Diffusing Turmoil within this Ecosystem
Understanding the landscape for brands, agencies and media
A quick scan of branding and marketing headlines in the media these days reveal a state of turmoil. Big multinationals are either outrightly buying or taking stakes in startups or nimbler (and smaller) firms — Mars has bought a stake in KIND, Unilever is buying anything that moves faster then them (Carver Korea, Pukka Herbs, Sundial Brands), P&G has bought deodorant brand Native and Nestle has bought Blue Bottle Coffee.
Amidst all these big brand driven M&A waves, there are other battles raging. This piece from The Atlantic analyses the woes of the media industry — starting from the sale of Time to Buzzfeed and ESPN lay-offs, the turmoil is never ending.
Why So Many Media Companies Are on the Brink of Disaster
Agony is the natural state of the news industry. Newspaper sales per capita peaked before color television was a thing…
If media companies, both traditional, pseudo-modern and modern, are biting dusts, so are the conglomerates that provided them with billions of revenues (and also made billions). Advertising (or shall we say marketing and communication) conglomerates are having their worst year in 2017 in terms of share price performance in decades. The turmoil does not end there by the way.
Accenture Interactive’s win of the Fiat Maserati global experience agency pitch heralds another major development (and we can also call it turmoil) — four consultancies breaking into AdAge’s ranking of the 10 largest agencies in the world, with Accenture Interactive the biggest of these four.
We have a state of turmoil running through the whole marketing and branding ecosystem, which can be represented linearly (yes linearly) as follows:
Brands/Marketers → Ad Agencies/Conglomerates → Media Owners
A very simplistic view yet a very powerful one: The turmoil starts with brand owners searching for elusive growth through any means (buyouts, acquiring stakes, rampant innovation, meaningless brand stretch and unprepared high risk moves), moves on advertising agencies struggling to justify their pre-eminence and right to create advertising (entry of consultancies to offer end-to-end solutions) and going on to media owners (struggling to stay afloat, loss of readership / subscription levels, loss of advertising revenues, unsuccessful transition to digital business models, insane levels of fragmentation).
In short, nothing is the same as it is used to be. But hold on, we are not done here yet. Think of point of sale. Online retail has changed the dynamics of how we buy things, even though physical retail has stood its ground (it is battered and bruised). Amazon stands for whatever has changed in the world of retail. It has inspired (and in most instances forced) physical retailers to embrace the omni-channel, fluid and transitory world that exists in consumer decision journeys these days.
This now completes the definition of nothing is the same as it used to be:
- Brand owners are crafting strategies for brands differently — Organic growth is a dirty office word
- Brand owners are marketing or advertising their brands differently — traditional long-form copy / 30 sec TV spot advertising has given way to experience marketing
- Brand owners are choosing their marketing partners differently — there are either end-to-end solution providers or there are specialist providers (think Accenture Interactive, Laundry Service, Wieden + Kennedy)
- Brand owners are creating communications differently and also how they are buying space to showcase them — TV has its power but there is no more guarantee of its selection, programmatic buying is gradually getting traction, digital marketing is getting serious about measurement and ROI, and experience marketing is creating seamless multi-platform communications
- Brand owners are also selling their brands differently — Brands these days have a strong online and offline presence, packaging has evolved into a behavioural science and decision journeys are being facilitated through a consistent brand experience at each and every consumer touchpoint
This turmoil has two axes — one created by brand owners and one forced on to them. Unfortunately, the way the industry leverages opportunities and turns challenges into windows of growth is quite sporadic. Any kind of innovation that has aimed to calm this turmoil is specifically concentrated at only one stage of this whole journey of creating and selling a brand. Although impossibly complex, there is no solution in the ecosystem that can be applied across the whole journey.
The explosion of digital marketing morphed into digital transformation. The birth of online advertising grew into omni-channel. Brand strategy increasingly got fixated with measurement rather than creation. Brand visions evolved into narratives around purpose and sustainability. Technology-driven marketing processes were mistakenly understood to be brand enablers. Every creation of technology seemingly had a use in the creation and marketing of brands. The periphery became more important than the core. In some instances, the brand was forgotten in favour of platforms, processes, KPIs and currencies.
We probably do need to spare a thought about the consumer but he or she is spoilt for choice, is indecisive, has no loyalty, is too educated, is strongly discerning and has no time. The turmoil has definitely impacted the end buyer, in terms of behaviour, rationale, decision-making and thought process.
Turmoils are good if the outcome leads to some form of progress. The Great Fire of London led to the city to be re-built (much of which has lasted till today). The branding and marketing world turmoil can only lead to a better outcome if the evolving dynamics can be brought together holistically. For this to happen, we need to minimise waste and maximise utilisation of assets. A single unit of a brand is an asset, a single penny that is spent to market it is also, a single exposure or impression of an advertising is one, a sale of one unit is also and so are the resulting revenues and profits.
A sense of calm envelops us when things start making sense. Turmoil is caused when things don’t make sense. In the marketing and branding world, many things don’t make sense currently — how do I grow my brand, how do I advertise / communicate it effectively, how do I use my marketing budget efficiently, how should I sell it and what can I expect in return (revenues, profits).
Human behaviour is complex and irrational. The marketing and branding ecosystem needs to decode it. It doesn’t make logical sense to add complexity to an aspect of life and then try to remove it. By not asking the right questions at the very beginning, brand owners and service providers have got into this state of turmoil.
To stop the turmoil, the right questions need to have answers that make sense.