Brands are on an inexorable road to a commoditised oblivion

09 Apr 2018  |  Bob Wootton 
Brands are on an inexorable road to a commoditised oblivion

Bob Wootton has spoken with major advertisers about their concerns for the future. Everyone should be worried.

When I wrote my last piece, I had the usual doubts. I certainly believed what I was saying but wondered if my views might be rather isolated.

I had no idea how wrong I could be.

My comments about marketers’ difficulty in weaning themselves away from their addiction to online media in the face of its many emerging flaws really struck a chord. Several senior people from major advertisers have made contact to tell me just how right I’ve got it from their perspective. All have commented anonymously and are eyeing their future cautiously.

I’ve aggregated their comments, which are remarkably consistent across categories, and the story goes like this...

Along came online. Granular targeting, no waste. Holy grail, universal panacea, only truly understood by the younger people who are coming into and now through the workforce.

Volume followed. Everybody goes gaga for online and steers budgets into it. Soon, Google and Facebook get VERY rich and can afford to implant their people within client organisations for free, perpetuating their own good fortunes. Other media can only dream of such access.

Margins bloomed. Many new layers appear in the value chain. Money is siphoned off. Consolidation along the chain means online can be much more profitable for agencies than other media channels. This is important because the ‘clever’ procurement folk have been feeding upon agencies’ determination to compete until it kills them, so online is agencies’ saviour.

Then two things transpire. Online turns out not to be everything it and its aficionados purported it to be.

As the shortcomings of the channel begin to emerge, and not before time, the offline players fight back with more and better evidence of their strength and effectiveness through their marketing bodies (Thinkbox, Newsworks, Magnetic, Radiocentre, Outsmart...).

Meanwhile, many brands and their big company owners are challenged. The data they’re seeing are leading them to ask “why, if we are targeting ever better and reducing waste thus, are many of our brand metrics in decline?”

Although adspend has shifted from them towards online - often driven by short-term pressures like quarterly market reporting - it emerges that the fame and waste intrinsic to the ‘mass media’ were somehow fundamental not only to building brands but maintaining them.

By now, however, the marketing companies are shedding their experienced people and repopulating with younger, cheaper (and much more digitally-inclined but also less experienced) folk.

Most of these have been lured with a ‘digital’ in their title so are not going to vote for Christmas. “If it’s not online, it’s obsolete and off the pace”, goes their new version of the truth, usually finished with a dismissive flourish of “duh”, “whatevs” or “obvs”.

And like dads dancing, their CMO’S have bought into this as part of their career strategy. Already feted for their spending power, they take a leaf from their agency leaders’ books and decide that some personal celebrity based on this platform would be helpful to their and their host companies. Yet attribution of effect is still too often put in the too-difficult box.

The only ‘comfort’ for the brand companies is that both demise and realisation have been relatively slow and masked by the fact that since everybody has been swallowing the same spiel, nobody else has gained competitive advantage.

The ‘savings’ from the perceived ability to reduce marketing investment are sometimes redeployed in innovation, but are more often returned to profit. Baked in to the finances thus, they’re unlikely to return as marketing spend. Which means, to cut a very long story very short, that brands are on a steady but inexorable road to a commoditised oblivion. A vicious circle.

It has all happened so slowly that no-one noticed until things became really conspicuous, and now they are. Some are saying that marketing textbooks will soon show that we are living through a time of mass erosion of brands (which I define loosely as “products surrounded by an assembly of created values and consumer beliefs which underpin a profitable premium positioning”). The venerable Professor Mark Ritson is already on the case.

You could perhaps describe this as a kind of collective corporate addiction. Like addicts, they know their condition does them no good but won’t listen to sense and you can’t reason with them.

So I’m wondering which ‘celebrity’ CEO or CMO is going to realise and seize the opportunity to restore their media mix? As I argued previously, it’s unlikely to be an incumbent as to do so would be to broadcast negligence or incompetence, not a career move.

Nor is it likely to come from many agencies for two perfectly good reasons. Neither can they easily move away from their acquired positions on channel allocation without facing some very serious questions from their clients, but more crucially nor would they want to given the likely impact on their margins.

But newcomers or businesses without the encumbrance of legacy thinking? Now there’s a thought and that’s where I’ll be looking.


Bob Wootton is principal of Deconstruction

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NickDrew, CEO, Fuse Insights on 10 Apr 2018
“Some thought-provoking points and insight there. What I wonder is - what if this isn't to do with digital? What if the decline in brands is actually a larger dynamic, beyond companies' choice of one medium over another? After all, we know that correlation (of digital adspend and brand decline) isn't causation; we can also see that TV adspend has been pretty flat, not in freefall. Overlay this on the apocalyptic stories we're fed about ever-more discerning consumers, cash poor and focused more on features than brand, and one wonders if this is really just down to digital's shortcomings as an ad medium.”
AdamSmith, Futures Director, GroupM on 9 Apr 2018
“On digital's bigger bang, Morgan Stanley notes today 'Curiously, Staples investors and analysts have largely accepted this premise.' Curiously? In my experience, this can be a literal-minded audience. As for agency margins, well, everyone's got an opinion, but public information is arguably even less informative than reported 'A&P'.”

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