Masterclass Notes: Trends from #AdForumSummit London •

by Johanna McDowell (@jomcdowell) Here are seven observations that stood out at the recent AdForum Worldwide Summit in London, 22–25 September 2019, attended by more than 50 global pitch consultants:

1. The rise (or not) of management consultancies

In recent years, there’s has been much talk in the industry, locally and globally, about the rise of management consultancies entering the marketing space and starting to take over traditional and digital creative agency work. Is this true? And is it really happening?

The answer is mixed. Yes — in some countries where Scopen and AgencyScope are active, keeping in mind that AgencyScope studies the marketing and advertising industry in 12 countries, including South Africa — it does seem like the management consultancies are starting to make inroads. I’ve seen this in countries such as Brazil and China, and less so in the UK but definitely making advances.

[Full disclosure: Scopen Africa was launched in South Africa in 2016 in partnership with the Independent Agency Search & Selection Company (IAS). IAS now owns 26% of Scopen Africa (Grupo Consultores Africa). The IAS, in association with the AAR Group (UK), was founded in SA in 2006.]

Some of the management consultancies such as Accenture have gone a step further and bought creative agencies such as Droga5, Shackleton and Karmarama in order to enhance their marketing offerings. Many of the management consultancies also have digital offerings already in house.

2. Skills shortage

The biggest skills needed right now, based on what I’m seeing in SA and some learnings last month in London, are skills working with data. This is applicable for both agencies and marketers. These aren’t traditional skills to learn and what was heard in London is that agencies ( and marketers ) are directly sourcing people from universities with the ideal mathematical and logic qualifications. Training subsequently happens within the work environment.

3. Digital marketing growth

Growth in digital marketing is about 45–60% globally, albeit off a small base, and I believe that this is going to continue to grow exponentially over the next 10 years. The amount of staff in agencies, I think, isn’t going to grow much at all, and agency size in terms of numbers of people will become less of a benchmark. Traditional agency growth is more in the area of 4% globally.

4. In-house agencies

With ‘in-housing of agencies’ becoming more and more popular, we might start seeing three different types of structures:

Agencies as they are now but possibly not as large — the numbers are not going to grow as they did previously. Data and machine learning might mean that there’s less need for as many staff.
Agencies that are built in-house for clients by their agencies — staffed and run by agencies — and those staff will remain on the agency’s payroll
In-house agencies where the staff are employed by the client company — and with some external assistance from a traditional agency

5. Data control

Marketers want to keep control of their own data and this could be another reason for more ‘in-housing of agencies’. Some marketers who’ve allowed their agencies to have access to and control their data are now taking back control of that data.

6. Buyouts

The days of the holding groups buying up owner-operated agencies at inflated prices and five-year earnouts are over. Future ‘purchases’ will be more likely to have a shares component, rather than cash, and agency founders will not only be required to stay on board but will be encouraged to be part of the growth and stability, as well as keeping an entrepreneurial flair in the business.

7. Leadership

Marketers are looking for strong leadership in agencies and they know that agency founders and CEOs of their own agencies are often the strongest leaders. Startups with big names (lots of experience) will become more common in SA eg in the UK, Electric Blue (John Hegarty), Uncommon (top three at Grey London), and the founders of Adam & Eve who’re starting yet another agency in 2020.