The group of people who came of age during World War I (1914-1918) were sometimes referred to as “The Lost Generation”. The term was popularized by the great author Ernest Hemingway and was front and center in his 1920’s novel, THE SUN ALSO RISES.
Some sociologists characterized this group as being disoriented, wandering and directionless. A bit harsh, I would say. Yet, looking at some recent demographic data, I wonder if a 21st century Lost Generation is emerging 100 years later.
What am I referring to is the millions of young Americans who are hamstrung or perhaps handcuffed by student loans and are struggling to repay them. The average student loan now rests at $34,000 and many young adults with unusually high balances are on 20 year payment plans to retire them. Some unscrupulous lenders came in at almost predatory interest rates and added fuel to the fire although they are not as prominent today. According to recent data and projections provided by the Brookings Institution, many who owe are in default. There is a unique and scary divide on defaults. A stunning 47% of people with loans to fund education at a for-profit institution are in default. Conversely, 13% (still too high) are in default if the loan was for schooling at a non-profit center of higher learning. Also, the Brookings data showed that many people default after many years of dutiful payments. Some people pay for a dozen years and then fall off the ability to pay. Brookings projects that as many as 40% overall could be in default by 2023. How is that possible? Here is my theory: our economy has been in recovery after a terrible downturn in 2008 aka The Great Recession. At some point, a downturn is inevitable. When it hits, a few million young people who have been struggling to make their monthly payments may default as many will be hit with either short term or perhaps long term unemployment.
Just how big is the total of Student Loan debt? The figure bandied about these days is $1.4 trillion. Here are some data compiled by the New York Federal Reserve Bank for January, 2018 which pegs student loans as the 2nd largest category of loans in the U.S. Details are:
Home Mortgages $8.7 Trillion
Student Loans. 1.34 Trillion
Auto Loans. 1.19 Trillion
Credit Card Debt 784 Billion
Home Equity Loan 412 Billion
Some crazy things are going on in an effort to prevent defaults. Some 22 states will pull licenses for nursing, medical technicians, doctors, and even teachers certifications if you have missed a certain number of payments. Three states—Montana, Iowa, and Oklahoma have suspended drivers licenses to those in default. Really? In rural areas, how do you get to work where there is no public transportation? Does a friend give you a ride every day? C’mon. The states are sensitive about the drivers license issue and say that it is rarely enforced. How does a nurse pay back her debt when she can no longer work as a nurse? It is a classic Catch-22. Remember, even if you declare bankruptcy your student loans are not forgiven so people cannot “game the system” that way.
Some people say that student loans are harmful to the economy. On a short term basis, that strikes me as sheer idiocy. The money does not sit there. It goes to schools for tuition, room and board and greedy book publishers pick up some funds. That money goes to pay salaries and maintenance at the institutions. Long term, I do believe the approximately $1.4 trillion and growing will be a drag on the economy. Some four out of 10 recent graduates stay living with their parents for a few years to allow them to buy a vehicle and pay down some of the debt until a raise or two or a better job arrives. Some 78% of millennials with student debt state that they cannot save for a downpayment on a home. A full two thirds say that they do not feel secure. I could not find figures on this but I am curious as to how many with student debt bypass 401k’s at their place of work until the balance is worked down. Your 20’s and early 30’s are key capital formation years and if you miss the first 12-15 years, you will never catch up with your debt free colleagues.
Solutions? Some have suggested that you pay back as a fixed percentage of earnings. So, a young investment banker with six figure debt can pay it back faster by kicking in a fixed percentage of income each year while a lower paid worker can stretch out payments for a longer period . Others suggest retiring a portion of the debt if you work in public service areas such as teaching, government or nursing. My mild suggestion is that people need to know what they are signing. A lot of people who seem to get in to the most trouble are first generation college students. They have been told that a university degree is a ticket to prosperity. I have met a few canny students who have thumbed their noses at loans and take six-seven years to get their undergraduate degrees. They work either full time and take night classes or sometimes skip a semester and work 50 hours a week to pay the next semester or year in full. They do miss out on the “college experience” to a certain degree but they have no financial millstone around their necks. Also, they tend to attend state schools and with in-state tuition are provided with good value.
I feel for these fine young people. They cannot work a nice summer job and even begin to cover or largely cover expenses as they did in my day. Many will (sadly) become angry and bitter if things do not go their way.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Friday, June 1, 2018
Sunday, May 27, 2018
Where Have All The Babies Gone?
In the past 10 days three different reports were released which strike me as having a profound effect on the future of our country and, to a certain degree, marketing and media issues going forward. The first was from mainland China. Years ago, Chinese leader, Mao Zedong, instituted a one child policy. The fear was that the country could not feed itself so the population needed to decline over time. As, in recent years, the country experimented with a unique form of the free market, things improved for hundreds of millions and the leaders realized that, with a rapidly aging population, they needed more young people. So, approximately two years ago, they lifted the ban in many provinces that had only allowed a couple to have a single child. Surprise! Since the ban has been lifted there has been no statistically significant move upward in the Chinese birth rate.
In the U.S. the government released figures that stated that U.S birthrates are at a thirty year low. Let us set the stage for a moment. In order to keep a population level, the average women needs to have 2.1 children. This is known as Zero Population Growth (ZPG). The latest data from the U.S federal government puts the birthrate at 1.7545 which is well below ZPG. For years, we often felt that we could hover above ZPG as immigrants would provide the lift above the threshold as they tended to have more kids than citizens born in the states. For whatever reason, that no longer holds true in the last couple of years. While we are now below ZPG, we are nowhere near the low levels seen in countries such as Spain, Greece, Japan and Italy where the statistic can be as low as 1.1. Many forecasters said that once the Great Recession passed, our birthrates would climb back up. That has clearly not happened as we enter our ninth year of economic recovery.
Why should we care? Well, American is not close to being the provider state that many nations in Western Europe are. There is a somewhat frayed safety net here in the states but it is nothing like the cradle to grave security that many other countries provide which will be unsustainable going forward. Young people would pay into social security and medicare and take care of us baby boomers. If there are fewer young people in the workforce, safety net promises will be harder to keep.
The third shoe dropped on May 20, 2018 in the Sunday New York Times. An excellent opinion piece by professors Christina Gibson-Davis and Christine Percheski covered the issue and was entitled, “The Wealth Gap Hits Families Hardest”.
We have all read countless articles about income inequality and, after a while, we have become numb to them, or given their super left wing slant, find them tiresome. This one hit me hard right in the gut. For the first time, I looked at some data regarding families with children. The academics took a long term look at U.S. Households from 1989-2013 with children under 18 and examined their net worth. Results, to me, were both eye opening and depressing. Here are the highlights:
Median Net Worth
Top 1% $5.2 million
Next 9% $584, 850
Next 40% $68, 974
Bottom 50% -$233
These data are totally in line with several reports that some 40+% of Americans cannot afford a minor medical emergency or a big car repair. Also, the authors raise the scary scenario that when some youngsters start college, their parents may still be paying off college loans.
So, what is happening? To me, it is very simple. Sadly, people are not having children or more children as they cannot afford them. It is not due to selfishness on the part of these young adults. Many are literally up against the wall financially.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
In the U.S. the government released figures that stated that U.S birthrates are at a thirty year low. Let us set the stage for a moment. In order to keep a population level, the average women needs to have 2.1 children. This is known as Zero Population Growth (ZPG). The latest data from the U.S federal government puts the birthrate at 1.7545 which is well below ZPG. For years, we often felt that we could hover above ZPG as immigrants would provide the lift above the threshold as they tended to have more kids than citizens born in the states. For whatever reason, that no longer holds true in the last couple of years. While we are now below ZPG, we are nowhere near the low levels seen in countries such as Spain, Greece, Japan and Italy where the statistic can be as low as 1.1. Many forecasters said that once the Great Recession passed, our birthrates would climb back up. That has clearly not happened as we enter our ninth year of economic recovery.
Why should we care? Well, American is not close to being the provider state that many nations in Western Europe are. There is a somewhat frayed safety net here in the states but it is nothing like the cradle to grave security that many other countries provide which will be unsustainable going forward. Young people would pay into social security and medicare and take care of us baby boomers. If there are fewer young people in the workforce, safety net promises will be harder to keep.
The third shoe dropped on May 20, 2018 in the Sunday New York Times. An excellent opinion piece by professors Christina Gibson-Davis and Christine Percheski covered the issue and was entitled, “The Wealth Gap Hits Families Hardest”.
We have all read countless articles about income inequality and, after a while, we have become numb to them, or given their super left wing slant, find them tiresome. This one hit me hard right in the gut. For the first time, I looked at some data regarding families with children. The academics took a long term look at U.S. Households from 1989-2013 with children under 18 and examined their net worth. Results, to me, were both eye opening and depressing. Here are the highlights:
Median Net Worth
Top 1% $5.2 million
Next 9% $584, 850
Next 40% $68, 974
Bottom 50% -$233
These data are totally in line with several reports that some 40+% of Americans cannot afford a minor medical emergency or a big car repair. Also, the authors raise the scary scenario that when some youngsters start college, their parents may still be paying off college loans.
So, what is happening? To me, it is very simple. Sadly, people are not having children or more children as they cannot afford them. It is not due to selfishness on the part of these young adults. Many are literally up against the wall financially.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Wednesday, May 9, 2018
Advertising Agencies--2028, Conclusions
Here, at long last, are the conclusions to the multi-part series on the future of advertising agencies. The delay in posting was due in part to my being very busy but also the avalanche of mail that I received from readers across the globe.
So, to sum up where my panel members and I have wound up, we find:
1) Virtually everyone whom I spoke or e-mailed with agrees that ad agencies, as we now know them, are not long for the marketing world. The only dissenters were no surprise. They were ad agency functionaries between the ages of 47-57 who were worried about their own hides and claimed that they and their shops were good for another five-ten years. Some will definitely make it. Interestingly, not a single CEO or former agency chief felt that "business as usual" could last much longer.
2) Across the board, a large cross- section of respondents felt that most small to mid-sized agencies will morph into something else. Many used "consultancies" as the likely word although a few cynical types conjured up some exotic names for the new entity. Four were brutally candid and said that on a Friday afternoon an agency will close and then a new smaller LLC will emerge on Monday morning with the same key players but with a new name and same client list.
3) All who mentioned the publicly traded mega-shops hinted or said outright that they would break up over the next several years (Isn't several a great word. It can mean three or 13! A forecaster's dream).
4) Where will the bright young people go? Not to shops, that seems certain. The FAANG's will be where the big ideas are bubbling up in both marketing and media. Facebook, Apple, Amazon, Netflix and Google can buy the best talent and will do so. Graduates of the elite schools will gravitate there.
5) I personally was surprised that only a handful of people mentioned the role of Big Data over the next decade. Those who did said it will cut the need for conventional advertising, agencies, and marketing people at many companies.
6) No one, to my strong surprise, mentioned the impact of The Internet of Things. As things get even more connected, prices will drop and squeeze low margin producers. Again, advertising must suffer in that scenario.
Separately, a small market broadcaster weighed in as did an agency chief also in a sub 180 ranked DMA--"small market TV and radio still work here. The problem is that it delivers the older demographic well. Just as is true of the rest of the country our 15-34 year olds love Netflix, ignore commercials while they use another device and listen to music but not much outside of their cars. So, conventional media will hang on a bit longer in our neck of the woods."
A friend whom I first met some 44 years ago, had some comments for me that I feel it is important to share with you. Were we to field a team of media all-stars for the last 50 years, this fellow’s planning skills would make him center fielder. He was and is that good. Here goes:
“Over the many years I have toiled in the fields of media, I have been shockingly aware of our inability, as a group, to not only forecast important shifts in the marketplace but to react to the changes once they happen.
Back in the 1950s and 60s we were mesmerized by broadcast TV. Sight, sound and motion. Surely nothing could beat this amazing new technology. When cable TV entered the fray we were slow to respond and pretty much ignored the presence of this “narrowcasting” upstart. Do you remember the 7% solution? That was where agencies would assign 7% of the media dollars assigned to TV spending to cable networks because cable networks at that time had garnered 7% of the total TV viewing. Not the most inspired creative thinking. We were slow to respond to the intrusion of VCRs and DVDs and video games – all of which were cutting into SOA viewing TV. We were slow to respond to online advertising opportunities. Surely this was just another flash in the pan media option. More recently we have been slow to respond to the F.A.A.N.G. group that now controls media usage. Think back 10 years. How many of you media people were involved with Facebook or Netflix or Google?
Given that historical trend line I think we in media have no idea what is coming in the next decade. We haven’t a clue what the next Bill Gates or Steve Jobs or Mark Zuckerberg are cooking up in their dorm rooms or garages. And that’s OK. What we in media need to figure out is how we can be more receptive to these new media ideas that are being introduced to us on a weekly basis. We can’t sit on the side lines and tell these new media options, “we’ve got to wait and see how this is received by the public.” Instead, try jumping into the freezing water with them. Don’t always play it safe. It is the brand new ideas that let you reach the trendsetters, the out-of-the-box thinkers, the thought leaders, the people in this world who make waves and make change. Over the next ten years find ways to say “YES!” to new concepts and avoid the “not yet” or “prove it” kind of responses. By always waiting for the safe, tried-and-true idea we will always be following the competition and never being the breakthrough leader in the category.
I do think that over the next 10 years media will be in constant flux. And the area where I think change is going to come is in a reduced dependence on programmatic buying. Certainly that will always be a key part of any media buy. Every major advertiser since the end of WWII has recognized the importance and value of looking hard at the CPM numbers. But looking at “efficiency” and only efficiency is really a short-sighted idea. In a programmatic world we would all drive Kias and shop for furniture at IKEA. There would be no place for a Mercedes Benz car or an Ethan Allen sofa. There would be no value given to quality of the product, a beautiful design or break-through technology. Consumers don’t buy in a programmatic way so why should we as business decision-makers buy in a programmatic way? All websites, all TV programming, all print products are not created equal. Just like in buying a car, people react in different ways to various options. And how we as consumers respond to Medium A versus Medium B is just as important as how we respond to Transportation Option A versus Transportation Option B.
As media consultants we need to become smarter and wiser about how to find those media properties that work hardest for the advertiser. That will require more research, more reading, more observing, more talking to people. That is what our job is going to require moving forward. The media agencies that are able to determine these kinds of information that can augment the lowest cost/cheapest price/most efficient kind of media thinking are the media agencies that will prosper. We have pushed the efficiency needle as far as possible. Now we need to start moving the “impact” needle, the “awareness” needle, the “how does my advertising help my sales” needle in that direction.”
Some people have written to me that this lengthy series was too downbeat. I do not think so. Things are changing and fast. You need to adapt, keep learning or get out of the way. As I first wrote in a memo way back in 1978, “the future has not been cancelled.”
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
So, to sum up where my panel members and I have wound up, we find:
1) Virtually everyone whom I spoke or e-mailed with agrees that ad agencies, as we now know them, are not long for the marketing world. The only dissenters were no surprise. They were ad agency functionaries between the ages of 47-57 who were worried about their own hides and claimed that they and their shops were good for another five-ten years. Some will definitely make it. Interestingly, not a single CEO or former agency chief felt that "business as usual" could last much longer.
2) Across the board, a large cross- section of respondents felt that most small to mid-sized agencies will morph into something else. Many used "consultancies" as the likely word although a few cynical types conjured up some exotic names for the new entity. Four were brutally candid and said that on a Friday afternoon an agency will close and then a new smaller LLC will emerge on Monday morning with the same key players but with a new name and same client list.
3) All who mentioned the publicly traded mega-shops hinted or said outright that they would break up over the next several years (Isn't several a great word. It can mean three or 13! A forecaster's dream).
4) Where will the bright young people go? Not to shops, that seems certain. The FAANG's will be where the big ideas are bubbling up in both marketing and media. Facebook, Apple, Amazon, Netflix and Google can buy the best talent and will do so. Graduates of the elite schools will gravitate there.
5) I personally was surprised that only a handful of people mentioned the role of Big Data over the next decade. Those who did said it will cut the need for conventional advertising, agencies, and marketing people at many companies.
6) No one, to my strong surprise, mentioned the impact of The Internet of Things. As things get even more connected, prices will drop and squeeze low margin producers. Again, advertising must suffer in that scenario.
Separately, a small market broadcaster weighed in as did an agency chief also in a sub 180 ranked DMA--"small market TV and radio still work here. The problem is that it delivers the older demographic well. Just as is true of the rest of the country our 15-34 year olds love Netflix, ignore commercials while they use another device and listen to music but not much outside of their cars. So, conventional media will hang on a bit longer in our neck of the woods."
A friend whom I first met some 44 years ago, had some comments for me that I feel it is important to share with you. Were we to field a team of media all-stars for the last 50 years, this fellow’s planning skills would make him center fielder. He was and is that good. Here goes:
“Over the many years I have toiled in the fields of media, I have been shockingly aware of our inability, as a group, to not only forecast important shifts in the marketplace but to react to the changes once they happen.
Back in the 1950s and 60s we were mesmerized by broadcast TV. Sight, sound and motion. Surely nothing could beat this amazing new technology. When cable TV entered the fray we were slow to respond and pretty much ignored the presence of this “narrowcasting” upstart. Do you remember the 7% solution? That was where agencies would assign 7% of the media dollars assigned to TV spending to cable networks because cable networks at that time had garnered 7% of the total TV viewing. Not the most inspired creative thinking. We were slow to respond to the intrusion of VCRs and DVDs and video games – all of which were cutting into SOA viewing TV. We were slow to respond to online advertising opportunities. Surely this was just another flash in the pan media option. More recently we have been slow to respond to the F.A.A.N.G. group that now controls media usage. Think back 10 years. How many of you media people were involved with Facebook or Netflix or Google?
Given that historical trend line I think we in media have no idea what is coming in the next decade. We haven’t a clue what the next Bill Gates or Steve Jobs or Mark Zuckerberg are cooking up in their dorm rooms or garages. And that’s OK. What we in media need to figure out is how we can be more receptive to these new media ideas that are being introduced to us on a weekly basis. We can’t sit on the side lines and tell these new media options, “we’ve got to wait and see how this is received by the public.” Instead, try jumping into the freezing water with them. Don’t always play it safe. It is the brand new ideas that let you reach the trendsetters, the out-of-the-box thinkers, the thought leaders, the people in this world who make waves and make change. Over the next ten years find ways to say “YES!” to new concepts and avoid the “not yet” or “prove it” kind of responses. By always waiting for the safe, tried-and-true idea we will always be following the competition and never being the breakthrough leader in the category.
I do think that over the next 10 years media will be in constant flux. And the area where I think change is going to come is in a reduced dependence on programmatic buying. Certainly that will always be a key part of any media buy. Every major advertiser since the end of WWII has recognized the importance and value of looking hard at the CPM numbers. But looking at “efficiency” and only efficiency is really a short-sighted idea. In a programmatic world we would all drive Kias and shop for furniture at IKEA. There would be no place for a Mercedes Benz car or an Ethan Allen sofa. There would be no value given to quality of the product, a beautiful design or break-through technology. Consumers don’t buy in a programmatic way so why should we as business decision-makers buy in a programmatic way? All websites, all TV programming, all print products are not created equal. Just like in buying a car, people react in different ways to various options. And how we as consumers respond to Medium A versus Medium B is just as important as how we respond to Transportation Option A versus Transportation Option B.
As media consultants we need to become smarter and wiser about how to find those media properties that work hardest for the advertiser. That will require more research, more reading, more observing, more talking to people. That is what our job is going to require moving forward. The media agencies that are able to determine these kinds of information that can augment the lowest cost/cheapest price/most efficient kind of media thinking are the media agencies that will prosper. We have pushed the efficiency needle as far as possible. Now we need to start moving the “impact” needle, the “awareness” needle, the “how does my advertising help my sales” needle in that direction.”
Some people have written to me that this lengthy series was too downbeat. I do not think so. Things are changing and fast. You need to adapt, keep learning or get out of the way. As I first wrote in a memo way back in 1978, “the future has not been cancelled.”
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, April 7, 2018
Advertising Agencies 2028--Part IV
This is part four of a series on the future of advertising agencies. What follows are some of the best comments that I received from the few dozen whom I interviewed or ask for their opinions via e-mail:
An unusually thoughtful youngish media chief who has a reputation for striving to stay on top of changes:
“I was recently with a couple of smart people in the industry, and we were talking about two of the primary dynamics that exist (knowing there are many more than that). On one hand, you have consultancies who can charge premium fees for services but often in a more limited term role. On the other end of the spectrum, you have agencies which are still in the value pricing mode and seeking longer-term relationships. Our thought was that agencies should evolve to somewhere in the middle. So how do we take the best parts and then how do we weed out the worst? Of course, that is a very simple thing to say. We talk all the time about “solving problems”, but are we set up to solve problems in the best way? Do we talk about it through the eyes of the client?
Lastly, my dad is not in the industry but loves to talk to me about it. He says that even with the rise of automation, there will always be a need for people to think and people to solve problems. So to me, the agencies of the future will need to get back to their roots and focus on what creates the most value for the clients. The roles that are also found at clients need to go away, and we need to focus on how we compliment them instead”.
A young digital account executive whom I have known for several years and find amusing. He is on fire for the business and commented as follows in two areas:
Freelancing
Due to other economic factors, businesses are cutting hours and benefits. As a result, there will likely be fewer traditional, full-time employees. Instead, I believe agencies will lean heavily on freelance specialists as needed based on ever-changing client and project requirements. When the project is over, the freelancer is done. That’s not to say the same freelancers couldn’t be used time and time again and repeat partnerships are formed between agencies and talent, but from a human capital perspective, the workforce won’t be the same as it is today.
Global teams
Again, partially tied to other business factors. Office space is expensive and talent is dispersed globally. I can see agencies leveraging teams of designers, writers, and developers from hotbeds around the globe to attain the best talent and offset costs. Screen share and virtual meetings will become ever more present than they are today. Agencies will become increasingly specialized.
Even more so than today, rather than specializing in a marketing service that we provide to a wide variety of clients, agencies will provide their services to a very specific industry and will become increasingly ingrained in the trends and strategies within that market. Higher Education for example; many agencies will specialize in higher education and improve at prospecting and lead generation specific to that industry’s user’s needs.
A long time media executive with her feet on the ground and a great sense of humor:
To think about how agencies evolve, I’d first imagine how the sales structure evolves (seeing as that’s where it starts for me!)
- We’re still in the game of delivering content, building audiences, utilizing data (perhaps our new currency vs. today’s NSI data) and monetizing advertising platforms.
- Our sales force is different. Fewer sellers, focus is on digital assets (vs. linear cable ad sales). Maybe we are not focused on selling one market but have the ability (and capability) to sell multi-market ad campaigns. There are no geo-fences in the digital world.
- Delivery of commercial content is IP-based, operations at stations (and in cable) consolidated.
- More programmatic opportunities (interactive & linear) also the reason for a reduced sales force.
So the agency:
- Creative boutique shops will exist, maybe more than we see currently, focused on creating multi-faceted interactive campaigns – video still reigns. These are the shops that attract the new talent…grads trained on the new next thing (Internet 2.0)? Bringing ideas on how clients can market their products/services and accurately measure the effectiveness of their ad campaigns.
- Further consolidation of large behemoth groups. Verticals within agencies exist. Interactive (digital) departments lead with traditional media departments a thing of the past. Just as on sales side, fewer planners/buyers. The survivors are those who know what a digital/multi-screen campaign is and how to best put it together for successful execution. Accountability to growing the client’s business is measurable and thus, measured.
- The growth of DSPs or Trading Desks at agencies continues as more campaigns are executed programmatically. (Also a reason for fewer planners/buyers.)
Next, a true gentlemen and sales executive who keeps growing in the business as it keeps shifting says:
“My outlook on the future is that Ad Agencies will likely undergo a cycle of closures, re-organizations and new partnerships. Today’s environment of discounts and pitches focusing on “we can do it cheaper” and “we’ll handle your account for free” and “we’ll return the media commissions to you” is de-valuing their work, their ability to hire and retain talent, and the value of the media with which they must partner.
Agencies are implying that their own output is cheap by those statements and practices that I have mentioned. I believe (like every part of our business) that this is a temporary situation, but please don’t ask me to tell you the duration!
We’ve always had lower-priced agency customers, but also agencies that buy high-profile media to achieve the reach and quality audiences that they need.
Don, the world changed and our agency friends and partners are still behaving as if it is the ‘70’s. Maybe I am giving them too much credit.I work directly with my customers’ CMO’s and marketing teams. Their store operators and franchisees. The only agency interaction I have now is with buyers and their supervisors. Most of that time is spent telling them what their clients wants and needs. They are amazed that I know so much about their business. I then asked one Media Director how often she met with her client’s Media Strategists. Her answer? You guessed it! She had never met them.
Agencies may be blind but the company hiring them has some responsibility to incorporate them into their teams, demand engagement and measure results.I am afraid that the kids behind us can never re-make what we’ve experienced because no one is really trying anymore to create success. They’re all waiting for someone to hand them answers.
Sorry for my rant, you motivated me!”
From a long time media researcher, a different twist:
“If I had to answer in one word: Blockchain.
Any predictive analysis must account for how Blockchain will change the way agencies run.It can potentially even affect how creatives collaborate. I'm not even sure enough is known about it yet. Nor if blockchain is even the revolution that is claimed.
I certainly don't know enough. But I do know the central banks are worried about it”.
You may find the Blockchain comments “out there” but I have known him for over 20 years and find him to be a genuine original thinker. So, I never play him short.
A small market TV general manager asked to weigh in:
“As you know, Nielsen announced days ago that they will not longer measure the Glendive DMA or the Juneau DMA. Big deal, you might say. Well, to us, it means that we will disappear as a DMA within 24-36 months. It does not really matter and the majority of our sales are directs and the local guys do not know how to read a rating book anyway. I do not see us being a programmatic player either. So, what happens? We slowly go out of business. Streaming is catching on big time even out here in the boondocks and our TV station does not work well for clients anymore in many cases. Small agencies and buying services in outlying areas have to die in this environment.”
A senior media research salesperson: “I have had it. When I go in to agencies, the young planners and buyers seem to resent seeing me. I really could help them but there there is little intellectual curiosity about where our data comes from. If I did not have kids in college, I would quit and become a starter on a golf course or something. The agency teams are beyond superficial.”
Conclusions? That will be Part V coming in several days.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
An unusually thoughtful youngish media chief who has a reputation for striving to stay on top of changes:
“I was recently with a couple of smart people in the industry, and we were talking about two of the primary dynamics that exist (knowing there are many more than that). On one hand, you have consultancies who can charge premium fees for services but often in a more limited term role. On the other end of the spectrum, you have agencies which are still in the value pricing mode and seeking longer-term relationships. Our thought was that agencies should evolve to somewhere in the middle. So how do we take the best parts and then how do we weed out the worst? Of course, that is a very simple thing to say. We talk all the time about “solving problems”, but are we set up to solve problems in the best way? Do we talk about it through the eyes of the client?
Lastly, my dad is not in the industry but loves to talk to me about it. He says that even with the rise of automation, there will always be a need for people to think and people to solve problems. So to me, the agencies of the future will need to get back to their roots and focus on what creates the most value for the clients. The roles that are also found at clients need to go away, and we need to focus on how we compliment them instead”.
A young digital account executive whom I have known for several years and find amusing. He is on fire for the business and commented as follows in two areas:
Freelancing
Due to other economic factors, businesses are cutting hours and benefits. As a result, there will likely be fewer traditional, full-time employees. Instead, I believe agencies will lean heavily on freelance specialists as needed based on ever-changing client and project requirements. When the project is over, the freelancer is done. That’s not to say the same freelancers couldn’t be used time and time again and repeat partnerships are formed between agencies and talent, but from a human capital perspective, the workforce won’t be the same as it is today.
Global teams
Again, partially tied to other business factors. Office space is expensive and talent is dispersed globally. I can see agencies leveraging teams of designers, writers, and developers from hotbeds around the globe to attain the best talent and offset costs. Screen share and virtual meetings will become ever more present than they are today. Agencies will become increasingly specialized.
Even more so than today, rather than specializing in a marketing service that we provide to a wide variety of clients, agencies will provide their services to a very specific industry and will become increasingly ingrained in the trends and strategies within that market. Higher Education for example; many agencies will specialize in higher education and improve at prospecting and lead generation specific to that industry’s user’s needs.
A long time media executive with her feet on the ground and a great sense of humor:
To think about how agencies evolve, I’d first imagine how the sales structure evolves (seeing as that’s where it starts for me!)
- We’re still in the game of delivering content, building audiences, utilizing data (perhaps our new currency vs. today’s NSI data) and monetizing advertising platforms.
- Our sales force is different. Fewer sellers, focus is on digital assets (vs. linear cable ad sales). Maybe we are not focused on selling one market but have the ability (and capability) to sell multi-market ad campaigns. There are no geo-fences in the digital world.
- Delivery of commercial content is IP-based, operations at stations (and in cable) consolidated.
- More programmatic opportunities (interactive & linear) also the reason for a reduced sales force.
So the agency:
- Creative boutique shops will exist, maybe more than we see currently, focused on creating multi-faceted interactive campaigns – video still reigns. These are the shops that attract the new talent…grads trained on the new next thing (Internet 2.0)? Bringing ideas on how clients can market their products/services and accurately measure the effectiveness of their ad campaigns.
- Further consolidation of large behemoth groups. Verticals within agencies exist. Interactive (digital) departments lead with traditional media departments a thing of the past. Just as on sales side, fewer planners/buyers. The survivors are those who know what a digital/multi-screen campaign is and how to best put it together for successful execution. Accountability to growing the client’s business is measurable and thus, measured.
- The growth of DSPs or Trading Desks at agencies continues as more campaigns are executed programmatically. (Also a reason for fewer planners/buyers.)
Next, a true gentlemen and sales executive who keeps growing in the business as it keeps shifting says:
“My outlook on the future is that Ad Agencies will likely undergo a cycle of closures, re-organizations and new partnerships. Today’s environment of discounts and pitches focusing on “we can do it cheaper” and “we’ll handle your account for free” and “we’ll return the media commissions to you” is de-valuing their work, their ability to hire and retain talent, and the value of the media with which they must partner.
Agencies are implying that their own output is cheap by those statements and practices that I have mentioned. I believe (like every part of our business) that this is a temporary situation, but please don’t ask me to tell you the duration!
We’ve always had lower-priced agency customers, but also agencies that buy high-profile media to achieve the reach and quality audiences that they need.
Don, the world changed and our agency friends and partners are still behaving as if it is the ‘70’s. Maybe I am giving them too much credit.I work directly with my customers’ CMO’s and marketing teams. Their store operators and franchisees. The only agency interaction I have now is with buyers and their supervisors. Most of that time is spent telling them what their clients wants and needs. They are amazed that I know so much about their business. I then asked one Media Director how often she met with her client’s Media Strategists. Her answer? You guessed it! She had never met them.
Agencies may be blind but the company hiring them has some responsibility to incorporate them into their teams, demand engagement and measure results.I am afraid that the kids behind us can never re-make what we’ve experienced because no one is really trying anymore to create success. They’re all waiting for someone to hand them answers.
Sorry for my rant, you motivated me!”
From a long time media researcher, a different twist:
“If I had to answer in one word: Blockchain.
Any predictive analysis must account for how Blockchain will change the way agencies run.It can potentially even affect how creatives collaborate. I'm not even sure enough is known about it yet. Nor if blockchain is even the revolution that is claimed.
I certainly don't know enough. But I do know the central banks are worried about it”.
You may find the Blockchain comments “out there” but I have known him for over 20 years and find him to be a genuine original thinker. So, I never play him short.
A small market TV general manager asked to weigh in:
“As you know, Nielsen announced days ago that they will not longer measure the Glendive DMA or the Juneau DMA. Big deal, you might say. Well, to us, it means that we will disappear as a DMA within 24-36 months. It does not really matter and the majority of our sales are directs and the local guys do not know how to read a rating book anyway. I do not see us being a programmatic player either. So, what happens? We slowly go out of business. Streaming is catching on big time even out here in the boondocks and our TV station does not work well for clients anymore in many cases. Small agencies and buying services in outlying areas have to die in this environment.”
A senior media research salesperson: “I have had it. When I go in to agencies, the young planners and buyers seem to resent seeing me. I really could help them but there there is little intellectual curiosity about where our data comes from. If I did not have kids in college, I would quit and become a starter on a golf course or something. The agency teams are beyond superficial.”
Conclusions? That will be Part V coming in several days.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Thursday, March 29, 2018
Advertising Agencies 2028--Part III
This post is part Three of our series on the future of advertising agencies.
I spoke to both creatives and media people about the future. The comments will be mixed together a bit on purpose.
Creative Director, Mid-Sized Shop—“Over the last decade, both me and my team had a newfound respect for the media folks at our agency. As digital grew, some of our younger people were bursting with ideas and I keep shutting them down and said you can’t do that. After a while they made a beeline to the media team and would ask if they could execute their idea online or in mobile. Sometimes they could and let me know how out of it I was (am). Other times, the media supervisor would say 'no but you could do this which is close to what you want and may work better.' It took me a while but I got the message. Media was no longer the group that got tickets for clients or the boss. They were pros who were engaged in the industry changes. For a while, we had them in to meetings at the early stage of development that we never did before. It was a nice environment.”
Founder, Mid-Sized Shop—“In recent years, I have been monitoring the growth of Integrated Marketing Communications (IMC). It is not just a new term to toss around. IMC is the blending of Advertising, Direct Marketing, Consumer Promotion, Internet, Public Relations, Publicity and Personal Selling. Don, you have told me directly that a big challenge for marketers will be to determine the proper mix of IMC pillars going forward and each company will be different. I refused to accept your suggestion but now see that you were right. Advertising, due to the advertising avoidance that you discuss a lot, is on a downward spiral. Increasingly, it will take up a smaller portion of the marketing dollar pie. So, the role of creative will be diminished in my view. As Amazon and others grow and hit people directly, their ROI has to be much higher than conventional advertising. My creative director shakes her head in anger when I bring the topic up. It will not happen overnight but it will occur.”
Media Director (with new wave title) at Mid-Sized Shop—“For several years, we pretended we were up to speed on digital. We had some success but eventually our largest client got wise and shifted to programmatic buying with a major player. Their results are light years ahead of ours. We could not compete and conventional media works for us against older demographics but not against the under 40 set. We have had a nice run. I see no way out of it for us.”
Creative Chief, Small Shop—“I am glad that I am getting old. Advertising’s role has to diminish going forward. The Big Data boys at Amazon, Alphabet, Alibaba, Facebook and a few others can reach people with the right message at the right price. It has been great fun but we are in the bottom of the 7th.”
CEO, Small Shop—“Don, I do not dispute what you and others have been saying about the future. The big issue to me is how do we keep the creative and media teams motivated over the next five to seven years. My game plan is to morph in to a consulting firm but the smart ones will have to see what is going on.”
Media Director, Small Shop—“I have a woman on staff who is what you once described as a ‘bust your chops’ negotiator. She is a legend in our small DMA and lives the business. She still gets her pound of flesh (and then some :) ) but her best deals no longer work very well. She is in her late 40’s and refreshingly honest. Last week, she asked me what could she do for the next 20 years? She knows the game is about up. What do I say to her?”
More to come. If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
I spoke to both creatives and media people about the future. The comments will be mixed together a bit on purpose.
Creative Director, Mid-Sized Shop—“Over the last decade, both me and my team had a newfound respect for the media folks at our agency. As digital grew, some of our younger people were bursting with ideas and I keep shutting them down and said you can’t do that. After a while they made a beeline to the media team and would ask if they could execute their idea online or in mobile. Sometimes they could and let me know how out of it I was (am). Other times, the media supervisor would say 'no but you could do this which is close to what you want and may work better.' It took me a while but I got the message. Media was no longer the group that got tickets for clients or the boss. They were pros who were engaged in the industry changes. For a while, we had them in to meetings at the early stage of development that we never did before. It was a nice environment.”
Founder, Mid-Sized Shop—“In recent years, I have been monitoring the growth of Integrated Marketing Communications (IMC). It is not just a new term to toss around. IMC is the blending of Advertising, Direct Marketing, Consumer Promotion, Internet, Public Relations, Publicity and Personal Selling. Don, you have told me directly that a big challenge for marketers will be to determine the proper mix of IMC pillars going forward and each company will be different. I refused to accept your suggestion but now see that you were right. Advertising, due to the advertising avoidance that you discuss a lot, is on a downward spiral. Increasingly, it will take up a smaller portion of the marketing dollar pie. So, the role of creative will be diminished in my view. As Amazon and others grow and hit people directly, their ROI has to be much higher than conventional advertising. My creative director shakes her head in anger when I bring the topic up. It will not happen overnight but it will occur.”
Media Director (with new wave title) at Mid-Sized Shop—“For several years, we pretended we were up to speed on digital. We had some success but eventually our largest client got wise and shifted to programmatic buying with a major player. Their results are light years ahead of ours. We could not compete and conventional media works for us against older demographics but not against the under 40 set. We have had a nice run. I see no way out of it for us.”
Creative Chief, Small Shop—“I am glad that I am getting old. Advertising’s role has to diminish going forward. The Big Data boys at Amazon, Alphabet, Alibaba, Facebook and a few others can reach people with the right message at the right price. It has been great fun but we are in the bottom of the 7th.”
CEO, Small Shop—“Don, I do not dispute what you and others have been saying about the future. The big issue to me is how do we keep the creative and media teams motivated over the next five to seven years. My game plan is to morph in to a consulting firm but the smart ones will have to see what is going on.”
Media Director, Small Shop—“I have a woman on staff who is what you once described as a ‘bust your chops’ negotiator. She is a legend in our small DMA and lives the business. She still gets her pound of flesh (and then some :) ) but her best deals no longer work very well. She is in her late 40’s and refreshingly honest. Last week, she asked me what could she do for the next 20 years? She knows the game is about up. What do I say to her?”
More to come. If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, March 24, 2018
Advertising Agencies 2028--Part II
This post is Part II in the MR series on the future of Advertising Agencies. It covers interviews with marketers of all sizes from Fortune 500 marketing directors, to franchisees of major chains, to small to mid-sized retailers. I hesitate to post this entry as I love ad agencies but none of my sources wanted me to pull THEIR punches.
Here goes:
Fortune 500 Marketing Director—“As you know, I am getting old and have a lot behind me. I remember vividly how, when our agency visited us for a major presentation, it was a big deal. We leaned on them for thinking not just with creative and media execution but also for packaging, new product development and even site location. The agencies that I have dealt with over the last decade have not kept pace with changes. We turned over a lot of our needs directly to Alphabet (Google). Their reps are on top of everything and their analytics are top drawer and keep getting better. The agency that we still have talks of “breakthrough creative ideas” as if it were the 1980’s. We do less and less with them every year. Past agencies did wonderful white papers on the future and had an attack plan for us. These guys are 100% reactive but have zero seminal thinking. It is a shame. In their defense, they can no longer afford the all-stars but they simply do not dig in and learn our business or study the changing environment closely enough. We give them less each year and will likely shift to a boutique or two and perhaps keep the media buying service which they recommended to us.”
Mid-sized company marketing chief (privately held)—“The agency does not take our threats seriously and their younger staffers are rude. Here is a great story: The grandson of our founder, who leaves us alone but still owns 15% of the company heard that we had a new agency and wanted to meet the team. He fashions himself a private investor and dabbles in deals and is a fair sized player in local philanthropy. He is a true gentleman and sometimes we bring him in for special sessions or dinners with new accounts. He showed up for the meeting with the new shop and said he had a brief history of the company to share with us and the new ad guys. It was wonderful and charming. Perhaps 12 power-point slides plus one 30 second commercial. He showed old print ads, the theme line we used for decades and we, at the company, were enthralled. After about 10 minutes a sniveling little pissant from the agency said, “We are pressed for time. Could you just give us the headlines?” I was never so angry. My CEO slammed me back in my chair and told our large shareholder and friend to continue, please. The younger members of the agency team shifted uncomfortably and within two minutes were texting. Something is wrong, really wrong. These kids have no manners and no desire to learn who we are or where we came from. Our largest shareholder was hurt and it was needless. We hung on to the new shop for a few months and then fired them. Now we use free lancers for creative and lean on the big players for digital work.”
Big Franchisee of major player--“We analyze our sales data very carefully. Our agency keeps asking to take over our sales data. We said no. Finally, their young account supervisor (after two double scotches) told us they needed our proprietary data so they could build their own model to use for other clients and new business. We hired a couple of quantitative nerds who are just what we need. I was appalled at what the agency was up to. Our targeted promotions get better and better results and we do not use conventional media much anymore.”
Small Retailer (under 10 stores)—“My son forced me to hire some young men and women to monitor our on line work. What a great investment! We are not slaves to the Pareto principle (80-20 rule) any more. Our whiz kids have found niche markets for us. There are 3% of our clients who are about 12% of our sales. Amazing. We buy specific sites programmatically and our profits keep inching up. Our agency could never do this for us. I mentioned this to the agency CEO and he said I was missing the boat. I smiled. Actually, the train has left the station and this well-intentioned man does not realize that the business has passed him by.”
Mid-Cap Company (Publicly Traded)—“Agencies do not realize that we need them for very little these days. They say that they have a fierce on line team but we go direct now and save big and get better and infinitely faster results.”
Mid Sized Company Marketer—“I am a bit like you, Don. I try to read everything. My account team never reads the articles that I send to them. I found a great article in WIRED and sent it to the team. At the next session, I asked them for their opinion. The room got quiet. The young lady who is the account supervisor said, “ I am verbal person. Could you tell me about it? I said no. I left copies for everyone and came back a half hour later. Okay, I said. Let’s discuss this. Two said they had been on the phone with other clients and one said she was on line reading what the Kardashians were doing. One person had read it and made notes and we went back and forth a while. Two starting texting after a moment or two. When I called their boss he basically said they were the best he could find. Well, I am determined to find better. The lack of manners and lack of professionalism is astounding.”
Fortune 500 COO—“You know that I worked at two agencies for more than a decade. These guys keep telling me their team is the best. The best at what? I see very little that impresses me. To me and my senior team, the communications world is moving toward mobile. How do you communicate in such an environment? How do you bring out a new product? Can an upstart break through with little money? Agencies could provide some answers or at least strong opinions. We are hiring internally and getting real pros”.
40 year marketer, brash, real character—“Don, what cliche do you want me to trot out? Put a fork in agencies, they are done. Watch as they rearrange the deck chairs on the Titanic. Gone! Kaput! Seriously, it is hard to deal with the rapid changes but few have done a good job of it. I love advertising but these guys have dropped the ball in the end-zone (whoops! Another cliche!)”
More to come in a few days.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Here goes:
Fortune 500 Marketing Director—“As you know, I am getting old and have a lot behind me. I remember vividly how, when our agency visited us for a major presentation, it was a big deal. We leaned on them for thinking not just with creative and media execution but also for packaging, new product development and even site location. The agencies that I have dealt with over the last decade have not kept pace with changes. We turned over a lot of our needs directly to Alphabet (Google). Their reps are on top of everything and their analytics are top drawer and keep getting better. The agency that we still have talks of “breakthrough creative ideas” as if it were the 1980’s. We do less and less with them every year. Past agencies did wonderful white papers on the future and had an attack plan for us. These guys are 100% reactive but have zero seminal thinking. It is a shame. In their defense, they can no longer afford the all-stars but they simply do not dig in and learn our business or study the changing environment closely enough. We give them less each year and will likely shift to a boutique or two and perhaps keep the media buying service which they recommended to us.”
Mid-sized company marketing chief (privately held)—“The agency does not take our threats seriously and their younger staffers are rude. Here is a great story: The grandson of our founder, who leaves us alone but still owns 15% of the company heard that we had a new agency and wanted to meet the team. He fashions himself a private investor and dabbles in deals and is a fair sized player in local philanthropy. He is a true gentleman and sometimes we bring him in for special sessions or dinners with new accounts. He showed up for the meeting with the new shop and said he had a brief history of the company to share with us and the new ad guys. It was wonderful and charming. Perhaps 12 power-point slides plus one 30 second commercial. He showed old print ads, the theme line we used for decades and we, at the company, were enthralled. After about 10 minutes a sniveling little pissant from the agency said, “We are pressed for time. Could you just give us the headlines?” I was never so angry. My CEO slammed me back in my chair and told our large shareholder and friend to continue, please. The younger members of the agency team shifted uncomfortably and within two minutes were texting. Something is wrong, really wrong. These kids have no manners and no desire to learn who we are or where we came from. Our largest shareholder was hurt and it was needless. We hung on to the new shop for a few months and then fired them. Now we use free lancers for creative and lean on the big players for digital work.”
Big Franchisee of major player--“We analyze our sales data very carefully. Our agency keeps asking to take over our sales data. We said no. Finally, their young account supervisor (after two double scotches) told us they needed our proprietary data so they could build their own model to use for other clients and new business. We hired a couple of quantitative nerds who are just what we need. I was appalled at what the agency was up to. Our targeted promotions get better and better results and we do not use conventional media much anymore.”
Small Retailer (under 10 stores)—“My son forced me to hire some young men and women to monitor our on line work. What a great investment! We are not slaves to the Pareto principle (80-20 rule) any more. Our whiz kids have found niche markets for us. There are 3% of our clients who are about 12% of our sales. Amazing. We buy specific sites programmatically and our profits keep inching up. Our agency could never do this for us. I mentioned this to the agency CEO and he said I was missing the boat. I smiled. Actually, the train has left the station and this well-intentioned man does not realize that the business has passed him by.”
Mid-Cap Company (Publicly Traded)—“Agencies do not realize that we need them for very little these days. They say that they have a fierce on line team but we go direct now and save big and get better and infinitely faster results.”
Mid Sized Company Marketer—“I am a bit like you, Don. I try to read everything. My account team never reads the articles that I send to them. I found a great article in WIRED and sent it to the team. At the next session, I asked them for their opinion. The room got quiet. The young lady who is the account supervisor said, “ I am verbal person. Could you tell me about it? I said no. I left copies for everyone and came back a half hour later. Okay, I said. Let’s discuss this. Two said they had been on the phone with other clients and one said she was on line reading what the Kardashians were doing. One person had read it and made notes and we went back and forth a while. Two starting texting after a moment or two. When I called their boss he basically said they were the best he could find. Well, I am determined to find better. The lack of manners and lack of professionalism is astounding.”
Fortune 500 COO—“You know that I worked at two agencies for more than a decade. These guys keep telling me their team is the best. The best at what? I see very little that impresses me. To me and my senior team, the communications world is moving toward mobile. How do you communicate in such an environment? How do you bring out a new product? Can an upstart break through with little money? Agencies could provide some answers or at least strong opinions. We are hiring internally and getting real pros”.
40 year marketer, brash, real character—“Don, what cliche do you want me to trot out? Put a fork in agencies, they are done. Watch as they rearrange the deck chairs on the Titanic. Gone! Kaput! Seriously, it is hard to deal with the rapid changes but few have done a good job of it. I love advertising but these guys have dropped the ball in the end-zone (whoops! Another cliche!)”
More to come in a few days.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, March 20, 2018
Advertising Agencies 2028--Part I
A few months ago, I was asked by two people to put up a post on the future of advertising agencies. I sent out feelers to dozens of people ranging from former agency CEO’s, current agency owners, creative talent, media directors (among other titles), Fortune 500 marketers, mid sized retailers, experienced media reps and a few media researchers. The response was rather large and I was contacted by some people whom I did not know but were eager to weigh in on the issue. So, I have sifted through a great deal of material and will time release the responses over the course of a few posts.
It has often been said that perspective requires distance. One does not read a book by rubbing it up against one’s eyes. So, I went to two old pros who have run ad agencies of various sizes outside of New York. Both maintain a lively interest regarding what is going on at agencies and in the media world. Here are their comments on advertising agencies in 2028:
Executive #1—Don by 2028… Advertising agencies will be technology specialists… Media will be mostly programmatic computer buying… Research and marketing will be done by clients in-house exclusively… Clients will handle their own social media… There will still be a need for creative work… But that will be conceptual… Execution will be handled by production companies or in-house. There won’t be near as many big agencies . Smaller agencies might proliferate and serve the needs of those clients who are too small or too young to have their own in-house capabilities. But as soon as a client gets enough scale… Everything possible comes in-house. The agencies that remain will be primarily project based… That that is not too far away from today
Executive #2—What’s next?
The world always wants to know what’s next. People make a lot of money trying to forecast and more often than not get it wrong.
Sometimes the future will be more of the same but with a very slight spin.
2028 marketing will be the same. On two fronts:
• Faster and cheaper
• Artificial Intelligence.
The smart marketers will use the evolving devices that allow them to ‘speak’ to their customers one on one.
A smart marketer knows a product has a better chance when the benefits a customer wants are presented face to face. Me talking to you is the ideal way to make a sale.
Every day new methods evolve.
The advertising future is all the devices we have now will continue to seek the one on one connection.
Every year it gets easier and the current constant is; the techniques used in TV and radio production work. They are simply miniaturized.
Advertisers need to work on smaller, shorter and quicker. It’s not the medium it’s the technique.
The newest entry in tomorrow’s advertising communication is how fast consumers accept the fact that the selling face is not human.
AI .. Artificial intelligence is fast over taking the need for human contact but no one knows – yet – how fast the real humans will accept it.
In the next 10 years the messages will shift from exclusively selling to a balance of selling and proof of good citizenship.
Advertiser will spend large amounts trying to prove they are human and work with humans giving time and money to humans.
The future is better more targeted messaging and faster response. It’s trite but true: instant gratification takes to long.
The behemoth agencies are working to shrink while maintaining the illusion of size. Small agencies need to do the work the big guys can’t.
Quicker, smarter, cheaper.
TV is not dying. Radio is not dying. Magazines and direct mail are not dying. What is happening is they are evolving to even better one on one messengers.
Shifting gears, here are responses from a few current agency chiefs:
Mid-Sized agency owner—"everyone wants to talk about technology changes and they are very real. To a certain degree, we can deal with them or at least for the moment. The larger problem to me is the caliber of people whom we attract. Some 40 years ago when I entered the game, advertising often was a magnet for the best and the brightest. No more. We cannot afford to pay for the best anymore. They are all scooped up by the big companies, especially the FAANGS. If I have someone who is motivated and has a great future, they leave after 18 months or so. I cannot grow our business fast enough to keep them and they are wasted here, to be honest. Also, and this is harsh, the people I do hire often have no class. If they go to dinner with a client without me, they get drunk. One guy was hitting on women who worked client side. He told me that I had no right to interfere with his personal life. I let him know that when he walked in to a client’s office, he represented ME. He quit soon after that —good riddance.”
"Also, there is little interest among many about what is going on in the business outside of our offices. Last year, on the first day, I outlined things for a young trainee. I told him that I would get him a free subscription to ADVERTISING AGE. He laughed and said, “Save your money, boss. I will never read it.” Can you imagine? Obviously, he did not last long but, sadly, he was not the worst of our recent crop of bad hires.”
Small agency principal (15-20 employees)—“Our base for decades has been local retailers, car dealers and banks. Amazon and the general retail apocalypse is killing some Main Street businesses that we have had for two generations. My car dealers tell me that in 10 years they will be largely service operations with people buying direct in many cases. And the banks. Cash cows for agencies for 100 years. Now, they are disappearing as the money center banks or super-regionals gobble them up. I know our days are numbered. Last year, I ramped up my matching contribution to our 401k plan. My CFO said I was crazy but I know we do not have many more years. Some people have been with me for more than 20 years. They have not saved much and they will not have pensions. In two years, I may take some of my personal money and sweeten the 401k even more. These people made me rich and I want to help them as best I can. It has been a fun ride but the game is almost over.”
Agency owner (approximately 30 employees)—“our people do not know how to behave. When the client is talking many are on their devices and chattering among themselves. One of our senior people got defensive when a young intern at a large non-profit asked him an excellent technical question about an online effort we were doing. Our management rep asked her where she went to school. “I go to RISD (Rhode Island School of Design)”, she said. “Never heard of it”, my associate said. I jumped in and said it was probably one of the three best design schools in the U.S. He kept pushing her and she maintained her poise and cool but continued to probe. It turns out that she was the granddaughter of the founder of the non-profit and will be joining the board in a few years and may likely run it someday. We lost the business and deserved to lose it. She can bring in a team that will work cheaper and be far more cutting edge than us regarding new technologies.”
“My team does not read. I sent out articles and ask them to read them a few days before staff meetings. Some never do. They smile and say that they did not have time. Our business is in trouble. If I fire all these lightweights, I am not sure that I can upgrade the team quickly. It is so frustrating.”
Much more to come. Expect Part II in about 72 hours.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
It has often been said that perspective requires distance. One does not read a book by rubbing it up against one’s eyes. So, I went to two old pros who have run ad agencies of various sizes outside of New York. Both maintain a lively interest regarding what is going on at agencies and in the media world. Here are their comments on advertising agencies in 2028:
Executive #1—Don by 2028… Advertising agencies will be technology specialists… Media will be mostly programmatic computer buying… Research and marketing will be done by clients in-house exclusively… Clients will handle their own social media… There will still be a need for creative work… But that will be conceptual… Execution will be handled by production companies or in-house. There won’t be near as many big agencies . Smaller agencies might proliferate and serve the needs of those clients who are too small or too young to have their own in-house capabilities. But as soon as a client gets enough scale… Everything possible comes in-house. The agencies that remain will be primarily project based… That that is not too far away from today
Executive #2—What’s next?
The world always wants to know what’s next. People make a lot of money trying to forecast and more often than not get it wrong.
Sometimes the future will be more of the same but with a very slight spin.
2028 marketing will be the same. On two fronts:
• Faster and cheaper
• Artificial Intelligence.
The smart marketers will use the evolving devices that allow them to ‘speak’ to their customers one on one.
A smart marketer knows a product has a better chance when the benefits a customer wants are presented face to face. Me talking to you is the ideal way to make a sale.
Every day new methods evolve.
The advertising future is all the devices we have now will continue to seek the one on one connection.
Every year it gets easier and the current constant is; the techniques used in TV and radio production work. They are simply miniaturized.
Advertisers need to work on smaller, shorter and quicker. It’s not the medium it’s the technique.
The newest entry in tomorrow’s advertising communication is how fast consumers accept the fact that the selling face is not human.
AI .. Artificial intelligence is fast over taking the need for human contact but no one knows – yet – how fast the real humans will accept it.
In the next 10 years the messages will shift from exclusively selling to a balance of selling and proof of good citizenship.
Advertiser will spend large amounts trying to prove they are human and work with humans giving time and money to humans.
The future is better more targeted messaging and faster response. It’s trite but true: instant gratification takes to long.
The behemoth agencies are working to shrink while maintaining the illusion of size. Small agencies need to do the work the big guys can’t.
Quicker, smarter, cheaper.
TV is not dying. Radio is not dying. Magazines and direct mail are not dying. What is happening is they are evolving to even better one on one messengers.
Shifting gears, here are responses from a few current agency chiefs:
Mid-Sized agency owner—"everyone wants to talk about technology changes and they are very real. To a certain degree, we can deal with them or at least for the moment. The larger problem to me is the caliber of people whom we attract. Some 40 years ago when I entered the game, advertising often was a magnet for the best and the brightest. No more. We cannot afford to pay for the best anymore. They are all scooped up by the big companies, especially the FAANGS. If I have someone who is motivated and has a great future, they leave after 18 months or so. I cannot grow our business fast enough to keep them and they are wasted here, to be honest. Also, and this is harsh, the people I do hire often have no class. If they go to dinner with a client without me, they get drunk. One guy was hitting on women who worked client side. He told me that I had no right to interfere with his personal life. I let him know that when he walked in to a client’s office, he represented ME. He quit soon after that —good riddance.”
"Also, there is little interest among many about what is going on in the business outside of our offices. Last year, on the first day, I outlined things for a young trainee. I told him that I would get him a free subscription to ADVERTISING AGE. He laughed and said, “Save your money, boss. I will never read it.” Can you imagine? Obviously, he did not last long but, sadly, he was not the worst of our recent crop of bad hires.”
Small agency principal (15-20 employees)—“Our base for decades has been local retailers, car dealers and banks. Amazon and the general retail apocalypse is killing some Main Street businesses that we have had for two generations. My car dealers tell me that in 10 years they will be largely service operations with people buying direct in many cases. And the banks. Cash cows for agencies for 100 years. Now, they are disappearing as the money center banks or super-regionals gobble them up. I know our days are numbered. Last year, I ramped up my matching contribution to our 401k plan. My CFO said I was crazy but I know we do not have many more years. Some people have been with me for more than 20 years. They have not saved much and they will not have pensions. In two years, I may take some of my personal money and sweeten the 401k even more. These people made me rich and I want to help them as best I can. It has been a fun ride but the game is almost over.”
Agency owner (approximately 30 employees)—“our people do not know how to behave. When the client is talking many are on their devices and chattering among themselves. One of our senior people got defensive when a young intern at a large non-profit asked him an excellent technical question about an online effort we were doing. Our management rep asked her where she went to school. “I go to RISD (Rhode Island School of Design)”, she said. “Never heard of it”, my associate said. I jumped in and said it was probably one of the three best design schools in the U.S. He kept pushing her and she maintained her poise and cool but continued to probe. It turns out that she was the granddaughter of the founder of the non-profit and will be joining the board in a few years and may likely run it someday. We lost the business and deserved to lose it. She can bring in a team that will work cheaper and be far more cutting edge than us regarding new technologies.”
“My team does not read. I sent out articles and ask them to read them a few days before staff meetings. Some never do. They smile and say that they did not have time. Our business is in trouble. If I fire all these lightweights, I am not sure that I can upgrade the team quickly. It is so frustrating.”
Much more to come. Expect Part II in about 72 hours.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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