Any chance we can get back to giving customers what they want, rather than Procurement?
The industry is in a period of strong and continuous growth. UK digital ad spend has grown 13.4% since 2014, with £3.9 billion being spent in the first half of 2015 alone (IAB/PwC figures H1 2015).
Mainstream consumers now possess the kind of devices which make advanced digital engagement fast, responsive and a pleasure. There are more online shoppers than ever before. Christmas this year is likely to be the biggest yet. As William Wordsworth almost said: "Bliss was it in that digital dawn to be alive!"
And that was even before he saw the online retail projections for Black Friday 2015 (currently running at £1 Billion).
What’s been the effect on the digital industry?
With this perfect storm of budget, opportunity and consumer readiness you might expect innovation and creative growth to be top of every brand’s digital advertising agenda this year.
Except the briefs that we see, as agencies, just seem to be focused on prioritising cheaper media – and typically over everything else. We’re seeing customers increasingly viewed as clicks and unit costs; rather than opportunities for growing influence, revenue and profile. At the moment it seems all about reducing the unit cost media and shaving the agency’s fee; a race to the bottom in terms of pricing that is likely to have serious repercussions for brand health.
The drive for cheaper media means the commodification of consumers
Simply from a media point of view, if brands start seeing customers simply as clicks to be harvested, then there’s a knock-on effect on quality. Or ultimately, the concept, the creative, ad copy will simply not be seen to acquire or retain that prized customer.
Simply from a media point of view, if brands start seeing customers simply as clicks to be harvested, then there’s a knock-on effect on quality
From an agency point of view, whilst typically tolerated by the masses to win the business, these procurement-led price squeezes will have an effect, leading to less resource (and certainly senior resource) being available to service accounts. Less resource will mean less opportunity for true quality media activity and less focus on strategic and creative development in the rush for price cuts. Any chance we can get back to giving customers what they want, rather than Procurement?
Tactical in-house recruitment isn’t necessarily the answer either as they need inspiration, leadership and objective accountability with their activity – rather than being placed as cheaper than an agency.
Eventually, and disastrously, customers themselves will begin to notice.
A homogenised world of digital advertising, means lack of differentiation, a lack of the spark that makes brands special and drives revenues long term
So, if you tolerate this…
The point is that commoditisation of marketing leads inexorably to the commoditisation of your customer.
A homogenised world of digital advertising, means lack of differentiation, a lack of the spark that makes brands special and drives revenues long term.
This is a period of unprecedented growth and opportunity in digital. This is a time to invest, not cut back. If you tolerate the downward pressure on pricing, you’ll be selling yourself and your customers short. But, if you recognise, nurture and value real expertise and creative innovation you’ll get amazing campaigns. And you’ll get the results you deserve and your consumers desire.