Advertising M&C Saatchi Predictions

Place your bets: 2018 will be the year of hard choices

By Giles Hedger | CEO

January 15, 2018 | 4 min read

2018 will be the year in which advertising agencies make some of the hard choices that they’ve been putting off for a decade.

Giles Hedger

I say a decade because the industry’s need for reformation can be traced back to some key events in the mid-to-late Noughties.

For example, the banking crisis of 2008, which rebased the marketing-driven economy forever. The rise of social media advertising platforms, which rewrote the mass marketing playbook forever. The launch of the iPhone and iPad, which began the shift in consumer electronics towards mobile-first computing and changed the time and place paradigm of advertising forever. The testing and optimisation of IBM’s Watson, initially as a quiz-show contestant, but ultimately as the precursor of scaled artificial intelligence that would change automated marketing forever. The start, in 2007, of John Lewis’ Christmas advertising tradition, which helped to revive long-term emotional priming and militate against the emerging digital marketing model, breaking the industrial consensus forever.

These and other forces, set in motion a decade ago, have combined awkwardly and powerfully and now exert such overwhelming pressure on the viability of advertising agencies that we have no choice but to place some big existential bets.

I would argue that we can no longer be all things to all clients or host a tangle of contradictory business models. It is not possible to be labour-intensive factories and at the same time be lean and trusted consultants; we can’t hedge our bets as a jack-of-all-trades. Instead, we need to work out what we do that clients still value; what we do that software can’t do more quickly; what we do that algorithms can’t match; and then – to paraphrase Quentin Crisp – we need to do it like hell.

If you’re a CEO who is entrusting yourself to the forces of positive ambiguity, be very afraid. If your strategy is to shape-shift towards some unmarked horizon, removing cost and hope, one brittle Jenga brick at a time, then cancel Barbados. If your only model is to recapture through linked execution the value you give away in ideas, find a biro and the back of an envelope. 2018 is the year of hard choices.

If you don’t believe the history lesson, consider the realpolitik. Consider the cost to agencies of prioritising open-ended diversification ahead of revenue. Contemplate the increasing horizontality across holding companies and think about the unbearable pressure that this transfers to the notion that one sibling agency is intrinsically different to the next. Think of the gauntlet, thrown down this year so vividly by acquisitions by major consultancies, and – in your head – divide the agency world into those who maybe still could and those who definitely never will justify a position and a premium upstream of execution. Survey the pressure on advertising’s defining screen form and the temptation to re-shape whole business models just to capture what may or may not be a viable revenue source somewhere at the fast, cheap end of the content spectrum. Consider all these things – perhaps even at your leisure – but return to work in January with decisions.

It’s been fashionable to inhabit the grey space this past decade. It’s even been exciting. Ambiguity has been reframed as a positive state of fluidity – a high integrity, future-ready limbo. But limbo is now a luxury that few agencies can afford, and a welcome dose of black and white will need to return to agency leadership in 2018.

It’s time to place your bets. Or, if you prefer the language of the Riviera, faites vos jeux.

Giles Hedger is CEO of M&C Saatchi

Advertising M&C Saatchi Predictions

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