MIAMI BEACH: Clients, tech companies and consumers are all potential “frenemies” that are challenging ad agencies, according to Ken Auletta, a renowned writer and journalist for The New Yorker.
Auletta conducted approximately 450 interviews with marketing leaders in writing Frenemies: The Epic Disruption of the Ad Business (and Everything Else), a book due for publication in June 2018.
“If you think about the threat to the ad-agency business, you are surrounded by friends who are also your enemies,” he said. (For more detail, read the opinion piece: Ken Auletta's new book has made the 4A's twitchy.)
By way of illustration, Auletta cited Procter & Gamble, the consumer packaged goods giant, bringing certain media duties in-house. “That’s when the client becomes a frenemy,” he said.
Similarly, major tech players are claiming a growing share of adspend, but their position – as exemplified by recent controversies surrounding data usage and brand safety – indicate the complexities of this relationship.
“You think about consulting companies: Frenemies. You think about Google and Facebook: Frenemies. So those are some of the threats to the ad-agency world,” Auletta said.
More damaging still, potentially, is the response to intrusive ads among consumers. “But it seemed to me that the larger threat – an existential threat to the advertising world – is that the public has become a frenemy,” said Auletta.
“You have this device in your pocket with a very small screen. It’s very personal. The thought that you are going to interrupt me [with an advertisement]: Who gave you permission to interrupt me?
“Why do roughly 20% of Americans use an ad-blocker? Why do over 50% of people who record a show on their DVRs skip the ads? It’s a real existential threat to all of you in the room.”
This issue, in turn, poses a profound threat to the media industry. “There’s also a threat to media: Without advertising dollars, there are no newspapers. Many TV [stations] and magazines would perish,” Auletta said.
“And, by the way, Google and Facebook would perish – 97% of Facebook’s revenues [and] 87% of Google’s come from ad dollars.”
The executives interviewed for the book included leaders from agency holding companies, as well as marketing experts from enterprises like Unilever, Bank of America and Facebook.
Sourced from WARC