After two difficult years, the advertising market is recovering despite many challenges: health crisis, war in Ukraine, inflation and cookieless. As usual, the recovery is stronger and faster in the United States (like the effects of the crisis): the advertising market is expected to reach US$745 billion this year, or US$117.2 billion more than the pre-pandemic level. 2019. A recovery almost three times faster than that seen after the 2008 financial crisis (Source Dentsu).
The trends seen today across the Atlantic will potentially be those of tomorrow for the European continent, and France in particular.
Tocqueville Valmierco-director of VTScan, has just returned from America where he took the pulse of the American advertising market and obtained valuable benchmarks from a multitude of agencies, from holding companies (Interpublic, Dentsu, Havas, Omnicom, etc.) to networks (TBWA, McCann WW…) to through “hot companies” like Forsman & Bodenfors (a Swedish agency here represented by its New York office).
What trends will be the most significant for the French market in the coming years? La Réclame raises three of them.
1. Notable and Radical Agency Initiatives
If luck smiles on the bold, some agencies dare to take initiatives that are as radical as they are innovative. Actions capable of inspiring other agencies that wish to change their model.
– From agency to SaaS
Brooklyn-based digital agency Huge announces: “We transform brands and build businesses”. For several months now, it has reinvented itself as an agency. SaaSbetween software and service engineering, and is now distinguished by highly commercialized offerings and the creation of lines of ” digital products summarizing their speeches. Huge’s ambition is to position itself as a growth accelerator company.
Not content with registering a growth of 19% last year, the agency explains that it wants to go faster and sees in this “service provider” positioning a model capable of surpassing that of traditional agencies.
Several consequences for the agency:
– A commitment “customer centric” total interventions and solutions delivered;
– A profound reorganization of talent based on this new model;
– New products in dedicated departments/business units.
How does an agency manage to do SaaS When are they most in demand for advice? The agency has too many demands and not enough resources. To respond to as many offers as possible, Huge defines the limits of his intervention (object, time, cost).
“If he SaaS comes from IT, Huge believes that the classic agency service of the communication agency model often results in projects that are spread out over timerecounts Fabrizio Valmier. To go faster, they have chosen to package their offers as a bundle. Based on the client’s brief, the agency determines the price and the number of hours needed to complete it. Thus, you commit to delivery by controlling the scope and cost (and therefore time) of what is delivered.”
Offers and interventions marketed as products, with a catalog of 45 specific interventions with, for each one, a fixed price that does not exclude economies of scale in certain places. “It has a price compared to a ‘delivery’, the catalog price may vary depending on the customer. The industrialization of the services sold allows the creation of a “classification yard””, so as not to sell more hours and TJM in talents.
No more free work, negotiated TJMs, discounts and absent clients. “In the end you no longer have to pay to playsummarizes Fabrice Valmier. Clients also note that the margin has increased to around 25/30%, in a “very proactive business” stance. These offers sound like insights into customers’ problems and meet their specific needs: create a new product.”
Offers with product suites are intended for different purposes:
– For DM and CXO: experience transformation pillar;
– For CTO/CDO/CIO: Realization of technology;
– For CEOs/CXOs/CSOs: Creating growth.
– The innovation consultant
The New York agency Proto presents itself as a new type of consulting agency that helps companies deal with disruptions.
This new form of agency was created by ex-R/GA Barry Wacksman, known for his role in developing the Nike+ FuelBand for the swoosh. He founded Proto thinking of it as an end-to-end innovation company. Here, innovation is “intersectional”, the agency designs prototypes and develops its own recommendations.
“Proto offers to help its clients find new growth paths “for intersection” of brands, experiences, data, design, sales and technologiesaccurate Fabrizio Valmier. It is a holistic and pragmatic approach to the intersectional insights of all departments in a company. This knowledge is very practical and is linked to the identification of positive futures.”
Will these new types of consultants settle definitively in France? Brands continue to rely heavily on agencies to reinvent their brand, their image, etc. Will they do it for everything related to product innovation? “In France, these agencies are developing and structuring little by little.observe. The difference is in the size of the market and the extent to which they prototype innovation. Some just think about it, others go so far as to make a POC (” Proof of concept “).”
He thus gives the example of Spintank, Productman (Buzzman), or Wunderman Thompson (with the emergency bikes for instance, editor’s note) whose acquisition of Velvet Consulting (by WPP) is part of this. The difficulty is finding the person or teams that are responsible for these innovations within the company. Then, once the idea (POC) has been thought out and designed, it is integrated into the organization so that everyone can use it.
2. Web3 and its universes in question
Metaverse, Web3, NFT, words that are on everyone’s lips (at least in those of a third of the agencies gathered), but that still question the impact that these innovations will have on marketing in general. And this, even in the United States where applications and other brand initiatives seem more numerous and advanced. If there is no doubt that these innovations are only in their infancy, they will naturally raise many questions. Of 7 questions posed, 2 prevail:
– How will Web 3 and Metaverse further the purpose of the brand?
– Will Web 2 platforms remain Web 3 platforms or Facebook, Spotify, etc.? Will they be supplanted by Roblox, Sandbox and others?
For several months, many brands, from all walks of life, have entered web3, from Nike (with NIKELAND and its NFTs) to Carrefour via Decathlon and Spotify, like Lacoste recently with a first NFT drop. However, if the interest of Gen Z and Millennials in NFTs and cryptocurrencies is already strong and will only increase with the increasing influx of brands that multiply collaborations and associations in virtual universes, the slightest jolt can hit the star platforms of the sector. hard. As the recent cryptocurrency crash demonstrates:
Other problems that arise:
– How to change your marketing in a universe that mixes the physical and the virtual?
– NFT the new CRM? Example with Nikeland and NFT to drive loyalty (Carrefour, Starbucks, Clinique, etc.);
– Is personal identity becoming increasingly digital in its construction?
– Will luxury brands sell more virtual than physical?
– What will be the link between the real world, the social world and the virtual world?
Recover equipment… and keep it
If the post-Covid advertising market is recovering, most New York agencies have not been able to find their employees. Offices, sometimes entire floors, are empty. Employees, now experienced in telecommuting, don’t necessarily want to find their space open.
And as noted Fabrizio Valmier“Unlike France, without any obligation on the part of the General Staff, it is very complicated for clients and agencies to bring equipment back.“The head of an agency told him that in 12 months he had renewed 80% of his teams (both commercial and creative). “For a structure of more than 100 people, it is difficult to establish a sense of belonging to the agency, share a common culture and simply evolve “together”. Paradoxically, this restriction does not prevent agencies from working well because the results are good and so is the business.”, he clarifies, however.
Can an agency really work without its face-to-face employees where work and collective emulation prevail? All the messaging and video conferencing technologies in the world will not replace the immediacy of a face-to-face exchange. In France, if teleworking seems to have been well adopted – after being imposed – 100% teleworking does not seem to become the norm within agencies. These also compete in initiatives to attract new talent and retain it…. on-site: new installations, internal events, etc.
This has not prevented many employees from trying to exodus to other cities such as Marseille to work 100% remotely. For Fabrizio Valmier, it can only work in a situation where business is booming. “With what’s going to happen six months from now with inflation*, the world market, all sectors combined, will logically slow down. From a distance, the risk is oblivion. The market contraction will certainly bring telecommuters back. In the United States, due to its size, being able to work remotely is already more cultural. Some freelance or engineering jobs are not a problem. On the other hand, for other professions (commercial and creative), one does not grow without seeing others, without being nourished by their experiences. Young people want to feel supported by a manager and learn things.”
The myth of the CEO of happiness to arouse the enthusiasm of young teams and employees has lived: “We must restore meaning to the presence, to the meetings, to the exchanges between collaborators, to the experience, to involve young people more regularly instead of letting them sink into a respectful silence of the cathedral.”It is an employer brand issue that is becoming more and more important, because without a sense of belonging to the agency, there is little interest in coming or not. “You have to instill value in the experience, in the presence, not in a new director of happiness.”
*On average, inflation should stand at 4.9% in 2022. Combined with economic growth reduced to 2.4%, “this contraction in purchasing power will weigh down the recovery dynamics through the weak dynamics of household consumption ”, estimates the French Observatory of economic conditions.