Lord Smith's six predictions for the ad industry

Advertising is one of the motors of our economy; and I hope everyone in government and elsewhere will realise this.

Illustration by Elly Walton
Illustration by Elly Walton

Stepping down as chairman of the ASA after 10 years at the helm, I have to observe how huge the changes have been over that period. When I started, the ASA had only recently taken over responsibility for TV and radio advertising regulation. Digital marketing was only just beginning to take off, and the ASA’s remit didn’t cover most of it. Online behavioural targeting was a thing of the future. The economy was in a parlous state following the global crash, and advertising budgets were feeling the strain more than most. And Mad Men was the must-see show on TV.

You don’t have to be Don Draper to chart what has happened since: at least half of advertising taking place online (and the ASA’s caseload reflecting precisely that); customer information becoming a seriously deployed marketing tool; blogging, vlogging and social media taking off, and becoming trusted more than many other sources of information. But at the same time there has been a realisation that traditional, old-style TV advertising is the very best way to reach a mass audience. TV resilience is one of the major stories of the current marketing landscape.

But what’s going to happen over the next few years? The reality is, of course, that none of us knows. But we can make a few guesses; and here, for what they are worth, are mine.

First up: Brexit – and the economic uncertainty it will bring won’t be good for overall investment in advertising. Marketing budgets are always the first to be cut back when times are hard (and especially when they are uncertain). I suspect we’ll be seeing quite a bit of this cutting-back over the next few years. It’s frequently a false economy, but nonetheless it’s what many companies tend to do.

Second, there will, I suspect, be further agglomeration of agencies, even within the overall WPP umbrella. The search for cost-cutting will be forever with us. But we may gradually come to realise that bigger doesn’t always mean better, and that the most creative work will come from small, fleet-of-foot innovative agencies that aren’t dependent on a larger entity. We may even get to a stage where these provocative battlers are increasingly the ones where some of the big corporate money goes. Let’s hope so.

Third, I do hope that we retain and develop the creativity and swagger of advertising content. Ads at their best are fun. They have wit, humour and sometimes a bit of nostalgia. And they make an impact because they bring something a little different to our everyday lives. I’ve seen too many ads over the past 10 years that don’t do any of this. Some are plain boring. Some are so terrible they make you wince. Let’s have more creativity, please.

Fourth, we are beginning to realise that the internet isn’t everything. It will, of course, continue to be a crucially important medium for marketers, especially where you’re seeking to target individual groups of potential customers, and among a younger age range. For many small businesses it will be the only affordable route to reach consumers. But broad-spectrum, mass marketing, whether via TV, billboards or elsewhere, will still be the big-ticket way of bringing a message to millions of people. Its importance will be sustained.

And fifth, it will remain a fundamental truth that advertising, to be effective, depends on trust. People are becoming generally more sceptical – of everything, including advertising claims – and they know that marketers exaggerate, but there is still a broad assumption that there’s a substance to most of the claims made. And I like to think that the ASA and the self-regulatory system that has remained strong for 55 years have played a vital part in ensuring that this assumption remains true. Knowing there’s a body there that checks and restrains ads and champions truth gives consumers a confidence that they wouldn’t otherwise have.

There’s one other fundamental truth that needs to be recognised, and over the coming years we’ll have to work hard to get it generally accepted. Ads are part of the oil that makes the economy work. Without ads, we’d all be infinitely poorer. Literally. Advertising is one of the motors of our economy; and I hope that everyone in government and elsewhere will come to realise this, and give us all the space we need to make it the very best we can.

Lord (Chris) Smith of Finsbury was the chairman of the ASA from 1 July 2007 to 30 September 2017. He was Labour’s secretary of state for culture, media and sport between 1997-2001

Illustration by Elly Walton