Articles

PREDICTING A NEW ERA OF ENERGIZED PARTNERSHIPS, FIERCE GROWTH, DRASTIC CHANGES, AND NEW WAYS FOR CLIENTS AND THEIR AGENCIES TO COLLABORATE

Max Gralpois

2/3/2019

Advertisers and Agencies: Are You Ready For 2020?

FORGET ABOUT 2019 PREDICTIONS. The year 2020 is glowing on the horizon, fueled by opportunities, innovation, transformative forces, and yes, the fear of the unknown. There have been many attempts to get a glimpse into the future and predict what 2020 would look like for the marketing industry. The conversation often spans a vast territory ranging from data and technology advancements, ever-changing consumer experiences, innovative media, content and production capabilities, and the talent those demand. For brand leaders, it’s about securing new skills that are critically needed–both internally and externally with agencies–to take on the competition and best organize for growth. To understand what to expect for advertisers and agencies in 2020, we first need to elevate the conversation to review major marketing trends and priorities.

Industry trends and CMO priorities

Leading authorities such as Adobe, Gartner, Forrester and other industry players regularly publish their findings on the evolving role of marketing. These combined studies, often based on CMO interviews, give us a unique vantage point into shifting CMO priorities. For example, per IBM, CMO priorities are about improving the omni-channel practice, reinventing the customer experience through digital innovation, and championing a customer-centric corporate culture across the enterprise. Deloitte sees marketing evolving from brand storytelling to strategic value creation. For them, key ingredients required are cross-functional alignment, talent, data and intelligence, a holistic view of the customer journey, activation and cultivation of audiences, and real-time views of customers. Accenture sees the role of CMO increasingly focused on leading change, driving world-class experiences based on interactions that are more human, driving technology strategy, fostering customer engagement through the entire customer life cycle, finding new sources of revenue growth, and building a strong ecosystem of the right partners and/or agencies.

Implications for how brand advertisers work with their agencies

These priorities have profound impact on how agencies must support their clients through these turbulent times and how brands can rely on them to accomplish their growth objectives. At the core of how CMOs prepare their organizations for success is the notion that they will secure and organize talent–whether it resides internally or is outsourced to agency partners. Having the right skill sets and organizational structure is essential to their ability to perform. As a result of these new priorities, CMOs will expect the following from their agency ecosystem in the future:

Eight CMO Expectations

1. Tighter collaboration and alignment behind organizational goals.

There is too little time and too much to do for CMOs to handhold agencies and make sure they play nice with each other. CMOs will have little patience for agency partners that do not collaborate effectively with each other or are more focused on territorial issues than driving growth. They will expect all players– internal and external–to work together and be accountable for their individual contributions but also the overall performance of the collective work.

Agency Perspective

”We need to be more client-centric, and more focused on our clients. And more focused on them than on us. When I talk to clients, they want to have simpler access to all of WPP.”

Mark Read, Global CEO, Wunderman, now CEO of WPP

2. Active support of clients’ efforts to produce content cost-effectively.

As CMOs look for ways to increase their output, they are likely to strengthen existing in-house agency activities or pilot the creation of internal functions like programmatic, social, analytics, etc., that need support from external agencies to work together on assignments, leveraging their respective complementary skill sets. These internal and external teams must work together instead of operating in functional silos. They also want to find ways to increase their content volume without increasing their costs proportionally, and to look for efficiency plays and partnering with specialized content production agencies.

Client Perspective

“The amount of stuff we have to produce is going up exponentially and we have to find a way to economize.”

Eric Reynolds, CMO, Clorox

3. Stronger talent with demonstrated knowledge of data, analytics, and measurement.

The emphasis on data, insight, research, analytics, and ROI measurement will have a cascading effect on advertisers’ internal teams, but also on their agency partnerships. For the latter, they will look to their roster agencies to secure the right technical talent, fostering a culture of data-savviness, curiosity, and constant innovation. Creative not fully informed or supported by data will fail to get internal buy-in.

Client Perspective

“Agencies shouldn’t be enabling companies like ours to [build their own data centres], they should be ahead of us and they should offer us that service themselves.”

Keith Weed, CMO, Unilever

4. More streamlined, agile, and nimble engagements.

Gone are the years with large meetings, long memos, and excruciating slow processes with unclear outcomes. CMOs expect their organization and agency partners to move fast, making rapid decisions involving fewer stakeholders but relying on effective communication lines to keep everyone aligned. Agencies will send fewer people to meetings, become far more responsive, and operate in smaller teams with more flexibility and greater authority. They will expect the same of their clients.

Agency Perspective

“When you ask [big clients] what their biggest issue is, they say lack of speed. Clients say that about agencies as well. They’re too slow. Even the smaller, independent agencies don’t move as quickly as clients want. The premium is on speed.”

Sir Martin Sorrell, Executive Chairman, S4 Capital

5. Strategically grounded advisory, perspective, and insight.

CMOs understand that some of their agency partners are likely to be more strategic, while others might be more tactical and focused on execution. Yet, no matter the discipline, all agencies in their roster must exhibit an ability to understand business imperatives and be able to contribute strategically to the marketing organization, leveraging insight from the work they do or from other clients. CMOs will eventually move the most strategic work internally or rely on generalists with deep business acumen.

Client Perspective

“The gap between the cost of failure and the value of success grows wider. For advertisers, this underscores the importance of a world view and trusted partners who can help their brands perform where the growth can be found.”

Kelly Clark, CEO, GroupM

6. Increasingly output-oriented and bottom-line obsessed.

Marketing leaders will favor compensation models that are output-based (deliverable vs. retainer-based) and focused on driving their organizational KPIs. They will explore better and more effective ways to tie agency compensation to their performance, relying on more timely systems to capture performance data and manage agency expectations.

Agency Perspective

“The agencies of tomorrow will need to adapt to be more than a partner; they must be stakeholders in the success of their clients.”

Scott Martino, Vice President, Digital Investment, Blue 449

7. Quicker to learn and adapt to—or better lead—change.

CMOs are less likely to patiently wait for a new agency to onboard or for an existing one to adapt to their new or changing priorities. The pace is accelerating. Reorgs, restructuring, and new business directions will reset marketing priorities and budgets faster than ever before. Brands will expect their agencies to keep up, or better, be agents of change themselves, propelling their clients forward and allowing them to operate more fluidly.

Agency Perspective

“If you start experimenting and learning now, you will be primed for success… It’s better to lead in the new versus trying to follow in the old.”

Rori Duboff, Managing Director, Accenture Interactive

8. Greater relationship transparency and fiscal accountability to rebuild trust.

CMOs have been caught in the crossfire between CPOs/CFOs pushing agencies for absolute transparency as fraudulent practices made headline news. They understand the need for the agencies to do well financially but cannot allow poor reporting or lack of fiscal accountability to destabilize the relationship or the work product itself. They will look to their agencies to proactively identify and eliminate inefficiencies.

Client Perspective

“We need to know how that money is being spent and where it is going and that we are getting the right value back that we hoped and planned for. There have been significant breakdowns in the value chain.”

Raja Rajamannar, CMO, Mastercard

 

If you are an advertiser, are you ready to articulate your expectations clearly and early enough so your agencies are prepared to rightfully address them in 2020? If you are an agency, are you ready to listen, adapt your offerings and organization accordingly and meet these new challenges, even though those
might differ client to client? Time will tell. What is certain, however, is the incredible velocity of these changes and the fact that some client/agency partners will painfully struggle while others will prevail and thrive. Choose your partners wisely and be ready.


By: Bruno Gralpois, Co-Founder &  Principal, ANA Faculty 

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Published on: February 3, 2019

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