During a recent workshop with young planners, a serious question occurred to Mike Teasdale, one that speaks to the massive shifts that have taken place in the discipline. So what business are planners in?
I ran a planning training workshop for an ad agency recently and I asked the young cubs to tell me what Planning is. Inevitably, I got a range of answers spanning the usual suspects.
But what struck me most was the undercurrent of confusion and uncertainty about where the function is heading. It revealed that underneath the relatively simple question of “What is Planning?” is the more complex question of “What business are we in as Planners?”.
Well, it’s a very different business to the one I joined in the 1980’s.
For a start, digital-driven automation is really starting to bite now. I’m not talking about automation of the unglamorous parts of our business, like paid search or e-mail or social media, or even about the automated distribution of online display ads through exchanges. No, I’m talking about machine-driven creativity.
Like it or not, we are moving from a world where a few highly paid people use empathy to target big audiences with TV ads about universal human themes, to a world where lots of machines use computing power to target small audiences with automated stories about niche topics.
This kind of digital-driven automation has led to the big management consultancy firms racing to acquire digital agencies to add a creativity funny bone to their operations. These management consultancy firms are ruthless about generating increased profits and growth for their clients. They believe they can bolt on a creative capability to their analytical resources and provide a new way for their clients to make money.
And they probably can. In a race between how quickly traditional ad agencies can embrace data versus how quickly management consultancies can embrace creativity, I’m not betting against the consultancies.
Like it or not, ad agencies must respond by offering more, often for less. And they must do it quicker than ever before. Everybody wants everything immediately. Indeed, the speed of digital metrics poses a serious threat to the traditional role ad agencies have played in developing memorable campaigns for big brands that build year on year. The balance between long-term brand building and short-term activation is tipping in favour of the short-term.
And never mind the threat from management consultancies, the real threat for ad agencies is from the tech platforms. Google and Facebook are basically a duopoly and they can deal directly with advertisers. The lack of transparency around programmatic buying is encouraging clients to cut out ad agencies and deal directly with these platforms. Think about it, there is no reason to assume the long-established value chain of advertiser to agency to media owner to consumer will last forever.
Moreover, the experience of working in a network ad agency today is very different from that of even 20 years ago. It feels like the life has been slowly squeezed out of them.
This is partly caused by clients, cost-cutting via their dreaded Procurement Departments. They want all the extra things agencies now need to offer to stay relevant, but they want them for less.
But the strangulation effect is also self-inflicted, the result of a holding company business model that slowly squeezes fat and fun out of agencies.
If you borrow money to buy undervalued agency assets, then squeeze them to perform better so that the share price of your holding company goes up, so you can borrow more money more cheaply to buy more undervalued agency assets to squeeze, then eventually it all runs the risk of stalling as you run out of things to squeeze. You go beyond cutting fat and get into cutting muscle. And if you cut muscle you don’t improve the quality of your strategic and creative output.
Of course, change is inevitable. Markets change, people’s needs change, innovations disrupt. It’s how you respond to change that determines your fate.
I was working in the USA when Yahoo! was worth $100 billion, yet within 15 years it was sold for $5 billion. And I was working in mobile telephony when Apple blindsided Nokia with it’s iPhone touchscreen. There was no counter-reply, no comeback innovation on Nokia’s part.
I’m not saying Planning is like Yahoo! or Nokia (or even like Blockbuster or Kodak), but I am saying that Planning is under threat as everything in commercial creativity changes.
I still believe Planning is about sparking opportunities for creativity by getting inside people's heads, but the context in which it needs to do that is completely different.
And that means we need to adapt. We need to adapt to the rise of data and the decline of insights, to the rise of short-term response creativity and the decline of long-term brand-building, and to the rise of platforms and the decline of ideas.
Let’s hope today’s Planning cubs prove to be adept at adapting!