In 2020, as the big six advertising companies wrestle with digital transformation, clients will take back control of their marketing.
Clients’ problems started after the financial crisis of 2008, when GDP was slowing and organic growth was harder to come by. Inflation was squeezed out of the economic system, and there was limited pricing power as a result. Cost reduction was the name of the game – with big names like Reckitt Benckiser and Coty leading the way. Chief financial and procurement officers ruled the roost – and marketing resources were gutted in order to be more efficient.
That worked well for a while. A few years later, around 2016, the now dominant digital platforms, Google, Facebook, Amazon, AliBaba and Tencent started to change how they shared data. The walls in the walled gardens were growing taller. Clients found that the web, instead of removing traditional retailers such as Walmart or Tesco, was creating e-tailers. These e-tailers could do exactly the same thing as previous companies, but in a digital environment.
In 2020, without the resources and access to precious, first-party data, clients will decide to wrest back control. In a digital ecosystem, brains are important. Media buying decisions are often made in a nanosecond – and mind triumphs over muscle.
This model is closer to a consulting model than an agency one. If it’s in the client’s interests to have in-house creative content or programming, then we do it – but the client is now at the centre of everything.
In 2020, big corporations will exercise more control over physical distribution, in addition to pushing their online capabilities. In these cases, there is the opportunity to control and mine consumer data and create relationships. Now, the agency model has had to morph into a totally different one – genuine transparency is key.
This new model, the Holy Trinity Model, has first-party data at its core. This is data from the client, supplemented by data from other platforms. Big ideas will no longer solely be delivered by fixed big-ticket campaigns. In 2020, newly garnered data will continuously improve and refine content and media planning. It’s like an electoral campaign, without an election date – the process is executed continuously in real time, 24/7.
Along with a pure focus on digital advertising – which is already almost half of the global $500 billion media market – the Holy Trinity model offers the client agility and efficiency. We’re in the foothills of the development of this model. In 2020, we will enter a new era of advertising.
Martin Sorrell is the executive chairman of S4 Capital PLC
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