2018 is already shaping up to be a watershed year, writes Bob Wootton as he reviews adland's major talking points
There’s so much big stuff happening in and around our industry right now it’s almost impossible to see the wood for the trees. Yet we must.
At the ownership level, there are clear signs of intended consolidation in response to the tsunami that is GooBook but will soon be GAFA, GAFAN, FATBAG - whichever combination of massive new players might prevail.
Liberty Global continues to stalk ITV. Comcast has made its bid for Sky, itself wrapped up in a sale of Fox assets to Disney. Vertical integration of the media value chain is the key driver - monetising content, rights, production, subscriptions and broadcasting.
Beyond the family-controlled market leader, out-of-home is largely owned and controlled by private equity. Large-format digital player Ocean Outdoor has bucked the trend, its PE owner Searchlight selling to Ocelot Partners, a special purpose acquisition company (SPAC) listed in London in March 2017 which will take Ocean’s name. This places it well to acquire and grow.
Express Newspapers will soon merge into Trinity Mirror, which also gets a new name - Reach - which should resonate with its advertiser and agency customers.
My regular readers might recall that I think public ownership is not particularly compatible with creative enterprises. Only when it's reverted to private ownership - principally that of Global and Bauer - did UK commercial radio’s fortunes return. Last year it claimed 5.2% revenue growth, ahead of the market at 4.7% which includes the online onslaught that has caused many to consider “flat as the new up”.
And let’s not overlook WPP’s latest set of results, the stock price having fallen some 18% over the last month. Even the previously-infallible Sir Martin Sorrell, who has sidestepped any previous embarrassments with the creation of a new allegory (bath-shaped recession, anyone?) is having to affect a new stance - contrition.
He has a tricky personal path to plough. Still the highest paid FTSE CEO by some chalk, he knows his legacy depends on being at the helm to sort things out. Trouble is, the whole market is moving against him, he’s not getting any younger and there’s no heir apparent.
If it’s turbulent at the ownership level, at the operational level it’s mayhem. There are two big drivers for this:
1. Widening recognition that all is far from well in online. (Never has been but we’ll come back to that in minute).
2. Steadily increasing advertiser dissatisfaction with agency holding company and network behaviours. Of course these two drivers are partly linked.
Those at the coal face - wherever that is - might be amazed how long it takes to get advertisers warmed up on these things, but once ignited their wrath can be something to behold.
They’ve been liberated by the speech Marc Pritchard of P&G gave to the US IAB a year ago and encouraged by its reiteration and evolution across the globe since. Most recently at last week’s record-attendance annual ISBA Conference, where there was a clear sense of advertisers reasserting their influence and power at industry level.
(Dame Carolyn’s eagerly-awaited speech was a shameless pitch for her new employer, ITV, but she’s a media gal at heart, advertising is still their biggest earner and she carries recent client smarts from budget airline Easyjet).
Probably the biggest ‘quiet disruptor’ there was Anatoly Roytman, leader of Accenture Interactive, now the world’s biggest digital ‘agency’. He didn’t even need his allocated 20 minutes to calmly set out their total customer experience positioning (integration again) and give half the audience good reason to be interested while making the rest very afraid.
Independent media agencies, led by The Seven Stars and Goodstuff, are now making inroads into the kind of business that was once considered the domain of the networks.
This is encouraging. These businesses neither want nor can afford to buy business by offering unsustainable pricing. The advertiser attitude towards procurement (which has contributed to chicanery and non-transparency, has fed fraud, compromised brand safety and ignored non-viewability) must therefore be shifting. Long overdue, though these things both develop and disperse slowly.
The many major advertisers who have, herd-like, bet heavily online are in a bind. They can’t now say how filthy it all is as they would expose themselves as negligent, even incompetent.
So a huge game of stealth is being played wherein everybody very gradually and inconspicuously lines up behind the veteran Pritchard, who has an activist investor at his and colleagues’ heels.
Even Unliever’s Keith Weed, who looks like he’s finally come out fighting, is actually picking his words and moments very skilfully. In truth, all these guys need help coming up with new narratives for their shareholders in this area.
As Professor Mark Ritson has rightly observed, no single advertiser is big enough to influence GooBook as they could once sway, say, ITV. Instead they must acknowledge their places and work within them. In consensus (not in concert which would be anti-competitive) they represent a serious force.
The only way to achieve quicker change would be through an amnesty, wherein every marketer could be exonerated for prior neglect and freed to adjust their budgets back from online.
That’s a pipe-dream, though Radiocentre has published a timely and well-received report with Ebiquity which shows rigorously how advertisers and agencies undervalue offline media.
Meanwhile, the cleansing wind of Blockchain’s proposition blows strong. New media agency Truth, whose proposition centres around blockchain and smart contracts, is generating serious client interest and is on the Government’s pitch list for its Media Buying Framework. Blockchain-based media transaction platform Fenestra recently secured significant backing and is in-market now.
And a whole new generation of agency leaders with less fealty to the legacy dominance of the traders is coming on stream and thanks again to Marc Pritchard, reintegration of media and creative is up for grabs too.
As has already been ventured elsewhere, 2018 is going to be a watershed year. About time and bring it on.