As Published in Synergyzer Annual 2020.
Whenever I ask myself, what is the best structure of an agency business in today’s world?, I always find it a challenge to answer. As always, we are confronted with changing realms and realities, many of which are external and do not leave us much choice for control. Having said that, this does not absolve us from the responsibility that we need to adapt to a world of digital frontiers that will continuously change the machine versus human dynamic.
To me advertising is a business where the role of human will always be central to the process of communication. Machines can help influence operational processes, but the real key to unlock the potential of a campaign rests on the big idea, which nucleuses on the human factor since Artificial Intelligence or AI is not sophisticated enough to create big ideas, so far. I do not know if that will happen in the future, but I have my doubts.
Now that we have established the importance of the human factor to remain the epicenter of the advertising business, it is important to understand the composition of the age groups that should be a deliberate part of the HR strategy. We need to be cognizant of the fact that technology has not only driven change in media habits and purchase preferences, it has clearly distinguished age or generation-based customer types that are significantly different from each other. In the year 2020, we clearly have Baby Boomers, Generation X, Millennials (also called Gen Y) and Centennials (also called Gen Z). The complexity is not only due to four different age groups but the innate different perspective that each of these groups bring to the table and create distinct impressions for choices.
As if the job of the advertisers was any less less complicated that they are now challenged to view purchasers with not only a different lens, but also from the POV (point-of-view) of their lifestyle preferences and media habits. In the jungle of media choices, particularly with reference to digital media, there exists a plethora of online options to target and include.
This brings us to a really interesting discussion where we not only realize that each of the generations is a stakeholder in the functioning of the advertising agency and should be reflective in the composition of the workforce, rather this also means that the next 10 years or so will also be one of transition that will influence the leadership direction of the business. In other words, the impact of Millennials in leadership roles will keep increasing till they become the largest representative generation in the top management of agencies.
Another interesting debate for hiring managers to sit back and think through is the type of human resources they need to build a versatile yet winning team. We do not need to be reminded that the increasing role of digital media in the overall media plan creates the need for younger and more vibrant creative and account management roles that are increasingly becoming important. The plot thickens as leadership lies still with the earlier generations – Baby Boomers and Gen – Xers – which points to the fact that there is an important role to be played by those in senior management roles. They have the important responsibility to develop a strategy that identifies the right mix of Millennials and Gen X groups in the overall structure and ensure their composition in teams where they work in tandem to work in harmony for client brands.
Now that we have set the stage for what is needed in terms of HR composition, let’s evaluate ad agencies in Pakistan. We keep talking about the dilemma of mediocrity due to lack of concept writers, lack of professionalism and ethics, form versus content etc.; though these are not new arguments, these now feature into the central theme that the current advertising leadership needs to question to be able to think differently and to force themselves to recognize the elephant in the room. Let me assure you that the large advertising agency set-ups that once ruled the roost are now strongly challenged in North America and Europe, so thinking of bringing large affiliate international agencies on board to be our saviors is not going to sustain our agency businesses.
The focus today, is on dynamic and nimble teams that work in an agile manner to deliver pieces of a puzzle. Gone are the days that we required one-stop solutions that were supposed to deliver everything under one roof. Having experience of working in North America, I have already seen several changes in the client-agency relationship where the key is to have horses for courses i.e. agencies need to have specialists who understand the digital medium from a Paid Media, Owned Media and Earned Media perspective. For each type of media there are multiple specializations within to develop specialists for further expertise within Content, Design, Customer Experience, Behavioral Economics etc. These dynamics are bringing a huge change in the structure and deliverables of the advertising business. Each year agencies are confronted with large clients taking over a certain portion of the agencies’ functions by creating in-house teams, leaving less and less on the table for the agencies to hold on to in terms of business.
You may be thinking that this is so not true for Pakistan; and I agree that perhaps it may not be true today. Yet western influences and management styles have always influenced Pakistani businesses, And this will happen at some point, which maybe sooner than we expect. Thus it is high time for the management of advertising agencies to bring specialization levels that are most likely non-existent today and lead the way for brand marketers for guidance. This is easier said than done, but the luxury of time is very much gone now. With a very young Pakistani population, and a fast-changing digital environment that now includes new digital startups and entrepreneurs; economic dynamics can change drastically. Learning from history, countries like Pakistan leap frog with digital influences and when that happens, it creates a void between advertisers and consumers and changing expectations are not met.
Amazon is a classic example due to which brick and mortar retailers are closing fast, and it is creating a domino effect. This is also leading to large empty retail spaces of real estate that is drilling a hole in the real estate business too. And this is only one example of a giant e-tailer disrupting the market so fast that physical retail businesses are forced to compete more online, with larger costs due to physical presence. What seemed to be an advantage for Walmart et all, is now becoming a liability.
In conclusion, I feel that advertising businesses must re-visit their current structures and outline the market dynamics and where they will land them in the next 3, 5 and 10 years. They should learn from international agency affiliates and partners to understand the changes and rapidly build out a plan to service clients differently. They need to have clear plans for training and developing talent, even at the cost of bringing trainers from other similar markets with recent successes in new approaches. More importantly, if they want the organization to stay in business, there has to be clear succession planning with personal growth of Senior Managers linked to the growth of their own teams.
The million-dollar question is,
“Are Agency owners ready to address the elephant in the room?”