Creative vs Media: What I learned at the Advertising Financial conference last week

Creative agencies can learn a lot about the state of the ad industry by heading to the ANA Financial Conference. Every year I have encouraged all the indy creative shops to join & learn first hand what is on the minds of those who pay their bills?—?procurement. Glad to have the creative leaders from Verdes & Unit9 tag along this year. (Warning: 10 minute read ahead. It's worth it)

In general, there is a lot you can learn about the industry at this meet-up.

1. Advertising accounts for $5.8 Trillion in sales?—?That’s 16% of the total sales in the US. Advertising also supports 20 million (14%) of jobs in the US, according to an IHS study.
2. Brand activations now account for 60% of all the marketing spend. That’s $595 billion. Oddly, this includes experiential, sponsorship & …. content?—?which I don’t understand?—?but this is the way the ANA is classifying it.Read here.
3. Agency prices in comparable agency work have declined 62.5% in past 25 years. Declined! ( Hint?—?Media took away the economics from full service agencies)?—?From Michael Farmer
4. Most people forget or don’t know that almost every dollar on advertising can be written off immediately. However, Now Congress is working to pass a Tax Reform for Advertising in 2017.This could mean less advertising work. But definitely a cutback in new commercials and content each year. That’s IMPORTANT.

Filled with all those interesting reporting tidbits, I found there were two themes that emerged most for me & the creative side of the advertising business?—?Creative got lost in the lumascape (a money pit) and the importance of working in new ways.

Theme 1 : Creative got lost in the lumascape & doesn't get along with ad tech

Every advertising conference these days hosts similar conversations around fraud, transparency, ad blocking and the general issues coming with the way we’ve built a business off delivering advertisements to be faster, cheaper & more efficient. There is also always a lumascape. Always. It’s overwhelming… And, the more money we give this machine, the worse it gets.

The lumascape is basically a money pit.

It’s also the antithesis of media advertising technology to creative. Any creative who sees it laughs it off and disregards it. But should they? I think creative agencies MUST get this stuff or at least understand it. The messy divide between where the money is going and the good work we all praise is growing deeper and deeper… Which is a lot to wrap your head around if you aren’t aware of what all this transparency chatter means. When creative agencies learn more about it they stop dead in their tracks with a face pan,“What is happening?”, or “That’s why we hate media, let’s just stop all the banners.” Okay, so maybe that won’t happen, but the sentiment is strongly felt from client & creative agency alike.

So why are we at this juncture today?….

At the conference, a procurement leader I sat next to, told me she was doing an agency search recently and worked on an RFP process for a new media agency with about $200M to spend. For point of reference, this company spends $20M on non-media agency fees?—?i.e. “Creative, PR, Influencer, Activation. For the media RFP, the brand was offered two options via the search consultant on behalf of the media agency for a bulk of their buy which would be programmatic —

1. Know where we spend and where all the money goes = Higher CPM
2. Know nothing and trust our process(ZERO Transparency) = Lower CPM

Great! No, not great. That’s terrible. 

At the conference, I also met with one of the top 3 global media companies to talk about how they were pitching these days. She mentioned they only sell technology tools now. Media accounts have nothing to do with creative effectiveness or ideas we show we can use in media(word for word). Pitches are won purely on trading desk set up, tech platforms and ability to perform at scale. I am sure that is an extreme… however, I highly respect this executive and could tell she was disappointed in the system.

Dave Morgan of Simulmedia backed up these conversations in his talk, saying that “everything happening today is about how do I create more money for me[the ad product or service]. It’s less about what the client or consumer wants. And it’s embarrassing. Creativity got pulled out of the process.”

The industry has become organized to benefit all the processes & systems in place that maintain garbage in & garbage out. We’ve gotten away from the balance of artfulness with our messaging. As a result, consumers are turning things off.

Great creative is what people talk about which has an ROI far beyond anything we can measure right now..

Customers are not commodities. They are reacting to this system. Ad Blocking is amazing. I get that they are extorting publishers?—?but let’s focus on why this exists and how we can solve this creatively vs just going to war with the ad blocking companies.

“87% of marketers believe programmatic ads provide a greater ROI than traditional media.”

How is the above quote possible when there is $7.2 Billion in fraud that is mostly focused on programmatic?

What to do?

Transparency issues?—?Fraud?—?Bots. What to do? Brands have to just say no. No, we will not put up with this way of working. No, we will not spend. And if no one is seeing it really anyways (beside bots), then there is little loss. It’s ok to cut a budget YoY if you are going to be more effective with your spend.

Move the money to things with much deeper brand value.

“The impact of great creative will always out trump media.” 
- Dave Morgan, Simulmedia

Beyond many people saying we must focus on creative work, another “what to do” was to take all the smart new ad tech to find useful insights and data to supply to creative & full service agencies so they can design communications that will engage consumers at the right moment & the right time. Be smart about sequencing messaging and in an approach to blending all this data with deeper understanding of the customer experience.

To do that, it means brands need the support of integrated agency models & thinkers. The old agencies continue to lose their creative talent and have the FPMJ syndrome Michael Farmer pointed out.

The new agencies are jaded by media. They left ad world with a bad taste for modern digital media?—?i.e. “programmatic” or “link bait” as they call content ads. Todd from Zemanta knows what I am taking about :)

Why? For many reasons discussed earlier, but mainly because of education and the separation of media from the creative process. As a result:

1. Creative agencies often have ideas that are not as integrated as a client would like. Single channel is something I hear often.
2. Creative agencies are not as knowledgeable of innovative ad or media technology that could help inform their ideas or act as distribution in meaningful ways.
3. Media deals are still done separate of creative meaning we get a lot of misguided work to the wrong channels or simply digital media is an afterthought getting a media agency doing the creative production treating the work like assets.

It’s frustrating all around for clients, agencies, technology partners and consumers, but we can work to be better. The conference surfaced interesting suggestions around this from the likes of Coca-Cola, Mondelez, NBTY & Bullish.

To get to the best work of today we have to work better together & in new ways. That leads me to the second theme of the conference.

The Coca Cola Approach

Theme 2: Working in New Ways

As per past years, a main theme of working in new ways focused on the relationship of procurement + marketing. Being partners to each other to accomplish similar goals. Making sure that procurement is rewarded not by savings which often cuts out creativity & risk taking for innovation. Both Target & Coca-Cola echoed their approach to building trust, respect and shared passion across the two divisions.

From Target CMO, Jeff Jones

Coca-Cola even rebranded procurement and productivity practices (to stop saying it’s about cost savings) and was able to reinvest $100M back into the business.

The other conversations focused on relationships & ways of working between Client & Agency partners.

The Fearless Model

I have been grateful to share the mentorship (& stage last year at Cannes) of the Fearless crew guided by the ever amazing Mondelez CMO Dana Anderson. They never say it’s easy, but these fearless female leaders are working hard to pave a path for unique ways of getting to better ideas in collaborative models that put relationships and creativity at the heart. All the while at a $33 Billion Global Company.

Deb’s chat was great and had the room snapping photos,sending in questions and talking quite a bit post session.

The takeaway:

Clients are working with multiple partners because one agency cannot meet all communication needs. Project work is increasing as clients engage more specialized partners for shorter periods of time. Deb Giampoli of Mondelez shared in the approach they use in how they have responded to industry shifts, learning along the way and why it is so important that “Clients need be the change.”

The fearless model is one that I employ at Sunday Dinner and really the basis for my company (thank you for the shout out on stage from Deb!).

We work in this way for multiple brands to solve unique marketing & product challenges. It’s all about experimentation and constantly agitating the process. A think tank that actually gets things in market. Getting fresh thinkers to the table. Tapping people upfront in so your teams are informed early enough in decision making moments. Failing Fast. Making small bets. And expanding the intelligence of our most prized capital?—?our own employees.

With more focus on the work that means we save money?—?not the rates, we save in the process.

And look at all the questions it sparked!

I often hear a lot of those questions. The Fly Fearless team has dedicated leadership & resources put against it. If you aren’t there yet, consider an orchestrator to start testing this new model. Which is exactly what my team does at Sunday Dinner.

It’s also why we show up to ANA Financial?—?these new models are important, and understanding how to use them and where they fit in the complex landscape is very important. We go to listen to the challenges and concerns on how procurement is taking a lead in trying to find new ways to get to better work?—?particularly on the creative side.

The Bullish Model

Another unique model popped up at the conference sparking chatter in every outlet.

Bullish is a new type of agency led by Michael Duda who comes from agency + venture based experiences. The bullish model is about finding approaches between client/agency/investment to reward the agency only when its business achieves key financial targets. This is not about the bulky performance driven procurement notions where each agency only has visibility or control into one small piece of the business.

How Bullish is designed

The bullish model is most successful when both client and agency understand complete business information and can work in partnership on all aspects of the business well beyond developing campaign or comms deliverables.

And they have been at it with brands like Warby Parker, Casper, GNC, NBTY, Pebble, Aloha & Harry’s. Most people would say these companies are doing work the industry holds in high regard.

With each project, Bullish puts some financial skin in the game. Game changer.

I could definitely see the continuance of online companies using Bullish, but also the more traditional F500 Masterbrands that want to breathe new life into a core brand in their portfolio.

If you got here, thanks for reading.

About Sunday Dinner

Sunday Dinner is designed for brands that are taking more control of their marketing and want a radically different approach to partnering with agencies.This is done through a process of orchestration and active briefing. Engagements often come together in the form of a workshop, consulting retainer or project assignment that brings together a unique think tank approach with today’s leading creative, media & technology partners.

Read more about how brands like Disney, Microsoft, Diageo, and Nickelodeon are using Sunday Dinner to discover new ways to collaborate with today’s modern talent.