The year was 1999. It was a regular Wednesday all hands conference meeting at this record label I won’t name to protect the innocent. But it was a big one. One owned by big money. Traded on public markets.
The president of the label tells everyone that we’re getting started and utters something I didn’t think he would say. ‘Ladies and gents, just wanted you all to know we have filed a lawsuit against Napster.’ The room gets noisy. I even hear one person go, ‘Let’s get them’, while another person goes ‘What is Napster?’
‘Look, we cannot compete against tech in this space. So, we are going to do the best thing we can to slow it down and sue it out of existence.’ More chatter ensues. Ultimately, I work up the nerve as a young twentysomething nobody who runs the website and other ‘innovation’ and raise my hand.
‘Yes Geoff?’
‘Is this the right path toward the future? The consumer has spoken. A small niche has already said they don’t want to purchase CDs. They want digital files. Have we given thought that maybe we purchase Napster as our digital distribution arm instead? Give us a leg-up on the competition?’
The room becomes quiet. I hear the sales VP say, ‘You’ll be out of a job with that thinking.’ The president looks at me and just points to the door. I was out of a job with that thinking alright. But so was everybody else.
Fast-forward to today, with the recent news of the Omnicom takeover of IPG and it’s the same scenario, different industry. Consolidation, acquisition, centralisation, technical implementation. All running rampant. The big trying to stay solvent by getting bigger.
There’s just one issue with this: it rarely works unless there is some form of intellectual property to hold it together. And even then…
Processes, efficiencies, pitches — trying to tie all that together gives no value-proposition advantage in an environment that is pivoting to fewer bodies being thrown at problems, and more brain power (human and artificial), along with performance and impact being the new (old?) equation.
I think a lot of this current decision might be mired in the fact that advertising was slow to adapt to what it didn’t perceive as a threat
Data, adtech, platforms. Those were partners, frenemies. No need to fear them. But as the platforms went from open kingdoms to walled gardens, they didn’t need ad agencies to run campaigns with them anymore. Companies could now set up and run direct on these platforms. Generate the creative with gen AI. Create an ad campaign. Programmatically buy audience. Get a report showing how it all performed for the money spent.
Everything could be run end-to-end, with zero need for an advertising agency. No less a big holding company with high fees. The local retail shop could buy media and run an ad campaign the same way as a big Fortune 100 multi-national corporation. And in a world where companies of all shapes and sizes are trying to reduce spending and be more efficient, there isn’t space for agency fees as a growing line item if it all can be done in-house or direct. But the big campaign. Nobody can do that except the big agencies that are part of the big holding companies.
The same excuses I heard in the record industry were now remixed to fit linguistics of the modern era:
‘As a label, we know who to sign and to develop’ became ‘As a holding company, we have all the audience and customer data!’
‘As a label, we still hold all the power of distribution’ translated into ‘As a holding company, we have a network to reach audiences.’
‘As a label, we are the only way to promote an artist and break them’ became code for ‘As a holding company, we are the only ones who can build big brands with big advertising.’
But are you?
As Tom Roach pointed out in a recent op-ed: ‘Big Advertising used to be the epicentre of adland’s creativity, but its dominance in the creative ecosystem is being chipped away by the democratisation of advertising and content creation tools, self-service ad platforms, and brands working directly with platforms and influencers.’
For some reason, everyone at these firms dictating to us about digital transformation, the agency of the future and how AI would change how the advertising industry operates, didn’t listen to their own advice. Or nobody was listening.
So, what happens next?
Many industries that faced digital destruction pivoted into new areas. Artists, who relied on album sales as an incremental revenue stream started to tour more, sell more merch, even sold one-of-a-kind art direct to their fans. They got creative. They had to.
The same will happen here.
New shops will open that won’t go after the traditional accounts. That might be three people with an AI product and a network around the globe to help them make things that aren’t associated with advertising but work like advertising. Work may become more like putting a film together.
Let’s come together to do what we need to do and then, when it’s done, move onto the next thing. They’ll seek the next wave of interesting companies and commerce. As more gets automated, online, events and experiential may have their glory in the sun. We can’t rely on robots to do that type of work. At least not yet.
Connected TV has great promise. And it goes direct. And there aren’t good agencies that work on those types of ads.
Podcasts are in dire need of people who can write native ad copy, or put together audio ads that go direct on Spotify or Apple podcasts that listeners are forced to hear. If you think outside of the box right now, and have a small group of colleagues that can help you set up how to go direct with your solution, you can forecast your future.
We may also have a great pivot as a result of all of this future shock
Many who lost jobs in the music industry pivoted to other areas where those skills became translatable: hospitality, product development, personal growth, experience makers. Heck, one of my closest friends from that industry became a teacher. Another opened a Taekwondo dojo.
Finally, we may have a great bust-up. Regulators don’t like trusts and monopolies, and we may be at that point where it’s time to shatter some of these companies that control a large amount of advertising, which could open different opportunities I’m not thinking about right now.
Big media is fragmenting to indie media. Those outlets could use some brand sponsors. Again, as the big zig, the indies will zag.
Digital sobriety seems to be on the horizon as well. While there is a vocal number of people extremely online talking about how wonderful (more like how terrible) everything is, people may tire of all the noise and try to find other outlets. Anyone who says, ‘They are too powerful and will remain that way forever’, probably never heard of AOL, MySpace, or is not paying attention to what’s happening presently to X.
Life ebbs and flows, things come and go; empires are built and empires fall.
But as creative people we will figure it out. Even if it means we get kicked out of the conference room for a bit.
Featured image: Drew Beamer / Unsplash