What does the future hold for Amsterdam’s ad industry?

This Memento

The advertising industry has long been recognised as a sector that is going places, but where is that direction of travel leading and how is that journey likely to see the business in Amsterdam evolve in the coming years?

In a country where when you turn on the TV you are bombarded with mundane advertising, there is a city where every agency you speak to seems to have business with the same three clients (albeit the three top sports brands in the world). Despite this, Amsterdam has somehow produced some of the most globally impactful creative campaigns over the course of the last 25 years. And business is booming. But how has this all come about, and what does its future hold?

Commercially-minded, pragmatic, open, resourceful... just some of the adjectives frequently used to describe the people of the city which had the world’s first stock exchange, in a country that’s half dragged up from the sea. If that doesn’t tell you all you need to know about Dutch resourcefulness and entrepreneurship then what else will?

“Amsterdam’s mentality continues to be open and progressive because of its deep-rooted legacy in the forefront of trade and multi-culture. That brings a certain type of creative person here. Over 30 per cent of the workforce in Amsterdam works in the creative industries,” says Mark Chalmers, Amsterdam gallery owner, founder of Creative Social and currently managing director of Vice’s global content agency, Virtue.

“There’s no better time to be here, and at Vice we’re really enjoying the momentum and excitement that comes with such creative diversity.”

Back to the beginning

25 years ago, Wieden+Kennedy set up its first outpost in Amsterdam. The reason was simple: the tax climate was suddenly favourable enough for brands to want to move their marketing headquarters to the city. And where brands go, agencies generally follow… You could say that was the beginning of Amsterdam’s international advertising scene.

A decade ago, there were six or seven big, international creative agencies in Amsterdam; a few big clients; and a sea of local Dutch agencies. Plus a sense of promise and good things around the corner.

Today there is a thriving marketplace for creativity, where almost every month a new agency seems to pop up – and occasionally shut down, like Sid Lee Amsterdam did recently – and where it can be increasingly hard to tell what’s actually a Dutch agency and what’s international. A mature market where most of those first big international agencies are still operating (in some way or form) – and where the Dutch agencies are increasingly playing catch-up in terms of innovative creative campaigns that win big at the award shows, like 2014’s ‘Sweetie’ campaign by Lemz and MediaMonks, and this year’s ‘The Next Rembrandt’ by J Walter Thompson Amsterdam.

And the Dutch creative industries are travelling; MediaMonks, MassiveMusic, BSUR and Kingsday are prime examples of Dutch companies that have opened up offices outside of their home country.

What do Amsterdam brands need now?

The marketing needs of brands are always expanding and evolving, and Amsterdam is no different in that respect. Andrew Smith, previously head of account management at 180 Amsterdam and currently global brand communications director at Booking.com, says data is at the forefront of such change.

“The combination of art and science is becoming increasingly important for agencies, especially when working with big data companies. Data helps us understand what is most important to those we serve and enables us to engage with our customers in relevant, useful, and authentic ways. If interpreted and used well, data can serve as a source of inspiration and a catalyst for creativity and effective brand communications.

“Amsterdam has an advantage (at least for a city its size) with the scale and strength of companies like Booking.com, Google and Facebook who all have significant presence here. The collective brainpower and innovation taking place helps fuel the creative community.”

Simon Summerscales, director at 72andSunny Amsterdam, claims that clients’ desire for efficiency and sustainable creative has lured them to the city.

“As traditional forms of advertising become increasingly less effective, creative agencies need to help their clients/brands establish stronger points of view and purpose. Make an impact in culture. We really believe that if you can move culture, you’ll move the brand and ultimately will ensure business success,” he adds, before citing the use of data as the enabler to making cultural impact through its work.

“We’re looking for the roots of influence, the key promoters and detractors around certain points of view or cultural memes,” he continues.

Jason Fulton, of Amsterdam research and brand strategy agency This Memento, says clients are “looking to get a deeper knowledge and understanding of the multi-dimensions of people before they become consumers.”

He continues: “The past seven years have seen us being asked to do deep-dives into people’s lives across Europe, and brands look for more of the similarities between the people they want to connect with, rather than the differences. I can’t really see that diminishing. The big opportunity is how brands and agencies try and integrate people’s online personas and online data with analogue research, on an ongoing basis, in a compelling way that get people inside the company to actually use it!”

Chalmers would rather invert the question of what Amsterdam brands need now, to focus on what millennials want from them.

“What are millennials looking for now from brands? Working at a brand, I would make this my central question and number one priority. By 2020, millennials’ buying power on experiences such as food, travel, entertainment will have doubled. Millennials care about brands that have meaning, they’re critical and are looking for value and honesty. The brands that will win are those that can connect to this audience in a meaningful, transparent way and content is the way to do it.”

The agency model adapted

With clients’ needs changing at a quicker rate than ever and Amsterdam being a flexible place, the city’s agencies are increasingly incorporating new processes and adapting their offering.

Emmanuel Flores, innovation director for J Walter Thompson, claims that the industry is now finally introducing “real innovation” in campaign output and process.

“The agencies that will win are the ones that can change and adapt their model. Providing unbelievably inspiring ideas to our clients, but with poor product delivery, is a bad business model. In order to solve this problem we need to learn from the operational frameworks that have worked in the past for other industries and, step-by-step, discover how our specific needs can be covered by such processes. Becoming agile and lean will only succeed when we understand how to live with uncertainty in an empirical way aiming for ‘relevance’.”

Kingsday co-founder Eric Ytsma also has a point of view on this as his agency recently adapted its model to include a data-driven insights division called Outsight. “The IT buzzword ‘agile’ has now entered the advertising industry. We all need to be quick on our feet. Clients need to be quicker than their disruptive competitors and agencies have to be quicker than their clients. Especially if you don’t want to end up as a communication execution factory.

“Nowadays, our industry is not just about selling creativity anymore, it’s about selling agility as well. By combining various data sets – coming from consumer research, client data and social networks – with the long-term brand and business goals of clients, we can define the triggers that deliver the most valuable opportunities for growth.”

Threats on the horizon

So what threats do agencies face? Well, there is increasingly more competition, including from freelance entities and small specialist shops picking up briefs. The days of the agency of record on big retainers seem a distant memory. There are more projects than accounts.

Additionally, brands are increasingly setting up their own in-house agencies, from the obvious and well-known examples like Google to the more traditional organisations like Dutch paint and chemical giant Akzo Nobel. Despite this, there is still enough business flowing through the city to keep its industry buoyant. However in a business based on talent – where arguably talent is the key product – perhaps it’s all about holding on to the best creatives?

Chalmers agrees that the talent drain is the greatest threat.

“Talent leaving those agencies and moving to a multitude of other environments, one being brands, many of which have understood the power of creativity as a business builder and established competent and creative people in the heart of their business. So there is less polarity between brands and agencies in Amsterdam. That’s why the collaborative approach is increasingly crucial, a considerable, necessary and enjoyable part of our Virtue business.”

Dutch digital design

Although Amsterdam still lacks powerhouses such as the R/GAs of the world, the digital industry is one of the largest growth sectors in the Dutch economy. In the annual survey of industry association Dutch Digital Agencies, revenue growth of 20 per cent is expected for this year – with a huge increase in business from outside the Netherlands.

Bert Hagendoorn, founder of agency collective Dutch Digital Design, says: “We take our rich design tradition to a digital level. Key to the success of our work is the Dutch mentality behind it: straightforward, problem-solving attitude, comfortable with other nationalities and looking beyond boundaries.”

This climate leads to successful and highly awarded physical-digital projects, like this year’s ‘The Next Rembrandt’, which was awarded 16 Cannes Lions (including two grand prix) and smaller but inventive projects such as ‘McTrax’, an interactive placemat for McDonald’s.

Amsterdam – and beyond

As the city’s creative and ad industry gets bigger and bigger – now worth an estimated €8bn – is the city known for ‘creativity without borders’ actually outgrowing its physical borders?

Entrepreneur and independent creative director Thijs Biersteker says: “The interesting thing is that people are always talking about Amsterdam. But I’m more interested in Amsterdam as an idea than as a city. What I mean by that is that Amsterdam in terms of geography is very small.

As the city is constantly changing in terms of business, a lot of people are spreading out and moving their studios and spaces beyond the city to Rotterdam, Utrecht and other cities. There is so much more space for a fraction of the cost. Lots of ‘makers’ and indeed my whole production infrastructure is now outside of Amsterdam. So in a sense, Amsterdam as an idea is spreading to the rest of the Netherlands.”

What does Amsterdam’s future look like?

Aside from continued creative success, it seems likely that craft will continue to rise and agencies and creative entities will continue to spread out away from Amsterdam to the other big cities. Those remaining within Amsterdam will move north of the ‘river’ to Amsterdam-Noord, were all the cool kids are heading. The newly redeveloped A’Dam Tower, spearheaded by MassiveMusic’s Hans Brouwer, is already becoming the symbol for the expansion in Amsterdam-Noord.

And business in general is likely to continue to boom – with one crucial caveat: the tax climate. As the old adage goes, nothing is certain but death and taxes. There is the real danger that all it would take is one change in tax policy and the Amsterdam scene could evaporate like mist rising from the canals in the morning...

Ultimately, creativity is a fragile gift that needs support, and Amsterdam, and its future success, is a strong example of that.

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