$46.8B Record U.S. agency revenue in 2015
Advertising agencies' annual industry meeting is called "Transformation," but most fundamentals of the business remain the same as ever, American Express CMO John Hayes said in the meeting's first presentation Monday.
Agencies are still about creating demand, he said. "Nothing more, nothing less." Clients continue to be demanding, unappreciative and nomadic. And inspiring growth still depends on creativity and interpreting societal trends.
But in that last area, the value of interpretation, Mr. Hayes said there has been one important change: Agencies and brands have lost sight of it.
Interpretation is about turning societal changes into insights and turning those insights into campaigns, according to Mr. Hayes. "There is no greater barometer of success," he said.
Current societal shifts that marketers and agencies should pay close heed to include the decline of marriage, the increase of same-sex families, the decrease of divorce among more affluent consumers and the increase of interracial couples, Mr. Hayes said. "The traditional family structure has changed at an astonishing rate," he said.
Agencies and marketers need to ask themselves whether they are adapting their thinking at the same rate that the world is changing, he said. Agencies should ask themselves whether they are interpreting these shifts into campaigns that are growing client business.
Although these changes are occurring as technology grows aggressively and highly visibly, "technology is not the real issue," Mr. Hayes told attendees. He predicted that the internet might prove to be one of the greatest societal equalizers, but the real driver of societal change is society itself.
The "sharing economy," where marketers like Zipcar saw a trend and offered a service based on it, is one example. American Express' Small Business Saturday initiative was another, he said.
Wielding market research showing that 93% of consumers agreed it was important to support small businesses in their communities, American Express decided to create an event with that goal between Black Friday and Cyber Monday. In 2012, consumers spent $5.5 billion on small businesses on Small Business Saturday, and in 2013, he said that 75% of consumers knew what Small Business Saturday was.
"We could not do these things without our agency partners," Mr. Hayes told attendees. "You have a very bright future, as long as you're willing to have curiosity to understand what's going on in our world" -- and the ability to interpret that understanding for clients' benefit.