There was a flurry of agency acquisitions this year which began in February with M&C Saatchi buying Bohemia, leaving few independent agencies left. The most high profile of the bunch was The Monkeys $63 million sale to Accenture, which led to much commentary, and controversy, around the impact of consultants on the advertising industry.
The next consultant to make its move in the market was RXP, which has largely flown under the radar in the market. The digital consultancy snapped up The Works for a $33 million price tag in August. A few weeks later, PwC confirmed it was taking a minority stake in new Melbourne agency Thinkerbell.
Then came the news Deloitte had ransacked McCann's Melbourne team, scooping managing director Adrian Mills, ECD Matt Lawson and head of strategy David Phillips.
And as predicted below by The Works founder Damian Pincus, consultancies won't be slowing down. In fact, he predicts we're likely to see even more activity in this space and in an interview with PwC earlier this year, the business said they are interested in further creative acquisitions.
Founder of indie agency Bashful, Simon Bookalill, predicts independents will become a rarer breed. And they already are, with AJF Partnerships ending its 12-year independent stint in November, purchased by digital company Trimantium GrowthOps. The Hallway has been rumoured to be selling, but instead told AdNews was interested in acquiring, and Sean Cummins, founder of Cummins&Partners, says there has been 'phenomenal interest' in his agency.
The Monkeys CEO Mark Green argues below that whether agencies are attached to consultancies, networks or are independent is irrelevant and it will come down to the work they produce for clients.
He has a point - the full impact of consultancies is yet to be seen in terms of the work they can produce. But the new propositions in town have led to big staffing shake-ups across Melbourne. Time will tell if clients will follow the shiny new toy too.
While Sydney was once considered the hot bed of creativity for Australia, Melbourne agencies have been lauded this year at all the big award shows and a raft of Sydney agencies are keen for a slice of the action, especially with Toyota and David Jones relocating south.
The Monkeys,The Hallway, R/GA, MercerBell, With Collective and Bohemia have all announced they are opening up shop in the Victorian State. Saatchi & Saatchi, M&C Saatchi and TBWA are bolstering their teams in preparation for the move of their Toyota, Lexus and David Jones respectively.
With so much movement, it's likely more people will be jumping ship in 2018, as well as Sydney bosses, like MercerBell's Nick Mercer who is relocating to expand the businesses.
All eyes will be on Clemenger Melbourne next year following the defect of their leadership, as well as Cummins&Partners which has also been tasked with rebuilding after a number of exits across the group.
In news that impacts the global industry, Cannes Lion announced a slate of changes for the 2018 award shows. Of the changes, an awards cap means one piece of work can only be entered in six categories. This will hopefully give a more diverse showcase of work the ability to shine, rather than a one hit wonder dominating the entire festival.
See all the creative predictions from McCann, Ogilvy, TBWA, 72andSunny, M&C Saatchi and more below, and if something has been missed add your views in our comments section.
MercerBell CEO Nick Mercer:
We will see the continual commoditisation of communications as more clients invest more budget into ‘marketing cloud platforms’. This will lead to clients building greater capability internally particularly in the content and technology space which reduces their reliance on agencies. This could provide an interesting opportunity for agencies to grow revenue by educating client marketing staff on how best to use these platforms. Clients will seek and pay for live hands on experience. 2017 is the year we will see clients using first, second and third party data to improve personalisation of messages across a multitude of channels outside of email. The early adopters of greater personalisation will be able to deliver significantly improved customer experiences and maybe steal a march on competitors, for a while at least.
The Works founder Damian Pincus:
The writing is now on the wall. And the change in our industry is starting to take effect. WPP, the world’s biggest advertising group, has already seen its valuation drop by more than a third to £16 billion since March. Two main themes were cited for this, the slowdown in spending by FMCG companies and the fact that Google and Facebook or management consultancies ‘could’ disrupt the agency model. Digital transformation businesses like Google, Facebook and management consultancies such as Accenture, Deloitte and our owner, RXP, have disrupted the agency model and will continue to do so in 2018. Australia’s rapidly growing digital economy has been valued at $79 billion or 5.1% of GDP – bigger than traditional industry sectors such as agriculture, retail and transport – and it’s forecast to grow to 7.3% of GDP by 2020. Smart companies know now more than ever that great customer experience can drive brand preference and digital transformation is a key driver in facilitating that. Agencies such as ours, Thinkerbell and The Monkeys have seen this future and are accelerating to drive it even faster. We are likely to see even more activity in this space as consultancies acquire or develop joint ventures with creative service businesses to build out their end-to-end capabilities.
The Monkeys Group CEO Mark Green:
Most of our industry will continue to freak out about the future whilst a quiet few will set about changing it forever. It's a great time to forge new paths, make some bets and be the business that thrives on doing things differently, and has the capability to know what is good and different in equal measure. These businesses will prove the value of creativity and lead the next generation of highly valuable and widely useful agencies. Whether they are attached to consultancies, networks or are independent is irrelevant. What is relevant is the work they make and the value they create for their clients.
McCann Sydney MD Adam Lee:
I hope 2018 will be the year in which agencies take a stand against pitching without getting paid. Until we, as an industry, make a conscious and collective stand against giving away our IP, we will continue to drive down the value of what we actually sell – creative ideas that help drive our clients’ businesses. Year on year we get paid less to do more, so we simply can’t afford to give away as much as we do.
TBWA CEO Paul Bradbury:
While creative firepower remains table stakes, the very best creative agencies (and possibly consultancies) will be defined by brilliant strategic planning and the ability to unite brand, comms, cultural and data planning.
CHE Proximity CEO Chris Howatson:
There will be a frenzy of consolidation.
Clients will seek agencies that have which of the following:
- Understand the commercial drivers of their business
- Build data assets that offer a superior understanding of the customer
- Create ideas that live beyond communication
- Deliver a single experience across medias
- All of the above
Core founder Jon Skinner:
2018 will see Alexa and Siri hook up on Snapchat and go on to become the world’s first gay robot couple. Their wedding will be streamed live on Facebook, with exclusive photos appearing on the side of Coke cans. Cindy Gallop will be outraged by the lack of gender diversity, while Ritson will argue nobody actually watched it. Sadly, the robo-romance won’t last due to a communication breakdown caused by the NBN. Their story will come to a tragic end with the inconsolable Alexa ordering herself a euthanasia kit from Amazon. Though, luckily for her, the drone will deliver it to her neighbour by mistake. Meanwhile over in adland, keynote speakers will espouse the need for ‘Storytelling’, agency networks will twist themselves in knots over consultancies, Vodafone will move agencies twice, the SMH will become an A4 flyer and Vegemite will launch a perplexing sub-brand. Consumers will be blissfully unaware of all of this, as they’ll be binge-watching Ozark on Netflix.
Deloitte creative, brand and media partner Adrian Mills:
There’s pressure in the creative business and that’s a good thing. No pressure. No diamonds. Out of this we’ll see some very good people create some very exciting businesses and I can’t wait to see what they do. There’s a lot to look forward to.
Saatchi & Saatchi managing director Mark Cochrane:
Search by voice will be democratised.
A few brands will find a really innovative way to use it.
Other brands will then see the case studies, and say “wish I made that”
(Be line 2, not line 3)
PwC chief creative officer Russel Howcroft:
The smart advertiser will see the opportunity to slow down. While the creative industry simultaneously reminds itself that the long term effects of brand building communications is the core reason for advertising success.
72andSunny partner and MD Chris Kay:
I'm hoping that in 2018 companies will finally understand that diversity is not a casting brief at the end of a project, but having a company and partners that are made up of talent that look and sound like new Australia is the only way to truly culturally connect with the modern Australian consumer.
McCann CEO Ben Lilley:
In a word: creativity. As people face ever greater demands for their attention, our creativity is more crucial than ever for brands to stand out and connect. It's also the one proven link to effectiveness. Too many marketers risk becoming distracted by tools and offerings that are diluting their effectiveness. 2018 will be the year that sorts out the brands and agencies that truly understand creative effectiveness. And those who don't.
Loud planner Sarah Mould:
With ad blocker usage growing and audience targeting becoming more sophisticated, personalisation will be key in 2018. We need to use ad tech not just to disrupt, but to connect. The creative use of AR and VR will need to be underpinned by cultural insights that will take this tech from becoming a potential fad to being part of the consumer day-to-day experience. Programmatic buying will enhance our ability to break into the consumer’s digital bubble, but for this to work, we need to produce content that engages with our audience’s values for it to be relevant to them.
BWM Dentsu Melbourne MD Belinda Murray:
I believe the more human we are at work, the better ideas we have. So, I predict in 2018, a year when jobs in our industry won’t always feel like work, a year of industry-wide transformation. We will bring our Saturday selves to work, we will be explorers and inventors, free, human and passionate. Creating unique experiences that connect us better to our client partners, their brands and ourselves.
303 MullenLowe CEO Nick Cleaver:
2018: Winter is coming. The white walkers are marching south. Time for the kingdoms of science and creativity to ally against them. Join the alliance fast or you’ll become one of the Wights.
BMF executive planning director Christina Aventi:
Beyond management consultant takeovers and networks dipping their toe in the consultant arena, there’s one breed of disruption we’ve not yet seen in communications at scale. And that’s of the tech enabled aggregator. Imagine Airbnb, Uber, E-harmony meets the communications industry. Creative hothouses, digital and production shops, media, analytics & UX specialists will connect to create a mega indie e-shopfront. Victor and Spoils have flirted with the mere edges of this. Imagine a client being able to build their own bespoke agency village at this one stop Etsy-like shop front, to be able to search by ratings and reviews, effectiveness awards, values and category expertise. It’s a virtual pitch consultant able to match start-ups with like-minded creative companies and all kinds of entities with relevant data fields matched for a better fit. A big box network of indies. A new David to take on the Goliaths.
Clemenger Melbourne CEO Nick Garrett:
2018 is going to be the year of getting on with fixing our industry and instilling a sense of optimism that we’ve clearly lost. Our sense of pessimism and lack of confidence is hindering us from thinking and behaving in a pioneering way, and preventing us from making a difference for clients and our businesses. Tough calls need to be made as we work out what parts of the business we want to invest our emotional energy and financial resources into, but if we wait until 2019 to make those decisions, we’ll be too late. What’s important is that we play to our strengths and look for ways to grow in usefulness, not simply looking at defensive strategies to survive. Maile Carnegie summed it up brilliantly this year when she spoke about large parts of our industry becoming the ‘frozen middle’, which isn’t where any of us want to be.
BWM Dentsu MD Alex Carr:
2018 will see a return to balance. A year when the marketing community finally come back to the realisation that martech and ad tech alone are not the be all and end all. A year when a combination of creative, cohesive and unique brand experiences together with data and tech smarts drive more transformative growth for all clients around Australia. I’ll drink to that. Shall I have a gin. Shall I have a tonic. How about a Gin and Tonic? Go figure.
Thinkerbell creative partner Ben Couzens:
I predict that in 2018 fax machines will make a comeback.
VCCP CEO Andrew Holt:
I never like predictions, especially about the future, so my hope is that we continue to rediscover some creative wisdom from the past - that distinction beats USP, that emotion drives action and that being interesting is not optional. As St Francis of Assisi put it; preach the gospel every day, use words if necessary.
AnalogFolk MD Matt Robinson:
In 2018, I think we’ll start to see examples of truly breakthrough brand ideas, delivered in places where brands have traditionally not bothered. The world of UX and CX has been so dominated by words like ‘optimise’, ‘hack’, and even ‘de-frictionalise’ (I made that one up) that we’ve forgotten about the role of creativity. Next year, I think that will be turned on its head and the good marketers will focus on connecting up their brand experiences along the highest value customer journeys and seeing that pay dividends at the receiving end. This means more time, effort and energy on the connections between their brand properties than creating entirely new ones. Yes, this will probably mean that they implement some of the hot tech; AI, Machine Learning, APIs, etc, but it will all be driven by their brand purpose, delivered using their unique voice and will create a more magical experience.
Bashful founder Simon Bookalill:
2018 will see more AI flow through all communications as it gets cheaper and easier to build - I see more chatbots, voice integration and campaigns that use machine learning at heart. I also think we independents will become a rarer breed - as more get swallowed up - it has increasingly become harder for independents to start up as more work is taken in-house and overseas agencies come to the market - a trend that could lead to a homogenisation of perspectives.
Isobar managing director Erik Hallander:
In 2018 we’ll see the shift away from one-size-fits-many creative continue as we embrace our rapidly filling data wells and increasingly have the tools and technology at our fingertips to do something meaningful with it. Not only are we looking at a more effective and efficient year for brands, it’s a less noisy, more interesting and relevant version of the world for consumers.
Clemenger Sydney managing diretcor Emily Perrett:
I can’t tell if this is a prediction or a wish. But as tech levels the playing field and makes all touchpoints equal, we should see more time being invested in smart, long-term strategy and brilliant creative work.
JWT managing director Paul Everson:
Consultancies will move upstream with clients. It will mark the end of agencies having to try and be "jack of all trades" and give them a focus back onto the industry of creativity. The magic of agencies is the one thing a consultancy can't bring. It will push a return to agencies doing what they do well - create genuine human connections with creativity that solves problems
YOLO creative partner Justine Metcalfe:
Brands taking social and political stands on important issues. Consumers are not only expecting the companies they buy from to act responsibly, but to stand up for issues that matter - from fair trade, same sex marriage to racism. It’s time for brands to get off the fence. Governments are apathetic and take too long to affect real change. Voters don’t expect them to make any ‘hard’ decisions. The reality is big business runs the world now and brands all have the opportunity to lead the way. In the coming years, it will be dangerous for brands to remain silent rather than take a stand. Those that do it well will be rewarded with dollars and loyalty.
The Hallway founder Jules Hall:
2018 will be the year that we get to understand the impact of consultancies.
Are they going to create better work and steal market share from agencies?
Or will agencies pivot to better meet their client's needs?
I reckon we'll see a bit of both. And the marketing industry will be better as a result.
I'm looking forward to 2018.
Y&R chief creative officer Paul Nagy:
Brands with one, interesting marketing strategy that works across digital, social, content, creative and media win. Brands with a digital strategy, a content strategy, a creative strategy and a media strategy lose. Storytelling enjoys a huge renaissance. Sharkies win another premiership.
Cummins&Partners CEO Chris Jeffares:
For too many years there has been blind trust in the murky world of media and we all know where that has led us. The excessive scrutiny of creative has led to the smoothing and vanillarisation of ideas through ‘group think’ and it has unfortunately led to substantially less effective work. 2018 will be a better one for truly effective creativity (and Melbourne will again lead Australia in this regard). Hopefully this success will be measured by real sales impact for clients, not frilling-necked trinkets from France.
Leo Burnett Sydney Pete Bosilkovski
Consumer first or die. Companies will need to put the customer at the heart of every business decision. It will be increasingly important for companies to stop obsessing over their competitors and remain focused on getting to know their customers better than their competitors. Business and marketing decisions will need to be driven by customer needs not by business needs. Importantly, this means going beyond products and services to create new value for customers by delivering brand experiences and utility that enhance their lives. For companies looking to create new value, the savvy ones will embrace human-centred service design thinking, they will be willing to change the rules of the game - and will always put the customer first.
M&C Saatchi chief strategy officer Justin Graham:
Brands will start sorting out their trust issues. 84% of millennials do not trust traditional advertising. There is a lot of ground to be made up and social media, our politicians, our cultural leaders aren't helping. In 2018, brands will have a razor sharp focus on the integrity of the channels they're on, the claims they make and the experiences they offer. Trust will again become the key differentiator for brands.
KWP! creative director Corey Swaffer:
In 2017, people have enjoyed more choice than ever before. More choice of products, services, content, channels, mediums, delivery, timeframes and experiences. This is only going to become greater as technology continues to innovate and our choices increase exponentially. The great thing about choice is that you can choose to engage with what you are interested in, or what takes your interest, and you can choose to ignore what doesn’t interest you. Brands need to understand this. They need to understand what their audiences are interested in and then be interesting to those audiences. Online or offline, brands that are interesting will be watched, listened to, engaged with and talked about in 2018.
Chad Mackenzie WhiteGrey ECD:
Clients and agencies becoming genuine partners in creativity through more performance-based remuneration. And hopefully as a result, braver ideas being bought.
VML MD Aden Hepburn
While agencies and consultancies talk about a battle to the death, we’ll see a focus on building more holistic connected consumer experiences and ecosystems for brands that are powered by deeper data and more advanced ad tech platforms to deliver more personalised storytelling and great customer experiences.
Host/Havas chief strategy officer Olly Taylor:
2018 will see a growing backlash against the negative effects of social media. A study of over 5000 students in the UK showed 63% would not care if social media did not exist, citing addiction, online abuse and fake news as the main reasons. In addition to this even more pupils (71%) said they had taken temporary digital detoxes to escape social media. This rising backlash could well impact brands' social strategy and spend.
Ogilvy Sydney ECD Derek Green:
Random little creative award shows that clients don’t value will be in real trouble and probably won’t exist in the coming year. The award shows that will survive are the ones that truly investigate into whether a campaign is truly effective, not just creative.
AJF Partnership co-founder Adam Francis:
Using technology and creativity to its full potential will allow even the oldest of ‘old school’ brands to remain relevant. The true craft of persuasive writing will return. And it’s power will be once again lauded. The barriers to any marketer planning and buying media will continue to fall. Better still, with a continued focus on transparency, effectiveness results across multiple channels should become comparable.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at firstname.lastname@example.org