Executive Summary – Monthly Recap
What a summer it has been… Facebook was fined $5 billion as part of its privacy settlement approved by the FTC for the mishandling of Facebook user data by Cambridge Analytica, and it seems as if nothing can undermine the social media giant. Top brands started ditching CMO positions, including McDonald’s as the latest brand to not replace its global CMO role as Silvia Lagnado exits. Same as Johnson & Johnson with the departure of its global marketing officer, Alison Lewis. How will those companies fill the void? Who will be accountable for the agency partnerships these brands rely on to drive growth?
Meanwhile, the face of advertising is constantly evolving and in search of more purposeful and effective advertising. Innovative brands like P&G are changing the game by advocating for a new type of advertising, blending the ad world with new creative and content originating from film making, music, comedy, and journalism, which translates into entirely new experiences. Expect more gems like these inside Volume 39 of our industry update.
Newsworthy reports and recent developments:
At AMS, we approach the agency management discipline as four distinct but complementary practice areas, which is how we categorize the following developments:
TALENT: securing the right talent and resources
The topic of talent is top of mind, especially for in-house agencies struggling to keep or retain creative talent and for the many agencies slowly losing their chief creative officers to brand advertisers also eager to build that muscle and direct the narrative of their brand. In the ANA’s recent report, “The Continued Rise of the In-house Agency,” brands acknowledged that talent recruitment and retention is one of the biggest challenges and one of the largest improvement opportunities.
- Publicis Groupe’s chief creative officer Nick Law is going to the client side to become Apple’s vice president of marcom integration, signaling the importance of creative talent focused on design, simplicity, and digital.
- Mediaocean and sell-side software-as-a-service platform Operative came together to automate requests for proposals (RFPs) and processing insertion orders in TV. NBC Universal (NBCU) and several agencies signed on as launch partners.
- Per the Association of National Advertisers (ANA), 78% of its members have an in-house agency now, 90%+ work on digital creative projects. One-third handle media planning and buying.
- Per a 2019 Dentsu Aegis Network CMO Survey, over half of CMOs are planning to take some digital advertising capabilities in-house and 40% will spend more with digital agencies going forward. Only 6% expect to do less. Only 43% agree that agencies do a good job of providing fully integrated solutions. 50% will increase the amount they invest directly with ad-tech partners.
- Marriott set up a hybrid in-house agency called Marriott One Media (M1M) last year as part of Publicis’ “Power of One” model. M1M is centered around Publicis’ agencies SapientRazorfish and Spark Foundry.
- Pernod Ricard took a slower approach than its peers when creating its own in-house team in 2014, gradually moving more of its search, social, and programmatic advertising in-house.
- Per Forbes’s World’s Most Influential CMOs list of 2019, of the top 50, only 22 are new to the list. 31 of the top 50 are women and 17 of the top 50 are with tech companies.
- A French Women’s Rights and nonprofit group, called “Les Lionnes” held a Cannes of their own to rally against industry sexism, rewarding campaigns created by agencies that treat women fairly.
- Facebook became a sponsor of Free the Work, a program to increase the number of women, often underrepresented, creators in film making. The brand’s CMO, Antonio Lucio, was the initial sponsor of Free the Bid, a program advocating for women directors.
- Havas created an offering called Home, helping clients create in-house agencies while becoming their strategic advisors and offering resources.
- MDC Partners reorganized its media operation to create a new network built around data, technology, media, and content by aligning MDC Media Partners’ media shop Assembly with data and CRM agency Gale.
- Havas acquired a majority stake in LA creative gaming and streaming entertainment shop Battery. The agency, whose roster includes clients like Activision Blizzard and Netflix, was repeatedly named to Ad Age’s Small Agency of the Year list. The agency will be folded into Havas’ Annex network.
- Publicis Groupe reorganized Publicis Communications US agencies (namely Saatchi & Saatchi, Leo Burnett, BBH, and Publicis) into three geographic zones (east, west, and center) with a CEO at the top for each. This multiphase reorg is designed to bring data, creativity, and technology together for its clients, and simplify how clients interact with the group.
- Award-winning designer Jessica Walsh started a new agency &Walsh offering brand strategy, design, art direction and production services. Existing clients include Snapchat, Adobe, Apple, Beats by Dre, and The Gap, among others.
- Independent Garrand Moehlenkamp introduced a “Nourishing Approach,” blending rich shopper data and results of a 2018 consumer segmentation study aimed at food & beverage brands.
- Data provider Giant Partners acquired Worxstudio to combine its data business with digital agency capabilities.
- A new service, dubbed Dawn, launched to serve as a portfolio network in which independent agencies receive data science, measurement, and media expertise provided by NY-based independent media shop Crossmedia and its dedicated intelligence group, Redbox.
- Havas Group acquired a majority stake in Los Angeles creative agency Battery, becoming part of agency network Annex and renamed Battery Annex. Battery uses gaming and streaming entertainment storytelling services to create marketing programs and includes clients like Activision Blizzard, 2K Games, Netflix, Warner Bros, CBS, and Disney.
- WPP took a majority stake in Italian technology-driven creative agency AQuest, which offers UX and UI design, production, consumer experience, and activation services. Clients include Gucci, Bulgari, and Mercedes.
- Interpublic Group merged its two Hollywood PR powerhouses Rogers & Cowan and PMKBNC and became part of Octagon Sports & Entertainment Network (part of IPG’s Constituency Management Group).
- Noteworthy quotes:
- “We white-label any external help. So we make the decision more collaborative, but they may not know it’s being sent out externally.” Wayne Barringer, Director of Creative Services, The Boeing Co.
- “There’s no point in bringing in diverse people if then they don’t feel included or they can’t be themselves.” – Diego Scotti, CMO, Verizon
- “Each one of these apps [Facebook, Instagram, WhatsApp, Messenger] is going to have to tell their stories to its user base and that is why we have decided to have a different partner for each one.”—Antonio Lucio, chief marketing officer, Facebook
- “It’s time for media agencies to ‘suit up’ and act more like their creative counterparts.”—Hallie Johnston, chief client officer, US, Initiative
- “Marketers that enjoy some advantages from in-housing may discover that a strategy that omits agency partnerships entirely could expose them to risk in other key areas.”—Marla Kaplowitz, president and CEO, 4A’s
- “It is time for the disruptors, the visionaries, the stubborn, crazy personalities to come back and reshape the industry in their own image.”—Avi Dan, CEO, Avidan Strategies, LLC
- “The struggle for the other holding companies is they’re too big.”—Yannick Bolloré, CEO, Havas
- “All roads lead to L.A. It’s the biggest creative department in the world.”— Paul Marobella, chairman and CEO, Havas Creative North America
- “Suddenly, my new best friend is IT. If you’d have asked me five years ago who I needed at the table for a media and creative pitch, you wouldn’t have said your IT department.”—Margaret Jobling, group chief marketing officer, Centrica
- “We don’t call ourselves one [agency]. It narrows people’s minds where you fit and sit and point you down to the CMOs office.”—Matt Candy, general manager and global leader, IBM iX
- “They [big traditional agencies] can’t shift their model; they can’t get out of their [own] way.”—Martin Sorrell, executive chairman, S4 Capital
- “Brands and agencies draw energy from strong mutual partnerships. And they succeed together.”—Marla Kaplowitz, president and CEO, 4A’s
WORK: producing great work and outcomes
We had the opportunity to witness brilliant work during the Cannes Lions as brands and agencies came to the Riviera to showcase their best campaign work across a wide field of marketing venues. The effective convergence of innovative technology and data, engaging content, and emotionally rich creative has never been timelier as consumers demand more. Advertising is being reinvented as we speak.
- Strong of 1 billion monthly active users, Facebook opened its Instagram Explore section to advertisers for the first time as users spend increasingly more time in that section (half of its daily visitors view the Explore section) than in their own feed. The ads appear only when a viewer clicks deeper into Explore, after choosing a video and then scrolling through the newly generated feed of videos.