By Ashoke Agarrwal
As the Earth completes another orbit around the Sun, it seems appropriate to take stock.
Is the business of advertising changing? Will it be undergone a paradigm shift over the next decade?
In the arena of marketing, brands and advertising, the alchemy of the excellent is unchanging. The magic of synergy creates great brands. Consider Apple and Nike. Such brands were created by the coming together of inspired product ideas, marketing, branding, advertising, PR and ongoing brand management. Advertising and agencies’ role in creating such legendary brands will not change. Branding and advertising, in such cases, will remain a creative, curator-level art of its kind.
Instead, we need to ponder the future of 99% of the advertising business, a commercial activity supporting millions of “brands” that are essentially labels of products and services.
As the advertising business matured for the first five or six decades, many in the marketing and advertising industries pretended that advertising was an art form that created that magical entity – a “brand.”
Over the past decade or so, these pretensions have fallen away. Most brand managers now treat their agencies as vendors of business services. Likewise, most advertising agencies have given up pretensions of being brand-builders and instead become purveyors of words, pictures, videos and memes at the creative end and intermediaries that purchase media and endorsements at the commercial end.
And as generative AI emerges – witness OpenAI’s ChatGPT and Meta’s “Make-a-Video” – the automation of generating context and objective-driven words, images and videos – is around-the-corner.
At the operational end, in the high-growth digital advertising business, the likes of Facebook, Google, and Amazon of the world are already the actual operators of the lion’s share of clients’ digital budgets, with media agencies, at best, acting as payment intermediaries. Other automated platforms – the independent ad exchanges that operate programmatic advertising- take whatever’s left of the digital advertising pie. And as generative AI matures, these tech platforms will extend their services from targeting to creating messaging.
Traditional media planning and buying agencies still have a role in buying advertising on mass media – TV, print etc. However, there is a serious effort afoot towards single-source media research and planning platforms that integrate and synergize planning and buying on digital and mass media. And it could be the tech behemoths who will create and own these platforms. If that happens, technology would have, over the next decade, disrupted away the traditional media planning and buying agencies along with the conventional creative agencies.
However, the advertising industry will morph and survive instead of lying down and dying.
At the big business end, the advertising industry will morph into tech players that offer marketers an alternative to dependence on the big tech behemoths. One aspect of this tech-driven future agency will be Data Science driven. It will create first-party data, find innovative ways of harnessing second and third-party data, integrate and warehouse the data, mine strategy operational planning insights and operationalize and track plans. The other aspect of this tech-driven future agency will develop proprietary creative engines atop generative AI engines from the likes of OpenAI. These proprietary creative engines will act on insights mined by the data arms of the agencies.
Even though AI will be at the core of these future agencies, they will still require innovative, creative, and creatively strategic people to run them.
People with the understanding and skills to master and dynamically fine-tune AI engines.
Martin Sorrel left the world of traditional advertising, and his S4Capital is searching for this new world of advertising. The jury is out on whether he will succeed. Also, the big four of the business consulting world have seen the future of advertising and are seriously considering entering it.
The other possible dimension of the future of advertising is likely to house the guerillas.
The tech lash evident among many could result in large communities over the next decade that abjure all platforms led by big tech. These communities will create their own online and media outlets that will define their own rules of engagement, including for brands. Specialist agencies will run commercial messaging in this world. These agencies will evolve data-gathering, targeting and message-creating protocols that will adhere to the rules of the contrarian world. Though contrarian, this world will not be Luddite. The technology that the specialist guerrilla agencies will use is likely to be as advanced as the ones used by the future agencies of the big business world.
The balance between the future worlds of the big advertising agencies and the guerrilla agencies will be dynamic and symbiotic. In the longer term, as the broader world integrates between the establishment and the rebels, so will the agencies.
As unloved 2022 morphs into a hopefully better 2023, we in the marketing and advertising world may look forward to an unknown, risk-filled, adventurous future because we live in exciting times. Happy new year!