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How Brands and Agencies Must Adapt to Survive

Trends and Insight 494 Add to collection

ADCE president Ami Hasan explains to LBB’s Alex Reeves why he thinks a focus on ‘customer experience’ will make many marketers and agencies extinct

How Brands and Agencies Must Adapt to Survive
Ami Hasan, president of the Art Directors Club of Europe, remembers when marketing used to be easy. For brands, at least. Marketing directors used to get away with laziness, he says. “Marketing used to be a silo and a function of its own with a budget of its own. But digital disruption has already changed a lot of that and will change everything about it,” he proclaims, with a detectable hint of satisfaction. The hasan & partners founder and I are sitting in the sunshine outside a cafe in Cannes, a couple of days after he appeared on CNBC commenting on Sir Martin Sorrell’s recent business movements with a wry smile: “He can do it but if I was 73 I would not bother. Then again, some people have bigger egos than I do.” That quote gives you a good idea of Ami’s disposition as he contextualises his broad theory about the seismic shifts in the marketing landscape. 

“In the old days (and a lot of companies still operate like it was the old days),” he says, “[brands’] value chain was from sourcing towards consumer. Now digital disruption is going to change that. First of all it will put all companies into global competition. And into global competition with companies that operate more efficiently and that are more customer-centric. Their value chain is from consumer to source. 

“The old companies have functions that might cooperate or might be totally siloed: like marketing communications, service, sales, distribution, product. If you turn the value chain around and look at the really modern companies like Airbnb, they don’t have these functions. They have one function which is called customer service or customer experience, which means that the old companies have to merge these functions into one function. It will only have one budget and one calendar and one director, one leader of the function.”

That leader is unlikely to come from the marketing department, suggests Ami. “It’s very seldom the chief marketing officer is the strongest candidate to lead the future customer experience function,” he says, “because they have been too concentrated only on marketing communications. Now they should understand that they have to be interested in service, distribution, product, sales and so on. And they have to be knowledgeable about that all.”

He brings us back to the system as it once was. A CMO’s decisions used to be straightforward, such as how to spread a marketing budget across social channels, TV and outdoor, argues Ami. “For the advertising agencies, that’s been kind of a protected situation,” he says. “Whatever they choose would be created. But the next one in the value chain - the printer, social media company or film production company - for them it has been a question of life and death.

“Once they merge these functions and call it customer experience then this distinction is not going to be made between the media channel; it’s going to be made like: ‘OK, for next May we have this $4 million. Do we invest it in customer service? Do we revamp our ecommerce site?’ So there is no need for a CMO in the future because if they decide it’s going to be on the website instead of in the marketing communication channel, what does the CMO do?”

There is still a need for the advertising agency, reassures Ami, quickly adding, “but of course the advertising agencies need to shape up as well.” Ten years ago a brands marketing budget was divided between four actors: the advertising agency and its suppliers, the media agency and the media channels, the CRM agency and the PR agency. “Now the marketing communication budget is already divided into 20 different functions, so what advertising agencies have to do is add skillsets and offerings to include most of these so they can get as big a piece of the pie as they used to. As the the merger between functions happens, they will have to add understanding of service design, ecommerce and so on.” It’s a shift that’s easy to see taking place as award shows like Cannes Lions introduce new categories along these lines.

Not all advertising agencies will be capable of that, says Ami, but of course many are adapting to make sure they don’t go extinct. “It’s a question of life and death for them,” he believes. “I would say that it’s not going to be more than three years and there’s no room for what we today call an advertising agency, even though it understands all about communication. That’s not enough.”

The answer, according to Ami, is training for agency employees. “They need to invest in acquiring new people. And that can be done by recruiting or buying out other companies. In the end they will probably have to change some people.”

Ami sees the role of the ADCE in this as twofold. First it needs to keep speaking about the value of creativity. “There’s been way too much hype of new technology,” he says. “We’ve all read the articles that start ‘blockchain is going to revolutionise marketing.’ Four-colour printing revolutionised marketing in its time. All of a sudden you could print anything in four colours, even newspapers. Blockchain is going to revolutionise marketing in the same way as four-colour printing did, but it doesn’t mean that people will be thrilled by anything that has blockchain in it.

“So the ADCE’s role is of course to speak about the value of creativity and make the member clubs and individuals understand that that’s the core of our business. You can call it storytelling or story-doing or whatever, but it has to be creative because otherwise it doesn’t touch the feelings of the people. We have to understand that feelings are our toolbox. Our toolbox is not full of blockchains and artificial intelligence and artificial stupidity. It’s full of emotions and we have to decide what emotion we’re going to use and how we use it.”

The ADCE’s second role, as Ami sees it, is to provide education so creative professionals are not left behind by the increasing acceleration of technology. “We have to understand that if we stick to the creativity and don’t learn the new methods and trades and channels (and blockchain), then we have no use for it.

“It’s a cliche but the only thing constant now is change and it’s going to be more rapid than ever.” In a complex landscape, marketing seems harder than ever to keep up with, but if Ami is right, the lazy dinosaurs will die out and the ones that adapt will triumph.
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hasan & partners, Thu, 05 Jul 2018 15:44:55 GMT