As we approach the end of 2019, we asked agency professionals to weigh in on what were the most important stories. Among the issues that were top of mind were one blockbuster acquisition, two agency closings and how data, privacy concerns and platform changes are shaping advertising. Here’s what we heard.
Accenture Interactive’s ‘revolutionary’ acquisition of Droga5
Unsurprisingly, the most-cited agency story of the year was Accenture Interactive acquiring Droga5 in April, which included the marketing arm of global consultancy Accenture buying out a 49% stake in the formerly 51% independent agency.
T3 CCO Jay Suhr called it a “pinnacle event that points to a macro trend,” stressing that “the real story for the agency community goes beyond the financials, to the why behind Accenture’s largest acquisition to date. … This move is about the all-out pursuit of a new agency model—something that consulting firms, agencies, and brands are all undertaking at an accelerated pace.”
The VIA Agency chief strategy officer David Burfeind called the acquisition both the story of the year and “the deal of the decade.”
He pointed to the important demonstration of the commitment of consultancies–and their financial resources–to level the playing field. Burfeind added the move shows the branding while commanding a price premium as well as the power of creativity and importance of independents.
“With all the headlines around data, technology and systems, let’s hope Accenture’s big investment in creativity reminds us all of its vital importance in unleashing marketing’s full potential,” he said. “And the fact that creativity flourishes with independence and freedom.”
There seems to be a consensus that there are many implications from the acquisition of one of the industry’s most celebrated largely independent agencies by a large global consultancy.
Barkley’s svp, director of strategic projects David Gutting described the move as a paradigm shift from the status quo as it “ripped the Band-Aid off the aging holding company model.”
“It’s the recognition—by a premier creative leader—that it’s not all about storytelling,” he said. “David Droga acknowledged that Accenture ‘can build things that we can’t build, they understand things we don’t understand.’ He also said he wanted to build businesses, not just brands. That’s revolutionary.”
The end of Barton F. Graf and TM Advertising
2019 also saw the sad departure of two independent agencies.
In August, Barton F. Graf announced it would close by the end of 2019, concluding its run as advertising’s weirdest agency.
“Barton F. Graf’s demise wasn’t just sad for its founders, employees, and clients. It was sad for everyone who loves the business, creativity, and the work,” Pereira & O’Dell founder and creative chairman P.J. Pereria said, who called for the need to take care of each other and care more about the work.
In October, Dallas agency TM Advertising closed after 85 years in business, less than two years after the agency bought itself back from IPG. Last week, TM Advertising sold its URL tm.com for $1.25 million. For some, the sale displayed another closure made under financial pressure.
“It’s clear that clients continue to cut fees and look for the best bargains making it impossible for some agencies to compete,” North CEO Rebecca Armstrong said. “Further, we know that CEOs are bracing for the long-predicted market correction. Agencies need to brace, too. Only the responsive and flexible will survive. Or maybe those with the foresight to cash in early on their unique and valuable URLs.”
Balancing the relationship between data and creativity
The growing importance of data in advertising was an unavoidable topic in 2019. Publicis Groupe made headlines in April with its $4.4 billion acquisition of Epsilon. Each of the five major holding companies provided differential data offerings. However, that doesn’t mean that the importance of creativity diminished. Forrester debuted a study at Cannes entitled “The Cost of Losing Creativity” that showed how much data can provide a competitive advantage.
Jacki Kelley, recently promoted to CEO of the Americas at Dentsu Aegis Network sees “the rise of identity and the renaissance of creativity” as key, intrinsically-linked stories.
“Success in our business is about creating ideas in a data-rich world,” Kelley said. “So that they can create personalized experiences using those identities, is essential. … It’s about connecting through creativity that is magnetic, engaging and at times, beautiful.”
AMV BBDO CCO Sarah Douglass maintained agencies need to protect creativity in what’s acknowledged as a sometimes aggressively expansive tech revolution.
“There is only one tool sharp enough to cut through the gluttony, apathy and noise and that is creativity. We are entering a new golden age of our inaugural purpose,” she added.
Consumer privacy initiatives
Relatedly, the industry felt the impact of consumer privacy regulations such as the ramifications of GDPR being implemented in Europe in 2018, and the anticipation around the upcoming California Consumer Privacy Act.
“With CCPA looming and the cookie crumbling, it’s an absolutely pivotal moment for agencies to become key partners in terms of helping brands transition from proxy-based marketing to people-based marketing,” Kelley said. “Then, it’s about marrying the math with the magic of brilliant creativity. That is the winning formula for success now and will be throughout the coming year.”
Havas Media evp, digital strategy Sargi Mann explained that the narrative around consumer privacy concerns rippled impact beyond agencies to marketers, publishers, ad tech, marketing tech and other partners across the entire media and marketing ecosystem.
“It’s made the consumer’s data and the handling of consumer information with the highest responsibility a center of attention for everyone,” she explained. “Earning and retaining that trust and ensuring that the value created for consumers as part of that exchange is not trivialized in the industry’s quest to do more personalized, targeted advertising; it’s become a key value proposition for the ad and marketing technology industry.”
Mann predicted a more hands-on approach in the world of marketing under more scrutiny of big tech’s data gathering, process, storing and usage practice a la Facebook and Google.
The continuing shift from broadcast to OTT
While cord-cutting and streaming services were hardly new topics in 2019, developments in OTT remained top of mind for advertisers in 2019.
“The rise in OTT platforms will fundamentally change how viewers consume content – and impact how advertisers have to seek out new ways to capture their attention,” said Spark Foundry global chief content officer Eric Levin.
TikTok demanded advertisers’ attention, as did the continued growth of Amazon Prime, Hulu, Netflix and YouTube. There was the highly anticipated launch of Disney’s streaming service last month, which saw 10 million users sign up for Disney+ by its second day. Apple’s own streaming service, Apple TV+, also launched in November.
“There is officially a swing from TV’s dominance to the rise of digital channels,” explained SocialCode CEO Laura O’Shaughnessy. She cited reports from Edison Research which found that 55.3% of the U.S. population subscribed to over-the-top services this year, with the number of cord-cutters and non-pay TV households expected to reach 44 million in 2020.
“Now more than ever, it’s critical for brands to create a coherent content strategy across platforms that reaches customers where they are spending the bulk of their time, including OTT streaming, social, mobile and digital channels,” O’Shaughnessy said. “These channels can’t be thought of as independent silos, but need to work together as the customer travels across them.”
Advertising’s diversity reckoning
In 2019, the ad industry recognized it still had significant strides to make towards more diverse representation and inclusivity.
An ANA Educational Foundation report released in February called “Charting a More Diverse Pathway to Growth” focusing on the demographics of African-Americans, Hispanics and Asian-Americans showed that hiring practices weren’t enough to advance inclusivity in marketing and advertising. Duncan Channon CEO Andy Berkenfield said the eye-opening report uncovered a tough truth.
“Investments in diversity hiring aren’t leading to inclusivity in advertising,” Duncan Channon CEO Andy Berkenfield said. “In 2019, the data forced us to reckon with the fact that hiring people of diverse backgrounds is simply a start, not the solution.”
Berkenfield said the report challenges and reminds the industry “that agency leadership can’t be afraid to build a nuanced understanding of the challenges their employees face with regard to diversity, and create work environments that are both culturally literate and safe for tough conversations.”
As the ad industry heads into 2020, perhaps the next decade can be the one where ad agencies truly make progress on this issue.