Ad industry needs to revert back to fundamentals

The end of the communications industry is nigh unless we quickly revert to the fundamentals of the business. The unceremonious resignation of Sir Martin Sorrell from his brainchild, WPP, is a signal that the attraction of agency consolidation has passed its expiry date and that the fake cure has been exposed.  

Our industry has been battered by a number of storms at the same time, severely eroding profit margins and blowing away the cash needed to invest in talent to take it forward.

Digital technology mopped up the hordes of staff that traditionally peopled advertising agencies. Suddenly there were fewer people to charge for. The collapse of print advertising has left a revenue hole that will be impossible to replace. Though television has grown in both quality and quantity, the cost of production remains prohibitive, and the return on investment has been reduced because of the availability of competing media. Social media has smashed the industry and reduced it to a duopoly.

The biggest storm to hit the industry is lack of diversity. And it’s not just an SA problem but a global one, as large multinational brands have illustrated. Dove and Pepsi were just two global brands to be accused of racism and lashed with negative sentiment. While both brands have apologised, the injury is permanent.

The industry has lost its core competence, namely creativity and building brands. Every day we see new examples of creativity on social media, while Black Twitter has proven to be the most incisive social commentator in decades, with the power to destroy established brands and elevate new ones. Brands such as Brownsense have become strong in a short period, and cultivated loyal followers, while eating away at incumbent market leaders.

At times like these, it’s easy to fall into a quagmire of buzzwords that have little or no meaning at all. Words like “self-reinvention” have become common – as if a business can be born again. The reason it’s so hard for industries to reinvent themselves is that they feed on an ecosystem that is made up of a robust infrastructure and a set of skills that evolves over time. Ignoring that is to ignore the truth.

As Uber becomes the overarching case-study presented in advertising pitches all around the world, “Uberise your business” is the new buzz phrase. The reality, however, is that Uber would not exist without a well-established infrastructure of smartphones and apps, and a culture of mobility. 

The industry has tried various ways to compensate for lost revenue. The problem is that it’s not offering new skills, but is trying to find ways of making new money from old services. It’s tried to get incentives based on a product that has moved off the shelves, but when a campaign fails, agency management blames distribution or pricing.

It’s also tried new terminology for old tricks. First they were called “endorsers”, then “brand ambassadors” and now “influencers”, but these are different names for the same thing: someone who is paid to speak well about your brand. 

In my tenure as chair of AdFocus, I want to help take the industry to a place we’ve never imagined. I am looking for real diversity: diversity of thought, of people, of sexes and backgrounds, and of various other elements that make up the kaleidoscope of humanity. An obsession with insights and results has removed the fun from our industry. And because getting to the top shouldn’t be a slog, but a blast, I’m hoping we can bring some of the fun back.  

Phumi Mashigo is the MD of Ignitive and the 2018 AdFocus jury chair. Entries for AdFocus 2018 are now open. For more information on this year’s categories and entry requirements go to www.adfocus.co.za