After two complicated years, the advertising market is recovering even if there are many challenges: health crisis, war in Ukraine, inflation and cookieless. As usual, the recovery is more intense and rapid in the United States (as are the effects of the crisis): the advertising market is expected to reach 745 billion dollars this year, or 117.2 billion dollars more than the pre- pandemic of 2019. A recovery almost three times faster than that observed after the financial crisis of 2008 (Source Dentsu).
The trends observed across the Atlantic today will potentially be those of tomorrow for the European continent, and France in particular.
Tocqueville Valmierco-director of VTScan, he just returned from the Americas where he took the pulse of the US advertising market and obtained valuable benchmarks from a multitude of agencies, from holding companies (Interpublic, Dentsu, Havas, Omnicom, etc.) to networks (TBWA, McCann WW…) through “hot companies” such as Forsman & Bodenfors (a Swedish agency represented here from its New York office).
What will be the most significant trends for the French market in the years to come? La Réclame raises three.
1. Notable and radical agency initiatives
If luck smiles on the daring, some agencies dare to take initiatives that are as radical as they are innovative. Actions capable of inspiring other agencies eager to change their model.
– From agency to SaaS
Brooklyn-based digital agency Huge announces: “We transform brands and build businesses“. For several months, it reinvented itself as an agency SaaSbetween software and service engineering, and today stands out for its highly commercialized offers and for the creation of ” digital products summarizing their interventions. Huge’s ambition is to position itself as a growth accelerator company.
Not content with having registered a growth of 19% last year, the agency explains that it wants to go faster and sees in this positioning as a “service provider” a model that can surpass that of traditional agencies.
Several consequences for the agency:
– I commit “customer-centric“Total of interventions and solutions provided;
– A profound reorganization of talent based on this new model;
– New products in dedicated departments / business units.
How does an agency do SaaS when are most in demand for advice? The agency has too many requests and insufficient resources. To respond to as many offers as possible, Huge defines the boundaries of its intervention (object, time, cost).
“If the SaaS derives from information technology, Huge believes that the classic agency service of the model of communication agencies often translates into projects that stretch over timetells Fabrice Valmier. To go faster, they chose to pack their offers as a package. Based on the client’s brief, the agency determines the price and the number of hours required to complete it. Therefore, it undertakes to deliver by controlling the scope and cost (and therefore the time) of what is delivered.“
Offers and interventions marketed as products, with a catalog of specific interventions that counts 45 with, for each, a fixed price that does not exclude economies of scale in certain places. “It has a price compared to a ‘delivery’, the catalog price may vary depending on the customer. The industrialization of the services sold makes it possible to create a “sorting yard””, Not to sell more hours and TJM on talents.
No more free work, TJM negotiations, discounts and absent customers. “In the end there is no more to pay to playsums up Fabrice Valmier. Clients also note that the margin has risen to around 25/30%, on a very “Business proactive” attitude. These offers sound like insights into customer issues and meet their specific needs: creating a new product.“
The offers with product suites are aimed at different targets:
– For DM and CXO: pillar of experience transformation;
– For CTO / CDO / CIO: implementation of the technology;
– For CEO / CXO / CSO: creating growth.
– The innovation consulting agency
The New York Proto Agency introduces itself as a new type of consulting agency that helps businesses cope with outages.
This new form of agency was created by former R / GA Barry Wacksman, known for his role in developing the Nike + FuelBand for the swoosh. He founded Proto as an end-to-end innovation company. Here innovation is “intersectional”, The agency designs prototypes and develops its own recommendations.
“Proto aims to help its customers find new growth paths “to intersection ”of brands, experiences, data, design, sales and technologyaccurate Fabrice Valmier. It is a holistic and pragmatic approach to the intersectional insights of all departments of a company. These insights are very usable and linked to the identification of positive futures.“
Will these new types of consultancy firms settle permanently in France? Brands are still largely turning to agencies to reinvent their brand, image, etc., will they do it for everything related to product innovation? “In France, such agencies are developing and structuring little by littleobserves. The difference is in the size of the market and to what extent they prototype innovation. Some just think about it, others go so far as to perform a POC (” Proof of concept “). ”
Thus gives the example of Spintank, Productman (Buzzman) or Wunderman Thompson (with the emergency bicycles For instance, editor’s note) whose acquisition of Velvet Consulting (by WPP) is part of it. The challenge is finding the person or teams involved in these innovations within the company. Then, once the idea is thought and designed (POC), it is integrated into the organization for everyone to use.
2. Web3 and its universes in question
Metaverse, Web3, NFT, words on everyone’s lips (at least on those of a third of the agencies met), but which still question the impact these innovations will have on marketing in general. And this, even in the United States, where the brand’s applications and other initiatives seem more numerous and advanced. If there is no doubt that these innovations are only in their infancy, they will logically raise many questions. Out of 7 questions asked, 2 prevail:
– How will Web 3 and Metaverse drive branding purpose?
– Will Web 2 platforms still be Web 3 platforms or Facebook, Spotify, etc? will they be supplanted by Roblox, Sandbox and others?
For several months, many brands, from all walks of life, have entered the web3 – from Nike (with NIKELAND and its NFTs) to Carrefour via Decathlon and Spotify – as recently as Lacoste with a first decline in NFT. However, if the interest of Gen Z and Millennials is already strong for NFTs and cryptocurrencies and will not fail to increase with the ever increasing introduction of brands that multiply collaborations and partnerships in virtual universes, the slightest jolt can hit the star platforms of the difficult sector. As the recent cryptocurrency crash demonstrates:
Other problems that arise:
– How to change your marketing in a universe that mixes physical and virtual?
– NFT the new CRM? Example with Nikeland and NFT to increase loyalty (Carrefour, Starbucks, Clinique, etc.);
– Is personal identity becoming more and more digital in its construction?
– Will luxury brands sell more virtual than physical?
– What will be the link between the real world, the social world and the virtual world?
Bring the teams back … and keep them
If the post-covid advertising market is picking up, most New York agencies haven’t been able to find their employees. The offices, sometimes entire floors, are empty. Employees, now experts in teleworking, do not necessarily want to find their open space.
And as pointed out Fabrice Valmier“unlike in France, without any obligation on the part of the General Staff, it is very complicated for clients and agencies to bring the teams back.“The head of an agency told him that in 12 months he had renewed 80% of his teams (both commercial and creative). “For a structure of over 100 people, it is difficult to establish a sense of belonging to the agency, share a common culture and simply evolve “together”. Paradoxically, this constraint does not prevent agencies from being able to function well because the results are good and so is the business.“, It fades, however.
Can an agency really function without its face-to-face employees where work and collective emulation take precedence? All the messaging and video conferencing technologies in the world will not replace the immediacy of a face-to-face exchange. In France, if teleworking seems to have been well adopted – after being imposed – 100% teleworking does not seem to become the norm within agencies. They also compete in initiatives to recruit new talent and keep them…. on site: new headquarters, internal events, etc.
This hasn’t stopped many employees from trying to exodus to other cities like Marseille to work remotely 100%. For Fabrice Valmier, it can only work in a situation where business is booming. “With what happens in six months with inflation *, the world market, all sectors combined, will logically slow down. From a distance, the risk is of being forgotten. The downturn in the market will undoubtedly bring back teleworkers. In the United States, due to its size, being able to work remotely is already more cultural. Some freelance or engineering jobs are not a problem. On the other hand, for other professions (commercial and creative), you don’t grow up without seeing others, without being nourished by their experiences. Young people want to feel supported by a manager and learn things.”
The myth of happiness chief officer to arouse the enthusiasm of teams and young employees is lived: “We must give meaning to the presence, to the meetings, to the exchanges between collaborators, to the experience, to involve the children more regularly rather than letting them sink into a respectful cathedral silence.“It is a question of employer branding that is becoming more and more important, because without a sense of belonging to the agency, coming on site or not is of little interest. “You need to instill value in the experience, in the presence, not in a new Chief Felicity Officer.“
*On average, inflation should reach 4.9% in 2022. Combined with economic growth reduced to 2.4%, “this contraction in purchasing power will weigh on the dynamics of the recovery through the weak dynamics of household consumption”, estimates the French Observatory of Economic Conditions.