The Year Ahead For ... Adland
By Paul Bainsfair, campaignlive.co.uk, Thursday, 12 January 2012 08:00AM
Paul Bainsfair says there is no reason why UK agencies cannot prosper by forging new partnerships with Silicon Valley and the Far East.
The latest IPA Agency Census numbers have just landed on my desk - a good place to start, as I think about what we might expect in 2012.
The Census tells us that the total number of people employed in IPA member agencies has actually gone up in the past year by around 3 per cent. It also reveals that the number of graduates coming into the industry increased from 723 to 862, a year-on-year increase of 19 per cent.
So, all in all, the big picture is not too depressing. However, here at the IPA, we are in regular contact with the heads of most of the agencies in the UK and, as we look to the year ahead, the overriding mood is one of uncertainty.
A year ago, the industry was very down about the prospects for 2011 - but had hopes for the year we are now entering, with Euro 2012 and the London 2012 Olympics both cited as reasons to be cheerful.
Now, there is a general sense of agreement that 2011 was OK, but most are more nervous about 2012.
This isn't really too surprising when one considers what we have been through in the past 12 months.
We've had the autumn statement from the Chancellor, George Osborne, which told us that Britain is living through the worst period for economic growth since the year dot. We've also seen News of the World shut down in ten days and the disappearance of COI.
We must now expect the unexpected. It has always been true that nothing stays the same. This isn't good or bad, but the current rate of change is a challenge in itself and it makes planning and predictions a precarious business.
The one thing we can be certain of is the onward march of digital. Our industry has undergone a technological revolution. The internet now takes 25 per cent of all advertising expenditure in the UK. We have people in our agencies doing jobs that did not exist two years ago, and we are hiring talent to join the industry to do jobs that haven't yet been imagined. Some of the technicians we will be hiring are in colleges learning stuff that will be outdated by the time they start work.
This was brought home to us when we visited Stanford University and a number of Silicon Valley companies during November. The IPA's trade mission - part of the president Nicola Mendelsohn's Creative Pioneers agenda - enabled UK agency leaders to get up close and personal with the likes of Facebook, Google, Twitter, Yelp, Zynga and LinkedIn, to name a few. We came away inspired and slightly shaken but, most of all, amazed at the rate of change these companies deal with every day.
The common theme was that speed is everything. The time has passed when any innovation can be carefully crafted before being launched on an unsuspecting world.
"Move fast and break things" is a Facebook motto. "Make sure you are building the right 'it' before you build 'it' right," Alberto Savoia, one of Google's leading innovators, said.
All these companies were keen to talk to us. They want us to join with them and work out how our clients' brands can take advantage of their new ways of engaging with consumers. The cynical view is that they mostly see us as a way of helping to monetise their nascent companies. Still, it's good to know that they have stopped thinking that agencies are yesterday's news.
Yes, they "do" advertising and they continue to raid our talent pool for people to work for them, but their business models are about scale. It is not possible for them to provide the intense brand stewardship that we do so well. All advertising is now digital, but it is also invariably integrated. Creative and media agencies remain uniquely well-placed to manage the channel planning that is a prerequisite of the modern marketing plan.
I can also report that these companies simply do not know what we know when it comes to how and why creativity engages consumers and transforms the value of brands. When we spoke to them about how we do what we do, they were clearly impressed. When I left Silicon Valley, I also left behind any remaining fears that they would cause the disintermediation of our business. They are wide open to work with us and want us to give our clients the ideas to take their revenue models upwards. My message is: engage with these frenemies, show them what we can do together and ride their success together.
That said, it is clear that if they can go straight to advertisers without stopping to talk to us, they will. These companies do not play by the established rules. They are in a hurry and are not waiting for stragglers. So, it's a question of us, as an industry, getting on with it and having the confidence to back ourselves to take advantage of - and not be cowed by - their rapid growth.
As technology continues to occupy our thoughts and plans in the coming year, the other big trend that won't be far from our minds is the shift in economic and cultural power from the West to the East. This big, unstoppable geopolitical game-changer has been forecast for years. Now, it has arrived.
As a proportion of GDP, the UK has the largest creative industries sector in the world - twice the size of its nearest competitor in Europe - and the advertising sector leads this sector in terms of GVA and prestige.
I believe that as clients with international brands look East for growth and as Chinese and Indian brands begin to look outside their own markets, we need to ensure that the UK's expertise and creative firepower is recognised as the best place for brand-building and effective advertising.
The IPA has been working hard in this area for more than two years and, through a number of UK Trade & Investment-supported trade missions, we have already built a network of highly influential contacts in China, leading to the development of an International Brand Incubator for national Chinese brands seeking to move West and gain from UK skills.
We are also exporting IPA training courses to help overseas markets understand how advertising works, while using the opportunity that this presents to reinforce the UK's world-class credentials. Keeping the reputation of pre-eminent UK advertising agencies at the front of international marketing clients' minds is going to be a new and important challenge for us all in the future.
We face some big, complex issues as we look forward to the new year and beyond. If the past is a foreign country, then the future is a different world. And if we have the energy and desire to claim our part of it, then there's every reason to believe that UK advertising agencies can look forward to winning an unfair share of this exciting future.
Paul Bainsfair is the director-general of the IPA.
This article was first published on campaignlive.co.uk
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