THE 21ST CENTURY ADMAN
SURVIVING THE VOLATILE JUNGLE OF ADVERTISING IN THE DIGITAL AGE
OUR PANEL ADAM CHAN
AvenueOne Founder & Managing Director
Publicis Asia Singapore Vice President & Regional Creative Director
Blue Interactive Singapore Managing Director
TBWA PR Singapore Executive Director
XM Asia General Manager
Leo Burnett Singapore Account Director
PUAN CHI HENG
Mediacom Singapore Digital Planner
Blue Interactive Singapore Senior Interactive Designer
TEO YONG ERNN
Rolex Advertising & Communications Executive
Standard Chartered Marketing Communications Executive
IN TR0 DUC TION EDITORAL TEAM Audrey Tsen Elizabeth Lee Hendric Tay Poh Wee Koon Walter Sim
CHIEF EDITOR Walter Sim
CREATIVE DIRECTOR Elizabeth Lee
OUR PANEL OF INTERVIEWEES
P02 CONTENTS PAGE
ADAPT: EXAMINING THE AD INDUSTRY
P04 TALK: WE SPEAK TO
AHEAD: THE FUTURE OF ADVERTISING
CONSOLIDATING THE AD INDUSTRY
ADAPT ADAPT AT THE MERCY OF PARADIGM SHIFTS IN MARKET FORCES AND DEMAND, THE ADVERTISING AGENCY CAN ONLY READJUST. BUT, FOR BETTER OR WORSE?
pecialist skills are highly valued in many industries, and more so than the jack-of-all-trades. This is evident in fields ranging from medicine, law, academia to journalism. And the specialists within don’t bandy about.
“Clients today look for one global campaign executed consistently across the board. They opt for a global agency to not only fit in the insights, but also to service and to deal with the challenges of each individual market. Specialist firms can’t provide that.” Joseph Chua, Account Director, Leo Burnett
Advertising somehow bucks this trend. The biggest names are multitaskers that often steal the limelight. Yet the causeand-effect must be set straight. Capturing audience attention through media clutter is the cause, and the industry‘s growing arms that cut through multiple media channels, the effect. There is thus no room for an explicit dichotomy of specialisation versus multitasking. Rather, they exist on the same plane. The distinct maxims, “specialisation is the key to success” and “multi-task or die” are thus fallacious in advertising for their blind narrow advocacy. This is tantamount, to a stoic defence of an imaginary castle within a tenuous grip on reality, to borrow a line from Mad Men.
more than 1,270 people across eight distinct marketing disciplines, to produce “seamless solutions for clients”. The increasing interconnectability of people through Facebook and Twitter, as well as sunrise technologies like the iPhone, has fueled online advertising. A Frost & Sullivan study reveals that more large-brand advertisers are embracing the medium for its ability to achieve precise targeting and measurable ROI over traditional advertising methods; the local market, worth US$142.1 million in 2007, is forecast to reach US$413.5 million by end-2013 (Mediabuzz, 2009). Yet these figures do not tell the full story. Estimates by PriceWaterhouseCoopers show that 79% of spending will remain in traditional media in 2015 (Sinclair, 2010), despite the increasing digital reliance. “2010 will be a watershed year in terms of pointing to the future of advertising. Social networking elements in advertising campaigns are now the norm, but smart marketers are not throwing the baby out with the bathwater and will retain a mix of new and traditional channels,” said Bob Greenberg, global head of digital agency R/GA. (Sinclair, 2010).
04 INTEGRATION IS KEY
Gary Leih, Chairman of Ogilvy Group UK, once said, “Ever since I joined the industry almost 30 years ago, I’ve been hearing predictions that agencies are going out of business. First it was the dotcom revolution … then it was the rise of the Internet. It wasn’t true then, and it isn’t true now.” (Tylee, 2009). Advertisers have latched onto new media channels amid changing consumer media habits. This, has only strengthened advertising and favoured multidisciplinary corporations that integrate. Leih himself has integrated
There is hence a demand for full-service agencies, one-stop solutions that provide a whole host of inhouse services ranging from above-the-line advertising, branding, digital marketing, customer relationship management, and so forth. Calvin Soh, Vice Chairman and Regional Creative Director of Publicis Asia, agrees. “The recession has borne a huge impact
05 on clients, who increasingly want to cut costs and streamline their advertising. Now clients cherry-pick. They want firms that can offer them everything. With such demand, all of us had to follow suit. Because clients prefer it that way.”
As a direct result of globalization and an interconnected consumer base, branding uniformity has taken on an unprecedented emphasis. Joseph Chua, Account Director of Leo Burnett, says, “Clients today look for one global campaign executed consistently across the board. They opt for a global agency to not only fit in the insights, but also to service and to deal with the challenges of each individual market. Specialist firms can’t provide that.” Clients first approach the multitasking firm with an initial idea of their objectives. These firms typically adopt a horizontal management structure. Leo Burnett, according to Chua, takes an account lead with directors taking charge of individual accounts. After ironing out the specifics of an account with the client, they then work in partnership with the creative and planning teams to brainstorm for ideas, prior to execution. To ensure quality, however, such firms sometimes employ a gatekeeper in the form of a highranking official. TBWA\ Singapore is one such firm, according to Beth Kennedy, Executive Director of the agency’s public relations arm. All creatives pass through the Creative-At-Large of TBWA\ Asia Pacific, John Merrifield, who holds the final say.
AN UNTAPPED OPPORTUNITY Multitasking comes at the cost of certain specialisations being “whittled away” in the multidisciplinary firm, according to Gofton (1995). This results in a heavy reliance on outside agencies. This is good news to the specialist firms that have resisted change, as well as the slew of niche specialist start-ups in recent years. Some of them, like Kinetic and
Kino Studios, have accumulated clout and are endorsed by practitioners of large conglomerates. “Strategic partnerships” have become commonplace between the multitasking firm and specialist agency, as affirmed by Soh, Chua and Kennedy. One-stop agencies do not turn down potentially profitable accounts on the basis of inadequacies in a particular area, as this will not bode well for the agency repute. Rather, they seek to maintain an all-rounder image when pitching for accounts. These multitaskers admit to “outsourcing” specialists tasks they cannot handle internally or hiring freelancers to deal with a specific project, often without the client’s knowledge. Chua says, “This creates a win-win solution for both parties.”
COMING FULL CIRCLE Today, “good” is no longer enough. It is top-notch, or nothing. Thus, the overextension on multitasking agencies is resolved through specialised subsidiaries and acquired firms that run under the parent umbrella. Under JWT Group are XM-Asia (specialists in Internet-related marketing) and Malone Advertising (shopper marketing). Ogilvy and Mather has a whole range of specialist departments including OgilvyOne (digital marketing) and Ogilvy PR (public relations). Both conglomerates, too, in turn belong to advertising holding giant WPP, which itself is a complex internal network that links the expertise of all its subsidiaries together. This macro vantage point of the advertising industry today shows the existence of a highly-networked system, full of intricate links that create a faux-ecosystem. No one firm, whether specialised or multidisciplinary, stands isolated today.
“Strategic partnerships” have become commonplace between the multitasking firm and specialist agency... these multitaskers admit to “outsourcing” specialists tasks they cannot handle internally or hiring freelancers to deal with a specific project.
TALK. TAL SOME OF THE ADVERTISING INDUSTRY’S BEST MINDS OFFER THEIR TAKE ON THE CURRENT STATE OF PLAY.
dvertising has seen a blatant shift from the traditional segregated model to an integrated multidisciplinary one. But this is not sheer happenstance, claim industry experts. We ask some of Singapore’s most prominent ad players— Adam Chan (AC), Founder and Managing Director of AvenueOne; Beth Kennedy (BK), Executive Director of TBWA\PR Singapore; Calvin Soh (CS), Vice President and Regional Creative Director of Publicis Asia; Chester Tan (CT), Managing Director of BLUE Interactive Singapore; and Joseph Chua (JC), Account Director of Leo Burnett Singapore—for their views.
What are some of advertising’s major trends now?
and Facebook for us. They know who’s where, and talking about what. And then we use this intelligence in our marketing.
CS: It’s no longer about telling people what to do. Rather it’s about getting them into conversations, to be part of the process. It’s about involvement.
BK: We offer a 360º range of services, which means we can do all facets of the business within TBWA\ itself.
CT: Plus, digital is the future.
How does your agency differentiate itself from others?
AC: I agree. 15 years ago e-mail started. Five years ago there was no Facebook. And two years ago, no Twitter. But now you already have bloggers making $6,000 a month writing crap.
Specialization is not new to this industry, but whether it is viable is another matter. Clients cannot survive on one option alone. And today you have these digital agencies, a new trend of the 1990s. But its precedents have all folded back into the main advertising body.
JC: More local shops will employ digital means as part of the marketing mix, for the simple reason that the cost, or barrier to entry is very low.
In such a volatile media landscape, how exactly does your agency adapt?
CS: Every company has to adapt to the client. They want something, you supply it. CT: Staying on top of emerging cuttingage trends is important. We also try to involve our client by running numbers through them and educating them about what’s next in digital. AC: We started social engagement teams. People trawl the Internet, forums
BK: TBWA\ created the disruption process. We take apart every aspect of a client’s business. We turn it on its head. And then come up with the creative solution. That’s our position. CT: 10 years in the digital field has honed our expertise, which sets BLUE apart along with new sub-specialised areas of digital marketing. JC: Leo Burnett stands out through our philosophy. We employ whatever medium that works best. We don’t care whether it’s digital or ATL (above-theline), but focus on coming up with pure ideas that cut across all media. CS: You have to admit differentiation is a struggle. All strong brands have varied point of views. Ours focus is on dialogue: “contagious ideas that change the conversation”.
.LK. 07 Do you think there is a saturation of advertising firms here?
AC: The market is getting quite saturated. Not with firms but with freelancers. Those one-man or two-man shops are making it quite hard for bigger agencies. BK: Yes, especially those that work entirely on price. They compromise creativity and quality, which should be the most important aspects in advertising.
JC: Advertising subscribes to Darwin’s “survival of the fittest” model. Specialization is not new to this industry, but whether it is viable is another matter. It has occurred since the days of radio and television. But the television agencies of the early 1970s have collapsed and become multi-function agencies. Why? They realised clients cannot survive on one option alone. And today you have these digital agencies, a new trend of the 1990s. But its precedents have all folded back into the main advertising body.
So are specialised firms today destined to fail? CT: There are some clients who look for specialists when they want a niche focus. There is a market that multitaskers do not occupy. CS: Yes, there will always be a role for specialists today. But whether they can expand into regional, or global, enterprises is another matter. They offer better work because their whole structure is geared towards one thing. But the question is: Can they offer clients the big picture? Multitasking firms,
however, are admittedly lacking in some areas and this is where the specialists come in.
JC: That’s why I think both specialised firms and full-service agencies must exist in harmony, in a partnership.
Any concluding thoughts?
CT: Specialisation is key in a complex world. Digital is always changing, and there has been the advent of mobile, digital outdoor, and signage. I doubt anyone can confidently claim to be able to do everything.
CS: True, but for clients with varied needs it has to be multitasking. Previously firms had everything in-house. But after awhile they decided they can make more money if they split up. So the companies segmented. Yet these days the client demands you to do everything for them. The client wants this, and so everything starts to conglomerate again.
JC: Big clients want a global campaign that is consistently executed across the board. They will prefer a big firm that possesses the global network to fill insights, to service, and to deal with challenges in individual markets. Specialist firms can’t provide that. BK: Firms must multitask but ultimately the individual practitioner must specialise. This is, after all, a talent business. Specialised firms own the best talent, but multitasking companies can draw upon a bigger pool of talents.
dvertising is in a constant state of flux. Shifting social and digital trends aside, the rigor of the industry demands a flow of fresh ideas to stay relevant to clients and their markets. This cuts through the specialist-multitasking divide, creating a pseudo-stable field that allows the coexistence of both specialist and marketing firms. Ultimately clients demand answers to how best they can create touch-points with their publics, through which the je ne sais quoi of respective firms shines through.
Firms must multitask but ultimately the individual practitioner must specialise. This is, after all, a talent business. Specialised firms own the best talent, but multitasking companies can draw upon a bigger pool of talents.
dvertising has undergone tectonic change to grapple with paradigm shifts in the media climate. The current state of four major conglomerates—WPP, Omnicom, IPG, and Publicis—and a multitude of smaller firms is a direct result of massive mergers and acquisitions. The media consumer today has shorter attention spans that are reflected in changing media patterns. The nascent open-source economics has seen an increasing transfer of the power to create and publish into the hands of untrained individuals. Rapid advancements in communications technology have lowered the costs of collaboration. These three core forces have influenced advertising greatly, and will likely continue to determine the future industry outlook.
SHIFTING TIDES An Internet penetration rate of 81% today (Info-Communications Development Authority of Singapore, 2010) reflects the phenomenal rise of digital media. According to Internet World Stats (2010), 50% of Singaporeans own a Facebook account. This represents a future in digital advertising and social networking. At the TEDGlobal Conference 2005, information scholar Yochai Benkler spoke of a fundamental shift in the informational economy. The basic capital means of information, knowledge and culture production have been radically distributed among the unskilled publics in open-sourcing, rather than the institutionalised media creators.
Coupled with the exponential growth of digital media, the public has been quick to embrace its newfound power. The traditional stalwarts of television, radio and print will—doomsayers prophecise— meet their demise with their inability to grapple with an individual’s public sphere on the Internet. Nick Brien (2010, cited in Sacks, 2010), CEO of Interpublic Group’s McCann Worldgroup, said, “Our power has been matched and, in some categories, rivaled by user influence.” What was originally one-way communications has now become a real-time dialogue. Increased interconnectivity has created global advertising networks in a shrinking world amid falling collaborative costs. Multinational collaborations abound today. Fueled by the rise of digital media, an agency can launch a campaign overseas today while entirely coordinating its elements from Singapore. For instance, Publicis Singapore handles regional campaigns for Citibank, Hewlett Packard and BMW.
THE STARK REALITY Advertisers today need “creativity and innovation to be at a premium” (Institute of Practitioners of Advertising, 2010) in an increasingly consumer-led industry. Hence, the pendulum swing towards decentralised structures in media production, distribution and consumption means small specialised firms may better fit the communication needs of clients.
Brad Jakeman (2010, cited in Sacks, 2010), Chief Creative Officer of Activision, said, “The irony is that while there have never been more ways to reach consumers, it’s never been harder to connect with consumers.” Agreed Aaron Reitkopf (2010, cited in Sacks, 2010), North American CEO of digital agency Profero, “There’s never been a better time to be in advertising, and there’s never been a worse time.
Granted, it is early days yet in the digital boom. Despite PriceWaterhouseCoopers figures that even in 2015, 79% of spending will still occur in traditional media (Sinclair, 2010), digital media has since taken over a fair share of the market. The mere release of iPad, iPhone 4, Windows 7, and Rockmelt in recent months may just pave the way for exponential growth unforeseen by existing research. Also bearing testament to the impact of digital media are the wildly successful viral marketing campaigns that were launched recently. Old Spice, in its tie-up with marketing agency Wieden+Kennedy, launched a viral Youtube campaign that garnered 5.9 million views worldwide among its 183 videos in two days (Ehrlich, 2010). TippEx, in an interactive YouTube campaign, allowed viewers to choose their desired ending by changing the video title. It gained more than 4 million worldwide views over a week (Caballero, 2010). Contrast this with the faux bear that roamed Ulu Pandan Road last month in Philips Electronics Singapore’s guerilla campaign that went awry.
AHEAD EAD CHANGE IS THE NEW CONSTANT. ADVERTISING FIRMS HAVE, TILL DATE, BEEN QUICK TO ADAPT. BUT WHAT DOES THE FUTURE HOLD?
According to Gerard Lim of XM-Asia, specialised agencies remain limited by the fact that they do not “have enough broad or holistic knowledge, and no network to draw specific individual market insights”. A lack of global networks makes it implausible to participate in a global campaign. But shrinking collaboration costs might soon remove this barrier of entry. Chester Tan of specialised digital agency BLUE Interactive says “almost 100%” of their clients are multinational.
Further, specialised agencies are said to be able to come up with creative innovations otherwise unavailable in larger companies. Kraft, the largest food marketer in the United States, recently hired a startup agency GeniusRocket to develop the new campaign for the relaunch of its Athenos Hummus (Sacks, 2010). Erstwhile, generalist firms are favoured for their one-stop solutions. Take Rolex, for instance, which works with full-service agency Ogilvy & Mather. Advertising and communications executive Penny Pun says, “it makes work flow a bit easier because of the sheer volume of ads run.” She admits the frustration she faces especially when a job is urgent. “Big agencies do have the resources but unfortunately it works against us because they have so many clients and people that urgent jobs are hard.”
That may be why some opt to buck this one-stop solution trend. Teo Yong Ernn, Marketing Communications Executive of Standard Chartered Singapore says they work with both multitasking and specialist firms for various aspects of their campaign. While company policies prevent explicit reasons to be divulged, we note that they work with TBWA\ for its creatives and exclusively with formul8 for its digital advertising.
The client hence remains in the driver’s seat. New social, economical, cultural and technological trends will arise, but these will only serve as channel effects that complement what the client really needs to achieve in their campaign. The advertising industry can only adapt according to these shifting tides so as to present cutting-edge innovative ideas to their client. To stay afloat and to win pitches, they must remain on top of their game.
SO, WHAT NEXT? And adapt it has. Co in the United States, and Arcade here, represent an untested model. Co comprises of Rosemarie Ryan and Ty Montague, former JWT employees who quit to “build a new kind of marketing business with no old-world waste and inefficiency”. (Sacks, 2010). Arcade is founded by of four seasoned advertising experts, namely Matt Cullen (experience as copywriter), Gary Tranter (experience as art director), Mark Taylor (experience as digital creative) and Nick Marrett (experience as CEO). (Nicholson, 2010).
What these firms do is to pull together the best team for each account through their established networks, then split when the job is completed. And the cycle repeats. Arcade already counts Unilever, General Electric, SingTel and Nintendo amongst its clients despite being around for less than a year. Cullen (2010, as cited in Nicholson, 2010) said, “This approach may not have worked three years ago, but now there are a lot of brilliant people out there we can draw from”.
Such “intellectual property” agencies, in the words of Cullen, may just represent the model of the future, as a direct result of a ‘collapse’ in the complex advertising industry. This is a simplified model that ultimately benefits creativity (Shirky, 2010, cited in Sacks, 2010). Further, esteemed professionals may increasingly follow the footsteps of Gerry Graf from Saatchi or Alex Bogusky from Crispin who defected in the past year, forming “experienced” new startup agencies like Co and Arcade. The large agency model is unlikely to fall, but when the landscape is full of freelance professionals who possess a wealth of experience of their own working under localized startup initiatives, it becomes evident that individual mastery of skills will take precedence in the future.
he timeline below briefly illustrates a point that Joseph Chua, Account Director at Leo Burnett Singapore, made – “specialized firms eventually fold back into the main body of advertising firms”. When new communication technology emerge, specialized firms rise up to fill the demand. As communication outlets mature and become mainstream channels between clients and their markets, these specialized firms eventually consolidate to become part of multidisciplinary agencies, be it through acquisitions or ‘strategic alliances’, to continue to meet their client’s needs.
DEVELOPMENT OF COMMUNICATION TECHNOLOGY 1455 The Gutenberg printing press redefines print and symbolizes the first explosion of publicly accessible information. 1920 Commercial radio stations hit the airwaves. 1970 Television penetration level: 95% of US households. 1980 Microsoft partners with IBM to bundle Microsoft’s operating system with computers that IBM sell. 1983 Cellphone network is launched in USA along with the Motorola DynaTAC, the first commercially produced cellphone. 1984 Macintosh launches the first personal computer that features a mouse and a graphical user interface, redefining the face of communication technology. 1991 Tim Berners-Lee announces the debut of the World Wide Web as a free, publicly available service, marking the beginning of a new era of opportunities. 1999 Google is launched, quickly overtaking earlier search engines such as Yahoo, MSN and the now almost forgotten AltaVista. 2003 Japan starts using QR codes commercially. Their Quick Response orientation allows customers to access real time information immediately. 2004 Facebook takes the world by storm, with 500 million active users to date, taking over other social media sites like Frienster and MySpace.
2005 Youtube is launched, the first simple interface that allows users to upload their videos onto the Internet with ease. 2007 Twitter emerges, rising to become the 3rd highest ranking social network site, increasingly being employed by marketers to create buzz and engage audiences. 2008 Apple releases the iOs software development kit, allowing developers to create applications for the iPhone and iPad, redefining media channels for advertisers once again.
CONSOLIDATION OF THE ADVERTISING INDUSTRY 1843 First advertising agency opens in Philadelphia. 1920s: Radio Advertising Publicis is founded. It signs advertising contracts with radio stations in major cities and soon becomes one of the largest agencies in France. 1950s: Expansion Publicis opens first international office in New York and forms alliances with agencies in other European countries. 1980s: Acquisition Interpublic expands into Asia. BBDO, Doyle Dane Bernbach and Needham Harper merge to establish Omnicom. WPP makes acquisitions including design houses, incentive specialists, sales promotion consultants, and an audio-visual company. The JWT Group and Ogilvy are added to the WPP empire. 1990s: Consolidation McCann-Erickson forms McCann Interactive, other agencies in the network follow. Interpublic buys DraftDirect Worldwide, the largest independent direct marketing firm in the world. Publicis takes over FCB’s share to become Publicis Europe. It acquires agencies in Brazil, Mexico, Singapore and Philippines. WPP expands into digital media advertising. It acquires three high technology marketing consulting concerns along with Asatsu-DK Inc., the thirdlargest agency in Japan. WPP launches MindShare, a company involved in media planning, buying, and research worldwide. Omnicom buys Aegis, TBWA and Chiat/Day. It takes stakes in interactive agencies: Agency.com, Organic Online, Razorfish, Interactive Solutions and takes 20% of I&S, Japan’s eighth-largest ad agency. 2000 onwards: More acquisitions WPP acquires Young & Rubicam Inc and Tempus Group PLC. Omnicom buys The Washington Group, Stromberg Consulting and Corporate Technology Communications. 2010: Recent acquisitions Publicis acquires AG2, one of Brazil’s most prominent digital agencies. WPP forms a strategic partnership with Buddy Media, the Facebook management system of choice for seven of the world’s top 10 advertisers, to help the world’s largest brands scale their marketing efforts on Facebook more effectively.
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Disclaimer: All information is correct at the time of print. Every reasonable care has been taken to ensure the accuracy of information within, hence, neither the publisher, editor or writers may be held liable for errors and/or omission however caused.
Where is advertising going as an industry in the 21st century? Gary Leih, Chairman of Ogilvy Group UK, once said, “Ever since I joined the i...