Is advertising on a suicide mission to wipe itself out?

I have recently returned from running a creative director’s leadership course in Kuala Lumpur  on behalf of the 4A’s Malaysia - which identified the need gaps in management skills amongst creatives. Here are some key themes I am hearing from all around the world with both clients and agencies:

    • Trust has evaporated

The relationship between client and agency has shifted dramatically over the past decade.   This is due to a mix of both being let-down in the past and also the ‘decoding’ of communication (which means clients believe they know how to ‘do’ communications). This is leading to an increasing trend for clients to move many communications function ‘in-house’.

    • Execution devoid of thinking

Such is the contagion of digital ‘always on’, that agencies are often reduced to becoming just production lines of execution - often devoid of any real strategic thinking. People have no time to think. Everyone has their heads down trying to feed the hungry monster of digital. People on both sides are rarely applying critical thinking. Today, I find that no-one is really asking, “Why are we doing this?”

I know of very few people - including senior management- who really enjoy working in agencies.

Where’s the mental stimulation of solving complex problems? Where’s the fun which is so often necessary in creatively stimulating environments? Where’s the debates and banter? All we see now are people rushing around or wired into their computers, zoning-out in mass isolation.

    • The devaluation of creativity

With AB testing, algorithms and improved targeted messaging, it’s easy to dismiss the role of creativity.

For example, one might think: “If I can target a mother who has had a car accident, then merely saying ‘Volvo’s are the safest cars’ is certainly enough to catch her attention – so why do I need highly expensive, creative solutions?”

But this misses the key point. In a world of decreasing and fragmented brand budgets, creativity is a critical competitive edge. It leverages the power of the media spend. It can make a US$2m budget feel like US$3m (and weak creativity can have the opposite effect).

Critically in a world of over-stimulation, creativity is the vital ingredient to cut-through the cacophony of noise that bombards our senses every-day. Furthermore, the work by the Chartered Institute of Practitioners in Advertising (IPA), has shown amongst others, that creativity not only builds brand values, but it also increases sharing.

That said, the ‘science’ of communications will never replace the ‘art’ of creativity.

The reality is a data driven, deconstructive approach to how comms work is always rearwards facing. Take all that evidence and all you ever produce is derivative communications. The very art of creativity is about breaking the code and doing new work that is unexpected. Sure, AI may help deal with low value ECRM/social media postings, but brand building will still need to be in the hands of gifted creatives rather than machines or diagnostic tools.

    • Lack of added value

The perceived added value from agencies is rapidly disappearing.  I often say, if all we are is a production house, then we are all just printers down the road. How do you think you would react if they called you up and said, “Hey, could you share with us your business plans? Oh, and whilst at it, that brochure you want us to print?  We have a better idea for you!”

You would no doubt retort, “Just print what we told you to and make sure they are delivered by 4.30 tomorrow – Oh and remember you promised to do it for me for a 10% discount on last year’s rate!”.

No wonder agency finances are in a real pickle. It’s a downward spiral. Since clients feel they are not getting the value from their agencies, they are allowing procurement to slice their budgets to pieces.

Furthermore, since agencies are increasingly part of a global network, their invisible bosses in HQ are demanding the same if not higher margins (especially as the stock market is increasingly questioning the communications industry as a stable and transparent place to invest in).

Thus, local CEO’s have to reduce their largest cost – staff - often by over-promoting younger, more inexperienced staff. The result is these people often do not have the skills or experience to add any real business value. They have little influence or authority over the client, and end-up just running back and forth between client and creatives.

Thus, it is no surprise when the brand team feel a lack of added-value and want to cut the fee even further.

Yet the sad reality is the client is facing the biggest challenges both within their own organisation (where marketing is being asked to step up and ‘show them the money’). Clients are also struggling to negotiate the right strategy in a very confused, constantly changing new media world and changing consumer expectations.

So, they need communications’ consultants in this field more than ever – and if agencies cannot deliver this, they will have to seek answers from other consultancies (ironically at much higher rates).

So, what can we do about it?

The answer is simple but difficult to implement – ADD REAL BUSINESS VALUE. There are five immediate strategies for this:

    • Focus

The simple answer is ‘focus only on the important’.  Less is always more.  The agency and client need to reduce the amount of executions produced and serve the ‘filet steak’ pieces of content rather than the ‘popcorn’ messages that clutter and confuse. As my grandmother used to say, “If you have nothing worthwhile saying, say nothing.”

With so many messages now, it’s even more critical to be brutally focused on what our brand stands for and its benefits to our customers.  Agencies and clients are like magpies, chasing any bit of glittering new technology/media opportunities. Just because you can, does not mean you should.

    • The balance sheet

In the old days, an organisation was valued primarily by its tangible assets. Nowadays, we are seeing the value of an organisation becoming increasingly valued by its intangible assets. The key intangible asset is ‘brand’.  If a CEO wants to build the value of their organisation, the most effective way of doing so is building the brand.

So, who are ‘experts’ in brand building? Communication agencies.

But, we are missing the real point of communications. Rather than helping to devise big brand building ideas, we are clogging up the airways with meaningless topical bits of ‘engagement’ which last a nanosecond before being replaced by another brands pointless chattering.

    • Proving effectiveness

In the board room the battle is always over investment – where ROI wins out over idea or insight.  We all need to invest time proving to our clients that our work is generating real business growth. We need to first and foremost be business people - who just happen to wear advertising suits.

    • Revaluing creativity

Our whole ‘raison d’etre’ is to be business consultants who solve their clients business problems through the power of creativity. Without creativity we do not exist! Indeed, as we move into VUCA situations (volatile, uncertain, complex and ambiguous), rational thought no longer provides the answer. We need lateral leaps to find new solutions.

You only need to look at what the main management consultants are investing in to see that they are also realising that we need to find new ways of thinking . For example, Accenture purchased Droga5 last month, having bought the UK agency Karmarama two years ago.

The trouble is, left brain, logico-deductive cultures of most organisations will not allow creativity to thrive (including these management consultancies). It needs a completely different cultural space for creativity to germinate.

So, rather than creativity  and creative ad agencies being an outmoded concept, it is actually more important than ever.  I think the brief every agency needs to be working on is ‘How to convince clients of the real added value creativity brings to their business’.

    • Training

We need to properly invest for the future of our industry by training in the skills to becoming proper business consultants (as training is significantly cheaper than hiring-in the skills).  Key areas include training in Business (e.g. a mini MBA), Strategic Planning, and how to evaluate the effectiveness of a campaign – areas  4As  Malaysia are investing in for its agencies.

So, in conclusion, if agencies carry on the way they are, they are destining themselves to becoming a low value, commoditised category, allowing a new breed of consultancies to attempt to add the creative spin that builds true company and brand value. The opportunity to re-grasp our competitive edge is now!

The writer is Paul Arnold, a trainer for the 4A's Malaysia.