Growth, but not at any cost
Events of the past two years have reshaped the world. And while adland adapted, if it's to thrive it must transform. Marc Nohr dives into the four key themes of the IPA Business Growth Conference.
“People were literally crawling because it was so hot”, led the cover story in last weekend’s FT over a full-colour image of a fire of Biblical proportions. The story referred to extreme weather events in the north-west US thought to be caused by global warming. The story underneath talked about a resurgent London “reclaiming Europe’s share-trading crown from Amsterdam”.
As I was poised to write the opening address for this year’s IPA Business Growth Conference, I thought here we have the challenge in a nutshell: how do we grow back, but grow back better, more durably and sustainably?
To help answer this, we invited leading voices and thinkers from the industry, alongside economists, psychologists and academics to address the conference and offer their ideas. What soon became clear is that out of the crisis of Covid, opportunities abound, clustering around four key themes.
Understanding the opportunities for commercial growth
We must understand the opportunities for commercial growth across markets and vertical sectors. Bloomberg chief economist Stephanie Flanders shared some upbeat projections, which showed “the sort of V-shaped recovery” we had hoped for was in full swing and the curve would keep ascending at least until 2024. Her only concern was whether economies would overheat, with supply-side or inflationary effects.
Sticking with the theme of upward trajectories, VCCP’s Jonny Shaw spoke eloquently of the gold to be mined in the gaming sector. He cited figures suggesting gaming dwarfs the music and movie sectors combined, in terms of scale. And he argued that games are the most compelling form of entertainment known to mankind because they allow us to climb Maslow’s hierarchy of needs, from primitive fulfilment all the way up through belonging to self-actualisation. It’s a market that engages a fairly broad spread of punters and Shaw insisted that, pretty much, “the entirety of the next generation of customers call themselves gamers… So if you don’t have a gaming strategy, you don’t have a strategy for your next generation of customers.”
Sharpening our skills on pricing and commercial models
This is something I talked about in Campaign last year, warning agencies they were colluding in their own demise. This year, Kevin Mitchell of the Professional Pricing Society in the US offered a view that the behavioural economics expertise that resides in so many of our agencies should be deployed more often in our own approach to pricing with our clients. Perhaps an obvious point, but then the best thinking often is.
Caroline Johnson of the Business Model Company offered a blueprint for how we can wean ourselves off a commoditised and rate-card based model where we are cast as compliant executional partners, to more of a productised and consulting model, where we act as challengers, focussing on value creation. And we sell and charge for it accordingly. It’s not easy, but I know from the commercial progress we have made at the Miroma Group, it’s very powerful when you get the value creation piece right
Transforming our organisations
Three different experts joined Jane Asscher, uniting on the need to understand organisational transformation to ensure we are better equipped to compete.
LinkedIn’s Tom Pepper explained that the pain experienced in the employment market during lockdown was not evenly distributed, with women, for example, suffering bigger job losses alongside rising domestic expectations compared to men. Tom counselled that “the ability to attract talent in the future will depend on the decisions we make now”. And his recommended course of action? “We need to capture the opportunity with flexible working and incorporate a skills-based hiring approach” to address gender and D&I issues.
Professor Richard Jolly acknowledged that the uncertainty we have all experienced over the past year is inherently stressful. At an individual level, Covid has created fatigue and brain fog, both of which are inimical to creativity and innovation. And at a corporate level, he was clear that “what we’re really talking about is a crisis in marketing. The world senior marketers grew up in is fundamentally different to the world we’re in today. Marketing has lost a lot of credibility. Agencies and clients have forgotten what agencies can uniquely provide: the alchemical process of creativity to transform businesses, brands and sales.” In a memorable phrase, he warned: “When you’re busy fighting alligators, it’s hard to remember you were trying to drain the swamp.”
True to his name, Jolly offered some uplifting advice. He reminded us as employers not to “underestimate the impact you have on your own staff”. He enjoined agency leaders to create an environment where employees can be honest without fear of scorn and where they have permission to resurrect work/non-work boundaries. And at a corporate level? “We need to be agile not just to react to changing conditions, but to claim back a creative culture”, urging us to resist the seemingly relentless slide into transactional thinking, in favour of the value-additive creative, which is this industry at its best.
Building and demonstrating our ESG credentials
We investigated how we wrap our heads around the massive issues thrown up by ESG. What’s clear is that we can no longer entertain thoughts about growth at any cost. Instead, we need to think about creating durable or sustainable growth. Our new research study, conducted by Opinium, revealed that while agencies are still chosen for their creative and strategic prowess, ESG priorities are changing and playing a growing role in agency consideration. A quarter (25%) of clients said they had started working with an agency due to good ESG practices and 16% have stopped using an agency due to poor ESG practices. In addition, companies are starting to demand that proof is formally measured. Agencies must now walk the walk.
The events of the past two years – from #MeToo and #BLM to Covid and ever-more extreme weather events – put our industry at a crossroads. There is a commercial imperative to grow, but perhaps the biggest question of all is how we grow. It is our duty, as global citizens and (at our most creative) powerful catalysts for change to hold ourselves and clients to account.
By focusing on these four areas, I believe, agencies can deliver sustainable growth into the future. A future that, in the words of IPA President Julian Douglas, is based on “a new-found agility in changing how we work with each other, pivoting to new opportunities created by our new way of life” and “creating a flywheel effect, relentlessly moving forward turn after turn, building momentum to the point of breakthrough and beyond… we are uniquely placed to do this”.
Marc Nohr is Group CEO, Agencies at Miroma Group.
This article originally appeared in Campaign on 9 July 2021.