Will Hamilton reports on Trends in New York and LA from the Adforum Summit and how they affect CMOs here.

Having been a key member of the Adforum World Summit for the last five years (the Worldwide summit of the leading 25 intermediary consultants from around the world) I thought I would ‘turn the telescope’, and give an independent view ‘for clients’ on what’s trending ‘over there’ – some key learning’s that may help clients managing the performance of their agencies here.

There is an ‘egg breaking’ shift in the way agencies are structuring themselves for the future and this stretches way beyond advertising. The agency resourcing model is changing very fast and it is evolving.

The 15th Adforum Worldwide Summit met with 36 of the top creative agencies, media agencies, tech start-ups, data, digital and direct agencies, global consultancies, content providers, production companies, and even the American National Advertisers Association (ANA).

Ten Trends from New York:

• The agency resourcing model is evolving at a very fast rate in what is becoming a more uncertain economy.
• A blurring of lines between: – advertising, consultancy, content, data, direct, digital, CRM, media, technology, production and influence marketing.
• A fragmented market – clients have infinite choice – the CMO remains the key decision maker.
• A move from Agency Of Record to Key Partner Agency.
• A Post Media Era – from reach to attract – to full attribution.
• Agencies seeking ‘challenger clients’ – networks trying to be disruptive and develop challenger status.
• Some agencies ‘lowballing’ to maintain status – some evidence that traditional networks are struggling to keep talent.
• A significant media transparency issue, (US centric), where dealings are deemed to be rife in the industry.
• Genuine start ups, incubators, SME’s – are becoming the pioneers of the digital industrial revolution.
• Standout agencies this year: included R/GA, Hearts and Science, iris worldwide, and VCCP.

New York is Booming – with Innovative new ways of thinking and working, office envy is evident, Los Angeles has become the transect between ‘martech and adtech’, much of this is ironically being led by Brits working overseas. The ‘Great Rebundling’ of agencies is well underway. This has led to a fundamental need for clients to challenge their leadership, gain a wider understanding of ad serving technologies, manage performance and the levers for growth. Brands need to fully embrace customer centricity through listening, engaging, and learning.

Key Learnings:

• We are living in the midst of an expectations gap between what consumers want and what they can get – created by the disruptor brands, airbnb, uber, and netflix which have set standards which entrenched brands cannot live upto.
• A blurring of lines – means different agencies should be used for different communication roles.
• Agency of Record (AOR) agencies are becoming Key Partner Agencies (KPA).
• In terms of content – 90% of business leaders at C-Suite level believe that executives should be responsible for content strategy.
• Growth of In House – 65% of content production in the US is being built directly by clients or in house agencies.
• Internet video in the US will account for 79% of global internet traffic by 2020.
• Clients are still looking at ‘low ball’ efficiencies in areas such as production and holding group deals.
• Time dependency – only 5% of a CMO’s time is being spent with their advertising agency in this new way of working.
• Evidence that some clients are beginning to get to grips with working with Google and Facebook – pro-actively driving value through ‘connected selling’.

We noted that the most successful agencies are winning their new business without pitching. Business is often being placed, by an intermediary in an advisory capacity, without a formal pitch process.

The growth of the holding company pitch is the new norm, something given the proliferation of services is definitely here to stay, something we have led with Birds Eye /Iglo and SCA across Europe.

For agencies, a key question is (and a return to Michael Porter’s value chain analysis) – where and how do they add value? Zero investment will lead to a Zero margin, but the smarter ones are investing heavily in talent. The agencies that impressed most were those not afraid to back themselves and those that were investing in start ups/incubators with innovative ways of working. The agencies that see Procurement as an equal to the Marketing team seem to do well. The future belongs to those clients that can harness the new technologies, drive topline growth, navigate the complexity of managing performance, and optimise their agency relationships.  For more information on trends, please contact us at will@haiconsulting.com

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About Hamilton Associates:

Hamilton Associates helps clients to get the best from their communication partners by advising on agency selection, negotiating remuneration and servicing structures, and optimising the relationship to achieve exceptional performance.