By David Berry: The advertising industry is in the midst of perhaps its greatest squall of major changes since, well, ever. Digital media ad revenue has finally overtaken TV in the global ad spending fight, something that seemed unprecedented when that type of spend was first tracked back in 2004. Snapchat, social media's "next big thing" debuted to a first-day IPO spike of 44% in March, only to tank - it now trades at just $15.21 per share. And the Agency of Record model is dead or dying, depending on whom you ask.
That's today. So, what will the next five years bring? No one can say for sure, but hey, isn't that half the fun of playing this game? Here's my take:
1. Facebook will surpass Google in advertising revenue. The rumors of Facebook's demise, or lack of connection with younger audiences, has been grossly exaggerated. Ad revenue for the platform grew by 41 percent when comparing Q2 2016 to Q2 2017, and if that's not enough, Facebook owns Snapchat-killer, Instagram, as well as WhatsApp. Here's the thing - Google remains primarily a contextual tool, though admittedly, the ultimate 'pull' method in advertising (whether through search or display or some other method). But that's never been the source advertising's magic. Where Google is a master of one trade, Facebook and its properties are a master of several. And they're still just scratching the surface.
2. The agency of record model won't die-off. Don't get me wrong, the all-you-can-eat deals of advertising contracts that carried into the first decade of the 2000s are changing. Project-based work is on an uptick and it has given rise to hard-hitting small shops, like Eleven in San Francisco. But the un-clustering of AOR work will turn out to be a warning shot more than anything; a lesson to not take big client budgets for granted, and instead prove out your value and stop working just hard enough to furnish your agency game room. If the big shops can do that, AOR deals won't be going away; they'll be coming back.
3. Agencies will get back to basics. Can we be honest? As ad tech has gotten better. creative has gotten worse. And weirder (see below). Not only that, but the best creative work has essentially become agency masturbation for award seasons, and less about fundamental brand building. Talking to you, 84 Lumber. As agencies feel the pinch from tightening budgets and outside threats, they'll have no choice but to get back to basics - or be shown the door.
4. Employees will finally enjoy work/life balance. Okay, maybe this one is a little too ambitious. But here's the thing - young talent is hard to retain, and more times than not, agencies just don't get it. Execs and HR departments make blanket assumptions about millennials, pack their offices with bean bag chairs and 80s arcade games, and get ditched anyway. If the average age of your workforce is 25, that's not a sign of youth and innovation - it's an indictment of your inability to grow and keep talent. For starters, maybe they'll finally let more employees work from home. Or anywhere, for that matter. The agencies that really listen might just change the game for the rest. But we'll see...
5. Ad tech will get worse before it gets better. Programmatic buying was supposed to change advertising; make it faster, smarter and automated. Well, it's only raised questions, and with it, questions about ad tech in general. YouTube faced boycotts for its inability to guarantee appropriate delivery, and P&G famously ditched $140MM in digital spend, in part, because its partners couldn't verify that actual people were seeing their ads, and not bots. They increased sales anyway. The pressure is on - and ad tech companies are going to have to work just as hard to validate their efforts as they will to sell them.
Got any predictions of your own? Leave them in the comments!