1. The biggest change barreling towards the ad industry is the shift away from mass communication towards one-to-one communication with consumers. Today, there are more channels than we can count on two hands. The options are more diversified and complex than ever. No longer are we simply considering TV, print, outdoor. Today we must not forget online, mobile, digital in-store...the options are endless.
Advertising now demands that we speak to consumers as individuals. Agencies need to know who they are, how they live and what they think. Advertising and sales are directly linked. Take Amazon, for example, which tracks an individual's purchase behaviors and adjusts advertisements accordingly.
That said, in China we are not yet writing the obituary of traditional mass advertising. China's massive scale and rapid development means it will live on in the mainstream for the next 5 to 10 years, hopefully in harmony with one-to-one marketing.
2. Marketers and agencies need to learn a new trade--how to create and distribute branded entertainment. Sponsoring content is not enough. We must create original work that can be applied across multiple channels. The challenge is how to create content that not only resonates with consumers but also builds brand equity.
Media strategy is also crucial. Marketers often spend 10% of their budget to produce the average TV spot and 90% to blast it across mass media. In the coming years, budgets will look more like those of movie studios--80% for production and 20% on promotion. The stronger the content, the less one needs to spend on publicity.
The key to distribution will be maintaining versatility. The content, in its various forms, will need to be workable on gaming platforms, video sites, mobile phones and more.
3. The convergence of online and offline marketing, the proliferation of mobile phones and the rise of social networking are irreversible movements making media strategy one of the most critical success factors in marketing communications.
Creativity in media deployment and collaborations with media owners will be of utmost importance. The era of pricing and discounts is a thing of the past. Today large media agencies often work independently of ad agencies, leading to shallow understanding and engagement. In the next decade, we may see the return of media planning to the creative agency.
4. Customer Relationship Management (CRM) will be another critical success factor and should be at the core of an agency's operations. Fortunately for us, the internet gives marketers easy, and often free, access to relatively accurate data. Developing a strong CRM capability is a must for obtaining the most relevant information, identifying loyal customers and maintaining close relationships. Your most loyal customers not only improve your profitability in the long run but also give surprisingly valuable suggestions on marketing and communication approaches, and even new product initiatives. This is a group that must be engaged.
5. The best campaigns are those that resonate with people. A short cut to resonance is cultural tension--essentially capturing the issues of the day. Powerful and commercially thriving examples are Dove's "Campaign for Real Beauty" which challenged women to forget unrealistic stereotypes of beauty and to be confident in their own real beauty. Queensland Tourism Board's "Best Job in the World" tapped into the sentiment of increasingly stressful work lives and the importance of work-life balance.
These two campaigns were wildly successful because they touch on issues relevant to real people, affect the world they live in and impact their future. Not surprisingly, they also went viral.
In China we have a fertile breeding ground of social issues that can be tapped into. China's rapid development and changing society means cultural tensions exist everywhere. Campaigns that utilize issues of the day are practically guaranteed to resonate--and are sure to spread virally in China's hyperactive cyberspace. To an ad exec's benefit, such campaigns allow us to be part of something bigger and more meaningful.
6. Learning how to recruit, grow and retain the best and brightest is every agency's biggest challenge in China, where turnover is rampant due to the sheer number of opportunities. To capture the hearts and minds of the best we need more flexible organizational structures and systems.
The "home office" concept that became popular a few years ago has fallen flat as we realize the indispensable nature of interpersonal communication and that technology can't bridge that gap. In the next decade, I believe "personal studios" will become popular. Top planners who have opened their own studios say they love it and enjoy the freedom of only working on clients they're passionate about. I often wonder whether the partnership model of law firms is the right way forward for our industry.
Agencies will need to be more transparent about financials. Clearly, shareholder and employee interests must be better balanced. Big agencies and holding companies will face growing pressure from local agencies that can offer more personalized incentives.
7. Increasingly, advertisers will rethink the higher purpose of their brands and take longer-term views of brand building.
8. Powerful ideas that penetrate several communication channels and seamlessly integrate with various media platforms will be the order of the day.
9. We'll need to figure out how to measure the effectiveness of integrated channel approaches, including digital and traditional media, and how to tie it to agency remuneration.
10. CSR will be defined more broadly. In place of "surface" CSR, like hosting a charity event, companies will refocus their efforts on bigger-picture items such as reducing carbon emissions, choosing raw materials, financial transparency, recycling and the like. China's big state-owned conglomerates will certainly be up to the task and they will need our help.