9/11 predictions for 2011 Shoaib Qureshy brings out his crystal ball.

Predictions for the Advertising Industry in 2011

Unless you are an Al Qaeda operative in hiding or you are not a regular Aurora reader, and so don’t know what has been happening, it is no secret that the world of the advertising agency has changed dramatically (and not to the agency’s liking) in the last decade. 

This process will further accelerate as we enter a new decade. Although I don’t have a crystal ball, based on hundreds of conversations with entrepreneurs, multinational brands, and fellow agency practitioners, and has critically looked at the tidal waves taking place abroad within the profession, here are nine predictions for 2011 that are more like a 9/11 warning for people in the agency business.

The emergence of the do it yourself the client:

The balance of power will shift in favor of the client; be it to save time or costs. Many companies, big or small, can now handle in-house more and more of the work that they formerly expected their agency to do. Although there will always be a market for clients who need help, the point is that they might not need help from a bloated agency that employs old-school tactics; rather they might prefer to go to smaller agencies and so retain greater control. Clients today are much more educated about advertising, activation, PR, media planning, social media, blogging and creating online content and thus can, and are, calling the shots to have things done faster. 

The emergence of the jack one trade agency: 

The future will be about partnerships between specialized expert agencies rather than the one-big-box model of the full-service agency. The days of Mad Men are gone and big agencies are on the decline. Why? For one thing: massive salaries, overheads, and extravagant lifestyles. The full-service model ends up driving up expenses and instead of a well-oiled machine, creates an environment that often is not cutting edge, but rather too slow-moving for today’s urgency. 

The fall from grace of the big agency:

According to a recent international study, 52% of CMOs believe that traditional, large advertising and media agencies are ill-suited to meet future marketing needs. As a result, brands are relying on small set-ups for big ideas. These set-ups are more creative, less siloed and therefore more nimble when it comes to exploring new media and experimentation. Perhaps the biggest hindrance for the traditional, big advertising and media planning and buying agencies are their senior and mid-level managers who are too pigeon-holed due to the fact that they were born on the wrong side of the new marketing world order. Their media and account management expertise does not necessarily translate well when faced with providing the technology-based marketing solutions demanded by the new consumer.

Two new species of agencies:

As advertising agencies continue to subsist on a diminishing set of resources, what will be left of these organizations will fall into two categories:

1. The idea generators (makers)
2. The idea executors (technicians)
This change will apply to all agencies, be they advertising, activation, media, PR, content, etc.

Advertising practices will change:

Clients will increasingly question the same old marketing and media plans for every new brand challenge. Although ad spending will slow down due to the recession, political instability, and the security situation, activation and digital will gain considerable share at the expense of TV, radio, and print. Mobile phones and retail will become increasingly powerful mediums.

My guess is that spending on creating websites, online communities, digital marketing, and developing HR competence to drive digital and social media is growing, but we don’t know how much as it is not reported.

Brands’ relationships with TV and media agencies will undergo a structural change:

TV will no longer be looked at stereotypically as a medium to merely air commercials. Clients will directly negotiate cross-platform relationships aimed at deeply integrating the brand into the program content (so viewers cannot fast-forward past the message). This will bring the media planning and buying agencies under greater scrutiny, especially from clients who may believe that their media agencies remain old-fashioned in their approach by restricting themselves to asking for more media investment every year, rather than keeping in tune with the demands of changing times.

Clients will call for a structural change in their media agency in the same way they did a decade ago, by dividing the big agency into separate creative and media agencies. I envision the media agency business will require further client surgery as they continue to take the bulk of the client’s money and yet fail to deliver cutting-edge, creative new media thinking to address brand challenges.

A new breed of media agencies will emerge; hot shops maybe – I call them ‘creative media agencies’ – that will create TV ideas, content, and integration, while the traditional media agency will probably continue to buy as per the creative plan; bringing in buying value not planning value for the client, as they have done for a decade.

Brands will need less advertising and more content:

There was a time when brands could hand over their marketing, advertising or PR to their agency and then sit back and approve the so-called magic. The problem is that smarter, faster, cheaper promotion and advertising requires greater participation from the client. Agencies of the future are going to have to hop onto the content train for all kinds of media and solutions.

Agencies will no longer outsource relationships:

Agencies have become too accustomed to being the middleman; outsourcing relationships and taking a commission. But when the going gets tough, the middle man gets kicked out. Building relationships and trust cannot be outsourced. Agencies will have to go back to the basics and immerse themselves in the brands they handle and build in-house capabilities to deliver world-class executions.

The future will also be about evolving from the commission agent role to taking control of the work. The shorter term client–agency relationships become the norm The time of the decade-old client-agency relationship has gone.

Today the relationship lasts on average about three to four years and I see it declining to as low as three to four months and it will be based on a key project or campaign contracts. This will be primarily driven by short-term pressures on the client (i.e. marketing directors and brand managers) who will want to see an even quicker turnaround in the fortunes of their brands and therefore prefer to keep their options open rather than being stuck in a stale long term relationship with their agency.

In their view, this strategy will increase the chances of more creative thinking and therefore a business breakthrough.

Final thought There is no fun in making predictions about the future without a debate (and honestly, this article took quite some time to write). So if you have made it this far, please do feel free to share your opinion and views on the above.

Shoaib Qureshi is Chief Strategy Officer, at Bulls Eye Communications.
First published in the November-December issue of Aurora.