How we can go from frenemies to being friends again.

I was told Frenemies is a great book on the advertising industry as it finds itself now, and I was not disappointed. Ken Auletta has been reporting on this industry as well as media for decades, especially for The New Yorker, and he writes exceedingly well, for starters. Which in itself makes reading him a rewarding experience.

There’s another reason for feeling rewarded. The book came as a reaffirmation of something that I have been thinking and writing on for over a decade. Although it is about our industry facing an existential crisis of sorts, the book offers several insights on how things got so bad, how it’s changed and perhaps hints at a way out of it as well, if we just know where to look.

And so, while I do tell you about the book, Frenemies, I will also be sharing my thoughts on where we might find redemption. That is because I do hold us advertising folks responsible, of course, for the predicament we find ourselves in.

Mad Men to Math Men. Really?

At the heart of the book examining the disruption of the advertising industry, is the what Auletta calls “from Mad Men to Math Men”. While I never thought much of Mad Men – both because I never liked Don Draper as the personification of the “advertising man” and because that world was nothing like the advertising world I knew and experienced for all of my career in it – I have to say that Auletta’s expression doesn’t quite capture several other stages.

For, although he has used that expression as the title of a chapter, Auletta himself tells us how media agencies bulked themselves up on large-scale buying and as the recipients of huge “rebates” - which many consider a euphemism for kickbacks – made the egregious error of not passing the benefit on to clients. And although Auletta doesn’t discuss the split of creative and media agencies at all in the book, media agencies making supernormal profits for their holding companies is where the story really turns.

In fact, the book begins with the rather explosive speech made by Jon Mandel, former Chief Executive of MediaCom at the 2015 ANA Media Leadership Conference, where he blew the whistle on media agencies and holding companies calling them out for kickbacks. A speech that many believe went on to precipitate a crisis and add to the mistrust between agencies and clients.

So, let’s be really honest to ourselves. It actually went from Mad Men to Media Men first before the Math Men arrived on the scene.

Agencies no longer trusted partner? Why?

If the breakdown of trust between agencies and clients has to be further understood, we must examine the rise of another extraordinary kind of creature. The Middle Man. One man, in particular built his entire empire on the crumbling ruins of the advertising and communications industry. Meet Michael Kassan of MediaLink, a man who is everyone’s friend and no one’s enemy. In fact, he builds his business precisely by stepping into the vacuum: he conducts agency reviews for clients, helps tech companies and media companies talk to each other, and generally plays sort of match-maker in the industry. Funny thing is, both clients and agencies need him for he is suddenly the mover and shaker in the industry, around whom everything revolves.

Auletta calls him schmoozer-in-chief, because he is the expert networker, a person with ace PR skills who is always in the thick of things.

Okay, that is not to say that we in the advertising industry didn’t need hand-holding. With the kind of technological and media changes that were sweeping all around us, most agencies were at their wits’ ends, trying to make sense of what was going on. We only woke up when consumers, the next frenemy, started blocking adverts. All this only added to clients’ misgivings, that neither did we understand technology well enough, nor did we know our consumers.

Meanwhile, management consultancies have the ear of those in the C-suites. And they’re advising clients to cut costs, where and how. Remember, most of these disruptions are taking place in the decade of the financial crisis, which somehow almost coincides with the decade since the arrival of the smartphone. The decade when suddenly everything changed. Enter the Chief Procurement Officer who, along with the CFO, starts attending reviews and deciding on agency partner of choice.

Meanwhile, how are we doing on brand-building?

Should it surprise us that nobody is even talking of brands?

Clients want to engage with consumers who are rejecting their adverts. And because of the way digital and social media works, everyone thinks that knowing more about their consumers (read more data analytics) is a substitute somehow for building enduring relationships with consumers. Relationships that are only built over time and with sustained engagement, relationships that we in the industry know to be brands.

It amazes me how quickly even clients have sacrificed brand-building in pursuit of that ever-elusive quarterly profit that they have to announce to keep the financial analysts happy, so their stock value can keep rising. And in the dizzying whirl of programmatic advertising, views, clicks and deals, all communication has been reduced to activation.

In fact, we are now being told that brand loyalty is dead. As pronounced by millennials and Generation Z consumers, no doubt.

We are also being told content is king. In this riveting account of the changes in the advertising industry, Ken Auletta tells us about everybody jumping on to the bandwagon. From media companies and tech companies to management consultancies, PR companies and clients themselves, everybody is now in the business of creating content.

And guess what. Advertising agencies are suddenly the “middle men”.

Let’s get back to doing what we know best

In all this chaos, I think we need to step back from the abyss and ask ourselves a question: where, if anywhere, can we really make a difference to our clients’ businesses?

I believe that we owe it to ourselves and our clients to acknowledge a few things.

One, that even though we are disrupted by technology, it is still only a tool that will help us do business more efficiently and effectively.

Second, we are responsible for results in the short term and the long term. Nothing very different from the way business always has been, except that the tenures of CMOs and CEOs are much shorter nowadays, lasting no more than a three to a five-year term.

Third, we are still in the business of growing our clients’ businesses by finding new consumers for their ever-growing range of products and services. Seen over the long term, that means we are still in the business of building brands. Nothing has changed there, either.

After several years of giving thought to this issue, I have come to the conclusion that brands have to be at the front and centre of our clients’ businesses. In fact, I believe that the marketing function should cease to be seen as peripheral to a company’s main activities, for it performs a very vital function, critical to the fortunes of a corporation.

This has never been truer than in today’s globalized world of business. Manufacturing and supply chains, can all be outsourced and indeed have been. Marketing or the business of building and managing brands, is central and remains at the heart of what a company does and stands for.

I think advertising and brand communications should get back to building brands for clients. In fact, nobody has said it better than David Ogilvy when he crafted his one-line vision for Ogilvy:

To be the agency most valued by clients who most value brands.

That is what we can do to pull ourselves out of this mess we have gotten into, as an industry. And that is how we can go back to being our clients’ partners and friends, regaining their confidence and trust. Building brands is where we need to build our expertise and sharpen our focus, with winning strategies and engaging ideas.

The elephant in the room

Now let’ get back to the existential question we touched upon earlier. If media companies are talking directly to clients and creating content for them, does it mean that they will also be less dependent on advertising for revenue?

Like Ken Auletta, I think we are far away from the day when media will be entirely subscription based. In fact, the new media companies’ business model is dependent on advertising. Yet, they too are our frenemies.

So in preparing for that day, we should double down on our brand-building expertise which is where we will continue to add value to our clients’ businesses. Come to think of it, we have always been in the consulting business. It’s just that we’ve focused too much on creating communications and not been as attentive to other aspects of building brands. Perhaps, we need to move upstream in our thinking and approach to business and sharpen our knowledge and skills in this area.

Nothing like a crisis to help the mind concentrate. Just as we have always done for our clients, we now need to think and innovate for ourselves as well.

Mindful Men, anyone?