The Warc Blog

The Warc Blog

Lady Gaga to save advertising?
Joseph Clift, Product Manager, Warc
Joseph Clift

Well, not quite. But the appointment by Polaroid of the US pop star as its "creative director" could point the way to how advertising works in the future.

At least, that's the view of Michael Birkin, a former vice-chairman of Omnicom who now heads the Red Peak Group, an experiential and sponsorship marketing agency. In a video keynote played at Time to Reboot, a Results International global seminar held in London last night, he explained why he believes the traditional ad agency is finished.

To Birkin, the advertising agency made a "massive mistake" around 15 years ago during the first rumblings of the digital revolution by "running for the money in back-end production". This meant agencies were "essentially giving away a lot of the creativity that they were doing - for nothing". Instead, Birkin argued, they should have taken a more integrated approach - advising their clients what to do creatively in the digital world. "Agencies could actually have charged more money for that, and recognised that, ultimately, the very thing that digitalisation was going to do was to commoditise the one place where they were making money - production," he added.

"So here we are today, where the advertising agency has essentially given up the high ground, and is now struggling, and failing, to hang on to margins ... [and] their loss is the gain of a whole plethora of new businesses."

Which is where Lady Gaga comes in. The star's link-up with Polaroid - facilitated by the Red Peak Group - was cited as one of the "novel ideas" that would lead to new kinds of creative work, characterised by its "fully immersed integration". Birkin said: "Next year, you'll see the launch of new products with her hand all over the design of them ... This is not an endorsement - it is a fully-integrated use of the most popular entertainer in the world."

Image sourced from Twitpic

A slightly less glamourous example of this kind of deep integration from the film world is the deal struck by Purina - a pet food brand - with the producers of Marley & Me, a 2008 canine weepie. "It is essentially the marriage of a brilliant creative idea and full integration with a piece of entertainment, which was then moved along across all platforms," Birkin explained.

In a separate presentation, Robin Grant, md at specialist social media agency We Are Social, also forecast seismic shifts for agencies. But he saw a brighter future, pointing out that big above-the-line shops such as Crispin Porter + Bogusky and Wieden + Kennedy are "really starting to get digital, or at least digital in its traditional sense". Generally, Grant said, earned media would become more prominent, with many agencies adding a larger PR component to their business; meanwhile, media agencies would continue to diversify their services as a response to shrinking margins; and agencies across the board would concentrate more on social media.

In short, "over the next five to ten years, agencies of all sorts are converging on each other as earned and paid become this single thing and work in synergy with each other".

But another speaker at the event - Paul Bainsfair, ceo Europe at iris Worldwide - showed there are always going to be risks for those agencies that dare step out into terra incognita. In a candid presentation, he walked the audience through some of the things that had gone wrong over the past couple of years at iris, whose "high risk" attempt to go global had negative effects on its business.

Bainsfair explained that some aspects of its strategy, including its establishment of many new international offices in a short time, became financially burdensome with the onset of the financial crisis. The downturn also resulted in HBOS - a UK bank and major iris creditor - change ownership, leading to the agency's debt repayment schedule being tightened significantly.

In response to these troubles, iris Worldwide has changed its international strategy, and now prefers to strike deals with partners in certain territories, rather than taking the more expensive option of opening a new office. Bainsfair said the firm aims to be debt-free in two years' time.

"We are still, after all this, a global company - and we're not broke," he added. "Despite the white-knuckle ride, we've grown up a bit, learnt a few things, and we're probably all a bit wiser for the experience."

A full report on the event, including presentations from 33 Across, FullSIX and Sponge, will be available on soon.

Subjects: Digital, Marketing, Advertising

12 November 2010 13:30

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