December has been a month of conversations, trying to make sense of the year ahead for advertising, media, digital and PR agencies. As the stock market gets hammered, as the anti-corruption movement ebbs and flows, and as the government is semi-paralysed, what will 2012 hold for all? In a nutshell, it’s not going to be an easy year – but there are still those who will gain and those who will hold their own. Here’s the year ahead, in points.
Stable relationships will be important
This is a year when some brand managers, under pressure to bring down costs, will call for pitches. In some cases, the pitches will be for genuine reasons – because they want fresh thinking or are unhappy with the current agency. But in a large number of cases, it will be for no reason other than to force the incumbent to bring down the retainer.
Make no mistake about this – we will see more pitches in 2012 than we have seen in recent years.
Agencies with stable relationships will, therefore, be able to weather the storm easier than the others. Agencies such as JWT (even if they look, currently, to be in some distress), O&M, Lowe, Draftfcb, RK Swamy BBDO, Leo Burnett, McCann and Law & Kenneth–have a broad spectrum of clients with whom they’ve seen good and bad times. These are clients who are least likely to want change in a tough year. In a tough year, they’ll stick to tried and trusted communication partners.
Digital will come to the fore
Agencies will have to have capabilities beyond the creation of pretty ads. Reuters
If the slowdown in 2008-09 saw some marketers testing the waters as far as digital is concerned, we’ll see more demand for digital communication competence this year. Importantly, brand managers will look for more digital communication solutions from the creative agency. Many brand managers are today dealing with the painful complexity of talking to a creative agency, digital shop, PR agency and media agency for large campaigns. Creative agencies with in-house digital competence will gain – and those without, will lose. If the digital contract results in a large retainer, the creative agency can immediately expect pressure to reduce theirs.
There’s a lot of talk about this, but little done. Creative agencies need to come up to speed on digital, whether it’s how a creative director understands the dynamics of the medium or an account executive.
As digital becomes increasingly important, the percentage of media spends on digital will go up – and grow at a frenetic pace. Some categories, such as travel, banking, automobiles, will grow faster than the others. The more the media spend on digital (the impact of which is eminently more measurable than any other medium), the more attention the brand manager will pay to this area.
Digital shops should see 2012 as a huge opportunity; agencies low in competence in this area should see it as a worry. There are solutions, though.
Buy a digital agency quickly, or enter into a solid, binding relationship with one.
Measurement will be of high importance
Agencies will have to answer one question that they are not used to answering. No longer will the question be, “Is this a great commercial?” It’ll shift to “Did this commercial work?” Brand managers will increasingly focus on the measurable impact of their communication – and will even allot disproportionate budgets to the media that is more measurable.
How many in your agency are remotely interested in measurement? How many have the capability to brief a research agency? How many understand the basics of data? How many can have a coherent conversation with a brand manager when he wants to discuss something as simple as detailed IRS data? All this was fairly simple when the media ‘department’ was a part of the advertising agency. Well, it’s no longer a part of the agency – but the need to understand measurement is back with a bang.
In a nutshell, agencies will have to have capabilities beyond the creation of pretty ads.
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