There won't be a future if agencies can't 1) help clients grow their brands again, by 2) rebuilding agency strategic capabilities and 3) generating growing income in an AI-dominated world.
Great article though I think most agencies and their clients will delude themselves into thinking paid advertising can get back its historical impact with a few tweaks. Advertising used to be a primary source of information for consumers about brands and the available choices. People didn’t always trust the advertising but the lack of other information meant good creative and strategy (executed in a few channels) led to consistent brand growth for average brands—-and most brands are average in terms of their relative utility versus their category. Guaranteed awareness through paid advertising led to guaranteed growth. In this age of better information, average brands (in terms of utility and features) do well just to have flat growth…they’re just not willing to accept that. As an ECD, I’ve found myself in the situation of creating campaigns for average brands that are creatively better (as judged by test scores, online comments, industry awards) than the rest of the category…but the sales results are more modest today because people can’t be fooled like they used to be.
Love it! And it’s a true must be told. How can switch from Jr headcount’s, which mean massive layoffs, and you have bottom line PL pressures with severances cost…it almost increase a revenue TBF 2.5X and clients don’t pay more? Rabbit hole? Any comments?
Great article though I think most agencies and their clients will delude themselves into thinking paid advertising can get back its historical impact with a few tweaks. Advertising used to be a primary source of information for consumers about brands and the available choices. People didn’t always trust the advertising but the lack of other information meant good creative and strategy (executed in a few channels) led to consistent brand growth for average brands—-and most brands are average in terms of their relative utility versus their category. Guaranteed awareness through paid advertising led to guaranteed growth. In this age of better information, average brands (in terms of utility and features) do well just to have flat growth…they’re just not willing to accept that. As an ECD, I’ve found myself in the situation of creating campaigns for average brands that are creatively better (as judged by test scores, online comments, industry awards) than the rest of the category…but the sales results are more modest today because people can’t be fooled like they used to be.
Love it! And it’s a true must be told. How can switch from Jr headcount’s, which mean massive layoffs, and you have bottom line PL pressures with severances cost…it almost increase a revenue TBF 2.5X and clients don’t pay more? Rabbit hole? Any comments?
The much avoided nail has been hit squarely on the head, thanks Michael for yet another enlightening observation👌.