Every hero needs a villain. The Association of National Advertisers has made it clear with a new manifesto that, for CMOs, the enemy is the ongoing lack of sales growth. Coupled with rising marketing spending, the industry is looking at a clear and present danger.
Revenue growth is the mother of all issues, one that the entire industry must unite to solve. The CMO community is on board. Now it's critical that agency leaders, who are convening next week for the annual 4A's conference, follow suit. The same can be said for publishers, platforms and ad-tech companies.
Earlier this month at its annual Media Conference, the ANA formally threw down the gauntlet with a blistering 1,300-word manifesto that's a must-read. The document, the ANA says, has the input of thousands of CMOs, the blessing of the ANA's board of directors and its chairman, P&G Chief Brand Officer Marc Pritchard.
With the new Leadership Agenda, the ANA is pushing CMOs to lead around four strategic platforms to, it says, "take our industry back" from "experts." It covers organization growth, the digital media supply chain, social responsibility, industry advocacy and a number of underlying issues.
Notably, the ANA estimates that despite an astounding $200-plus billion in advertising spending and $1 trillion in marketing spending last year, total U.S. sales declined 7.3% to $14.5 trillion. This is the second straight year sales dropped even though investments climbed. Further, only 40 cents of every digital advertising dollar on average ever reaches the consumer. The ANA is now targeting 70%.
Management guru Peter Drucker once said that "marketing and innovation produce results; all the rest are costs." Now marketing is at risk of being viewed as nothing more than a sunk cost center rather than a revenue creator. This is not sustainable and so now the trade association is encouraging CMOs to act. But they need the entire ecosystem to join in for it to truly stick.
The ANA's CMO agenda is not propaganda. It seems to have teeth and the full attention of major marketers. Hopefully it's a common enemy that agencies, brands, publishers, platforms and everyone in between can also rally around. Any major outliers could derail it.
Still, while the challenge is simple to define, it's complex to solve. And it will be scary for some. So frightening, in fact, that the topic could be tabled indefinitely. Or, worse, simply dismissed as bluster. That would be a mistake.
Whether or not apathy sets in remains to be seen. The industry for so many years has put far greater emphasis on creativity over accountability. Such habit loops can be hard to break.
However, if the ANA sticks to this agenda the way it seems they will, it should create opportunities for those who lead and pain for others who don't.
In the short term, this initiative will accelerate greater transparency in the media buying supply chain. This is conceptually an easily place to reduce costs and boost growth. Many media contracts, for example, have not been updated in years, the ANA said. This may result in new terms that not everyone will love or embrace.
In addition, the manifesto will also speed new metrics. These will be set and enforced by aggressive audits conducted by the Media Ratings Council. Not all platforms are on board yet. Facebook and Google have agreed to audits, but others like Twitter, Snapchat and Pinterest remain on the sidelines.
However, most of all, this new agenda will shine a bright light deep into the ecosystem. It will discern those companies that are simply adding friction and costs from those that are removing it, and reward the latter accordingly. This is healthy -- but it could force some agencies to revisit their services or even their business models.
The CMO train is moving. Everyone it seems, needs to get on it or get under it.