Building for the future of advertising
Tim Irwin, CEO for Essence in EMEA, discusses the evolution of advertising for a more ethically and environmentally conscious world
I was discussing careers with my 16-year-old son recently and he asked whether I thought he would do well in advertising. I told him that I thought he’d be perfect (of course).
Thinking about his question more deeply later that day, I reflected on what a career in advertising might look like in a decade’s time and whether advertising – or certainly agencies as we know them – will even exist.
It’s a gloomy outlook for his generation, with Gen Zers understandably concerned about the impact of climate change and expecting the pandemic to leave us less equal and more divided.
It’s perhaps not surprising that younger consumers put a premium on ethical behaviour as a result. 18–34-year-olds are most likely to choose brands based on their values and take action in their own lives to lessen their impact on the environment, like reducing meat and animal-product consumption.
Of course, social and environmental concerns aren’t the only things on the mind of the next era of consumers. In almost every measurable way, millennials are worse off financially than the generations that came before them.
Fewer millennials own homes than their parents did at their age. They have more debt (especially student debt), less disposable income, and less interest in disposable products or unsustainable lifestyles.
For advertising to be relevant to generations beyond Boomers, it will need to reinvent itself to address two existential challenges.
The first, that rising anti-consumerism will lead people to reject the idea of advertising entirely, perceiving it as driving unsustainable lifestyles, which threaten our future on this planet.
The second, that the value exchange at the heart of advertising’s business model itself will fall apart if we do nothing to restore it.
Sustainability remains a key consideration in 2021 with 32% of consumers already living sustainable lifestyles.
Gen Zers are adopting more sustainable behaviours than any other groups: 50% reduced how much they buy and 45% have stopped purchasing certain brands because of ethical or sustainability concerns.
As wealth begins to transfer to younger generations, sustainability and ethical considerations will need to become core to the stories marketers tell about their brands, with transparency across the value chain.
In fact, our own research on the future of advertising says that this will be as important as price by 2030.
The second threat to advertising is that the core business model advertising relies on is at risk of becoming obsolete or devalued to the point of obsolescence.
Traditionally, advertising makes content free for consumers in exchange for their attention – and creates audiences or marketers in return. Will this model be replaced by subscription models instead?
The rise of the premium subscription or video on demand (PVOD) services has shown that consumers are happy to pay to eliminate advertising from their content experience when the product is good enough.
While advertising today operates across more than a single revenue stream or business model – commerce, technology, and quality experiences are all additional levers available to utilise – the need to fundamentally reinvent the medium around the attitudes and expectations of new audiences is clear.
Reassuringly, that transformation is well underway.
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In terms of sustainability, WPP and GroupM have made an industry-leading commitment to carbon neutrality in business and advertising by 2030 and many brands are making their own sustainability commitments with hard deadlines as well.
According to Kantar, 80% of UK consumers agree that companies should be doing more to be sustainable and nearly 90 brands have set their own ambitious targets to tackle climate change, following the UK Government’s announcement to be Net Zero by 2050.
At Essence, we want to help companies understand the environmental impact of their media plans in order to get to carbon neutrality in their marketing and begin to lead the conversation with consumers.
How can marketers lead on these issues while remaining true to their brand? Our advice is simple:
- Identify authentic ways to lead based on what makes sense for your organisation, for your vision, and for your customers?
- Empower change: make it easy for people to be part of your progress.
- Embrace dialogue and demonstrate transparency by sharing the inspiration behind your commitment and behind the scenes stories on your progress as you follow through.
In my personal view, it’s important to anchor sustainable attitudes and culture across the full spectrum of your marketing operations and initiatives.
Elevate higher value, longer lasting goods and services and use longer term, more holistic KPIs to measure success.
Remember that marketing has an almost singular ability to coordinate behaviour at scale, giving marketers unique ability to shape behaviour for the better. Embrace this power to help save the world while there is still time.
And keep in mind the importance that advertising plays in supporting universal access to reliable information – crucial in a world of fragmenting realities and narratives.
We must think hard about how to level-up the value that we are creating through our marketing for consumers in order to preserve it. The post-pandemic era must be one of radical experimentation in creating value for people through marketing if traditional forms of advertising are to survive.
Our industry has always been a tool for realising change. From public service campaigns to driving technological adoption and global culture, advertising has been pushing boundaries for decades.
Agencies have adapted as the mix of mediums themselves have morphed: from print, to radio, TV to the internet and beyond. Now is the time for us to use what the previous decades have taught us to adapt and lead rather than react – with a focus not just on growth and technology, but on sustainability and value.
I am optimistic that rather than serving as a death knell for the industry, the pandemic will help to ring in a new era for marketing and advertising.
I’m confident in this hope, because I know it will soon be led by a generation of people (my own son, hopefully among them) for whom sustainability, resilience, and innovation go hand in hand.