If there’s one lesson that January teaches us, it’s that New Year predictions are a distraction that ought to be treated with caution. Once in a blue moon they materialize, but more often than not they become our annual procrastination buffer.
2016 needs to be the year we finally get real about the state of our industry, and what needs to be done to sort it out.
Many of the reasons for a self-inflicted reality check can be found in the year we recently said goodbye to. Certainly, good things happened in the media world: the increased focus on bad client behavior, Jon Mandel’s speech at the ANA Financial Management Conference, and some much needed scrutiny of the ad tech business.
But overall, 2015 was a year of timidity; where people avoided facing up to reality and golden opportunities were lost. Let’s look at just five of them:
1. PepsiCo, so what really happened?
When PepsiCo finally axed its procurement function a few months back, it was what many of us had acknowledged for some time. The marketing procurement had reached the limit of delivering sustainable value and savings by losing touch with the true complexities, dynamics and commercial opportunities of the agency world.
In 2016, marketing procurement need to emerge from behind their workstations and start interacting with their agency’s decision-makers. Failing this, others will surely follow PepsiCo’s example.
With some $25 billion in media budgets up for grabs in 2015, but only a handful actually responding with a fundamental change, it’s clear that the only winners were the status quo. They were dictated by the same old systems, bureaucracy, silos – overseen by exactly the same type of people and remunerated using yesteryear’s mechanics — largely built on opacity, fraud and kick-backs. Key learning.
If we ever want to fix this broken model, we need to start with the pitch.
3. Shit in-Shit out
What’s the use of complaining about client behavior, if you’re only doing so to gain negotiating room? Numerous studies rightly point the finger at the poor briefing agencies receive from clients. Priorities are left open to interpretation, while budgets are frittered away on chasing the latest fad.
Let’s hope 2016 will become inflexion point where agencies stand firm, so they can create superior strategies and clients sharpen up to avoid continued financial penalties.
4. People power strikes back
For years, advertisers have irrationally pumped massive amounts of money into hugely fraudulent programmatic platforms that only delivered endless streams of mediocre, cheap display online ads. Guess what? Consumers didn’t like it – and now that mainstream ad blockers have taken off (wiping an expected $42B off the global ad market in 2016) this is one procrastination that has come home to bite us where it hurts.
So be honest, what is your strategy to ad blocking other than burying your head in the sand?
5. Pandora’s Box
Despite the lack of facts open to the public, the accusations aimed at the U.S. media trading landscape have hurt the industry immensely. The ANA’s resolve to discover the ultimate truth through a lopsided study may be ballsy, but it’s also potentially self-destructive. With many clients already contractually allowing volume rebates, inventory deals and other alternative revenue streams, the most likely outcome is that clients will need to negotiate smarter to avoid double-digit media price hikes — ambitiously driven by a now irate agency community.
Ultimately in 2016, the best performing client-agency relationships will continue to make progress by confronting the real issues, thereby ensuring more clarity and trust. It is this ability to embrace reality, rather than seek comfort in industry crystal balls and the procrastination that goes with them, that will mark out this year’s true winners and trendsetters.