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Big Q – MarkLives Panel
Marc Horne

#BigQ2020: Efficient vs effective

  •   15 Jan 2020
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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 is Machine‘s Marc Horne.

Marc Horne

Marc HorneMarc Horne is the chief strategy officer at Machine (@thisismachine), part of the Publicis Groupe. His interest in understanding human behaviour and his desire to help make brands part of culture have forged his career over the past 17 years.

The only constant is change — an ‘opening phrase’ heard in many of our business-planning meetings last year because it’s never been more true. So, how is the advertising and marketing industry going to not only step up but thrive?

We can’t ignore that the world is heading for a global downturn, what with the latest US-Iran crisis, growth in the US slowing, the looming Chinese debt crisis, the Brexit debacle, the oil markets in turmoil, the ailing Eurozone economy, and the list goes on… The reality is that the world is bracing itself for a recession.

On home soil, we have our own challenges to navigate, too. Our economy has, once again, performed poorly; expenditure pressures mount as the government continues to bail out ailing state-owned entities; sovereign debt continues to rise; we have one of the world’s highest unemployment rates; and, arguably, the most-volatile currency. What all this has resulted in, is low consumer confidence and a depressed business environment. This means businesses are under an immense amount of pressure at the start of 2020. To survive the unrelenting ‘squall’, they’re going to have to continue to look for more-efficient and -innovative ways of doing business.

Era of opportunity

Yes, these times are challenging, but at the same time they remind us of why we work in this industry. This is the era of opportunity. It’s our chance to be part of defining how brands and agencies engage going into the future, and how agencies evolve themselves to meet their brands’ ever-changing requirements.

I believe these trends will become even more pronounced in 2020:

  • New agency models: We are already seeing this internationally with the likes of The&Partnership and Oliver Group, where agency teams across multiple disciplines sit within the brand — effectively becoming a true extension of the brand.
  • Crushed both ways: Business consultancies such as Accenture have extended their strategic consultative relationships to the creative outputs through their acquisitions like Droga5, and production houses are continuing to grow their product output to become more like agencies.
  • Going in-house: More brands are going to build their in-house capabilities beyond having just a “creative studio”. For example, in the past, “strategy” was a key agency discipline but now we’re going to see it become more and more sought-after as a function within brands. WARC’s The Future of Strategy has covered it extensively.
  • Growing role of procurement: The role of procurement is now a major part of the decision-making process. We’re going to see more business being awarded to agencies based on rate cards, more brands being consolidated among fewer agency partners for economies of scale, and the retained billing model shifting more towards project-based work. The challenge for agencies, in the words of Warren Buffett, will be to demonstrate: “Price is what you pay. Value is what you get.”
  • Reinvestment and specialisation: Agencies have realised that they need to properly reinvest into their businesses if they want to lead. I believe we’re going to see agencies investing in more specialists and getting them to work together to create full brand experiences, and we’re also going to see agencies building true data and insights capabilities, so they don’t just have to rely on third-party data.
  • End-to-end: We’re going to see more brands choosing to work with partners that provide an ‘end-to-end’ solution from creative and media to production and so on. This is about efficiencies but, more than that, it provides a real opportunity to create better, more-effective communication solutions. The result of this is that we’re going to see more agencies consolidating their offerings, and more holding-company operating models emerging.

Shifts

These are just a few operational shifts that we should all be aware of, and find the opportunities within. But there’s one major shift we’re seeing in the communication space which has become more predominant over the past few years — and that’s the tendency to focus more on short-term sales and not enough on building long-term profitability. This is the result of pressure for immediate and demonstrable results, overemphasising marketing ROI, and shorter CMO and agency tenures. It’s also the result of the growing role of procurement — in a world where big data and advanced analytics can be overwhelming, the ‘drive’ is about becoming more efficient and, as a result, the focus on being truly effective is lost, as Les Binet and Peter Field’s research has shown.

At the start of 2020, it’s my view that the industry at large will be less seduced by big data and will remember the importance of long-term data; we’ll work towards finding the optimum balance between short-term sales and long-term profitability. This change will shift us back to what we all truly do: build brands.

There’s no doubt 2020 is going to bring with it its own challenges but those who look for opportunities in these turbulent and uncertain times will be at the forefront amid all the change.

Here’s to an exciting 2020.

See also

  • #BigQ2020: A brave new world! — Prakash Patel
  • #BigQ2020: Hello, blurred world! — Naeem Seedat
  • #BigQ2020: A new decade of change in the advertising industry — Johanna McDowell & César Vacchiano
  • #BigQ2020: A focus on the unchanging — Faheem Chaudhry
  • #BigQ2020: The future is here — Jarred Cinman
  • #BigQ2020: The rise of behavioural science — Rita Doherty
  • #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

 

MarkLives logoLaunched 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.

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