The traditional agency-of-record (AOR) structure has come under intense pressure in the past few years. Attribution and the ability to manage dynamic, real-time media campaigns have made marketing budgets work harder as fees for media planning andbuying erode long-term agency pricing models. At the same time, programmatic media buyinghas not only democratized investment budgets but also transferred power from the agencies directly to the advertisers, with Google, Adobe, and Facebook acting as the champions and change agents in this shift. Digital has ceased to be an alternative channel and has emerged as the future of all advertising and marketing, while the once all-important creative factor hasstarted playing second fiddle to strategy and technology integrations. Digital transformation leader Garry McGuiresees 2019 as a year of massive change and disruption in the marketing and advertising industries, with advertisers set to benefit from the looming changes.
Consolidation is among the majortrends poised to unfold next year in reflectionof a growing awareness that bigger is no longer better unless it results in truly differentiated services. As Garry McGuire points out, the world’s leading ad agency holding companies are under tremendous pressure to downsize, shed duplicate assets, and deliver more meaningful results for clients. In the recent presentation of its three-year growth plan, WPP acknowledged it had become “too unwieldy, with too much duplication” and would aim to “have fewer, more integrated companies equipped to adapt to a changing market.” With over $6 billion in annual revenues, Accenture Interactive has grown into the largest digital agency in the world mainly due to recognizing the collapse of the traditional agency model. It has developed a new marketing technology (martech) services-based offering that works across a company to address holistic customer needs rather than simplyseek to address marketing challenges. Along withconsolidation, 2019 will see the continued rise of automation, which will dominate the future of advertising. According to eMarketer, automated channels will account for over 70% of digital video and more than 80% of display ad purchases in 2018. “Programmatic advertising is no longer a silo or a distinct media channel – it’s simply how brands are buying ads,” Adobe Advertising Cloudchief Keith Eadie commentedfor CMO.com.
The new year will also bring far greater sophistication in ad targeting and personalization, with mainstream technologies allowing marketers to input goals (sales, new customers, loyalty program sign-ups, etc.) and leave the rest to an algorithm. Media investments can be changed and optimized every second to produce the desired results by personalizing creative approaches and offers to suit the preferences of each viewer. Thisis already happening and will be broadly available through agencies, deliveredas a service to clients through sophisticated partners, according to Garry McGuire. Along with customization, measurability will advance significantly in 2019 due to blockchain technology, becoming more pervasive to validate and authenticate ad viewership. Today, most advertising is discounted or adjusted for actual or perceived viewership or impressions, and while these numbers have become far more precise, click-fraud and other technologies have perpetuated the confusion. Revolutionary new companies such as VODXSuse blockchain to verify ad viewership and provide advertisers with actual viewership numbers that are more accurate than anything the media industry has seen to date.
The incoming year is sureto bring significant industry consolidation and changes at the agency level, which, coupled with the introduction of new technologies, will improve marketing for brands and consumers alike. Garry McGuire believes advertising agencies will win if they create differentiated offerings that balance great creative and integrated technology solutions to optimize results for all parties concerned. eMarketerestimatesthat 2018 will conclude with $260 billion invested in digital advertising worldwide, and the amount will surge to $376 billion within three years. This 40% growth will accelerate the creation of one of the most intelligent, valuable ecosystems in business.
Garry McGuireis a corporate advisor to Fortune 500 companies and former automotive executive who has steered numerous companies through the turbulence of digital disruption. Highly experienced in automotive, retail, and advertising, he has gained a reputation as a thought leader in digital strategy, digital transformation, and business turnarounds. He is also a prominent technology investor, drawing on his deep understanding of the sector and the expertise acquired as a CEO of several Silicon Valley companies.
Garry McGuire Named Senior Adviser at BlackRock Advisors as Company Expands its Automotive and Digital Transformation Expertise: https://finance.yahoo.com/news/garry-mcguire-named-senior-adviser-203000780.html
Garry McGuire Shares Insights about Automotive Industry in 2019: https://finance.yahoo.com/news/garry-mcguire-shares-insights-automotive-211500636.html