Motsogi
- #BigQ2020: It’s time we talked about money — Michelle Beh
- #BigQ2020: It’s the evolution of the world as we know it… not the end! — Tumi Rabanye
- #BigQ2020: Speed to market in a cancel culture — Leigh Tayler
- #BigQ2020: Personal, visual & always visible — Shaune Jordaan
- #BigQ2020: Back to the future — Wayne Naidoo
Launched in 2016, “The Big Q” is a regular column on MarkLives in which we ask key advertising and marketing industry execs for their thoughts on relevant issues facing the industry. If you’d like to be part of our pool of panellists, please contact editor Herman Manson via email (2mark at marklives dot com) or Twitter (@marklives). Suggestions for questions are also welcomed.