WPP Group underwent the worst revenue growth in 2017 since 2009, with its shares seeing the 15%-plus sharpest fall.
Meanwhile, Unilever, the once largest advertiser globally, has repeatedly announced cuts in advertising spending. U-Studio, its internal creative team, is taking on more responsibilities of its external agency and has managed to cut down 30% on agency expenses for Unilever in 2017.
A myriad of fore-mentioned events have aroused great attention to the traditional advertising industry for a while.
You won’t even hear goodbye when abandoned by the times. The present traditional advertising industry and even the entire advertising agency industry are subjected to criticism as never before. Does the repeatedly bad-mouthed traditional advertising industry have been abandoned by the times?
Dr. Michael Tang, President of HDT Holdings Group, gave a profound analysis and philosophical thinking on the issue in his keynote speech at the China Advertising and Brand Conference on March 27.
Should the advertising industry be criticized?
Reports from Magna and Zenith show mobile will take up the whole share of global ad growth, which also means that other channels all take on a marked decline. To cite Pony Ma, a Chinese mobile dividend winner, his success should be attributed to the development of 4G technology and smart devices. Advances in technology have expanded mobile channels and transformed Tencent from a social platform provider to a lucrative advertiser.
From a commercial point of view, entering the advertising industry is one of Tencent’s most correct strategies to expand its business empire. The advertising industry has not only adapted to changes of the times, but also enjoyed a development dividend amidst technological progress.
Meanwhile, we should also remain on guard against the disruption of technology to the industry. Decaying Motorola, which used to dominate the whole mobile phone industry, has lagged far behind in the smart-phone era. As providers of digital video products, Kodak went bankrupt early in the digital technology era while Fuji Film transformed itself to develop anti-aging cosmetics.
When the wheels of technology roll in, you can choose to break an arm for survival or jump on the chariot for advancing, but you can’t resist the force for change.
Should traditional advertising agencies be criticized?
History seems to repeat itself. For instance, , Lintas (Levers International Advertising Services), founded by Unilever as an internal advertising agency as early as 1928, became a professional advertising company after being acquired by the international advertising group IPG. However, the wheels of history have turned around and turned back to where they started. Unilever has once again set up an internal creative content unit with its name changed from Lintas to U-Studio rather than seek external advertising agencies for assistance.
In this regard, Dr. Tang believed that anyone or any industry should appreciate criticism. Because if you never receive any word of criticism, many chances are that you are hopeless. There is no point in criticizing except a waste of time. Traditional advertising agencies have been criticized to some extent to prove that they still have room for growth.
The force for change and the power of change
As Adams Fan, the founder of F5 pointed out in his well-known article “Survival Guide for Advertising Companies”:
“The crux of structural unemployment lies in that ad practitioners fail to meet market demand in terms of their knowledge, skills and ideas. The technological change represented by AI is sweeping across the board. Ad practitioners are short of knowledge on big data, in-depth learning among other fields as most of them receive liberal arts education without any clue about technology. Inflexible old employees will be listed in the first batch to be phased out by employers.”
New technologies and marketing methods are emerging, some in a flash and some in the ascendant. In such a technology-based marketing era, advertisers with liberal arts background need to work even harder to understand the cutting-edge technologies and find technology partners. This is the power of technological change.
Meanwhile, Dr. Tang also observed that in the wake of the recent data crisis, Zuckerberg, CEO of Facebook apologized for the leakage and misuse of user information and promised remedies through the newspaper instead of the internet.
With advances in technology, paper media has been gradually pushed out of business compared with the social media platform Facebook. However, their status and roles were subverted as the crisis of public opinions broke out. While changing the world, technology can also take its toll. Therefore, Dr. Tang suggested that advertisers enjoy and embrace technological change while maintaining independent thinking, professionalism and discernment so as not to be abandoned by the times!