Who are the Winners and Losers in the Game of Advertising?

How quaint the industry used to beamp160 That39s before CMOs became utterly confused by digital and social media and before the blood combat among procurement agencies and holding companies drove out all the profit talent and fun from the industryamp160 Winning was redefined to match the new corporate emphasis on quotshareholder valuequotamp160 Holding companies quotwonquot by squeezing out growing profits advertisers quotwonquot by driving down fees and agencies quotwonquot by delivering profits from downsized operations and in finding new clients to replace the dissatisfied clients they just lostamp160 What a terrific definition of quotwinningquotamp160 It39s like the US Army39s statement during the Vietnam War quotIt became necessary to destroy the town to save itquotHow hard would it be to turn back the clockamp160 Agencies will have to develop new marketing strategies for their clients39 stagnant brandsamp160 This will require business analyses and skills that agencies do not have significantly improved Scope of Work SOW planning and longterm partnerships that agencies have not enjoyed for decadesamp160 Their clients will need to empower them and pay fairly for jointlyplanned Scopes of WorkTrust and fairness will need to be restored which will require a complete reeducation of procurement who have long forgotten about the value of longterm strategic supplier partnershipsamp160 Hey procurement why not read The Machine That Changed the World about how the automotive industry was saved through strategic supplier partnerships and good procurement practicesamp160 You might learn something from your own history long since forgotten or ignoredWhat about the holding companiesamp160 If they help to strengthen agency organizations and SOW operational practices so that their agencies can become more effective on behalf of clients they would reap future benefitsamp160 Their successful agencies could grow and become profitable in a healthy way and this would benefit holding companies and their shareholdersamp160 The current strategy of squeezing the life out of agencies to generate the appearance of growing profits is a doomsday approachThe major decline of holding company shares in 2017 ought to be a signal that new strategies need to be very quickly developedamp160amp160I doubt that this will happen though since holding companies would need to announce a pause in profit growth while their agencies invest for the futureamp160 This would require a degree of candor by holding company executives and a degree of investor sophistication that we have not yet seenThere has been too much industry emphasis on winning in strategically bankrupt waysamp160 Holding companies advertisers and agencies have been seduced by the concept of shareholder value and this has led to shortterm thinking that has had losing as the outcomeWe might be at a point where most of the shareholder value has already been squeezed out of the industryamp160and the future will be grim and dramatic except for the financially healthy management consulting firms whichamp160have the skills and capabilities to restore advertisers back to healthamp160amp160If this is the case then advertisers and consulting firms will be the future winners in the industryamp160and agencies and their holding company owners will be the losersCartoon credit Peter Steiner The New Yorker The Cartoon Bankamp160 With permissionClick the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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Who are the Winners and Losers in the Game of Advertising?

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Michael Farmer

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Who are the Winners and Losers in the Game of Advertising?

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