"Smile More", the Industry Discusses Perpetual Disruption at 4A's Decisions 2023

The past three years of the industry have changed nearly every aspect of how work gets done. From remote and Zoom meetings to the evolution of programmatic, and the integration of values-based media planning/investment such as DE&I inputs and sustainability, the agency world and workflow is likely second, in terms of disruption, to the retail sector. That has created huge cultural challenges which agencies are still trying to work through. As Horizon Media's founder and CEO Bill Koenigsberg pointed out in a panel. "I'm looking out at the audience and there's only one person smiling. We are at the most exciting time in our industry. Yes, it's daunting, but bringing enjoyment back into what we do is a really healthy drug. We try to celebrate every day. And we tell our people to smile!"

The opening keynote delivered by investment banker and 'cut and paste' expert Terence Kawaja of the Lumascape Kawajas (aka CEO of LUMA Partners), was an illuminating tour de force around the media landscape. Coming from a perspective of, "I don't care" as a (relative) outsider to the agency side, Kawaja gave his assessment of the business, expressing his love of creativity, storytelling and marketing, but hedging that with "I want to do what you do, but get paid like what I do". Kawaja subsequently pointed out that although the industry has become far more complex, "complexity is your friend. It's an opportunity." when it comes to adding value to clients. After somewhat stating the obvious, that agency multiples currently "suck", he advocated that agencies evolve into the role of strategy and system integrators which has a much higher multiple valuation. In truth, agencies have been moving in that direction for many years, but, as a panel later in the day pointed out, convincing current clients to rethink the agency role and compensation remains a barrier.

The day continued with The Agency CEO Forum: 2023 Forecast panel which touched upon a plethora of top of mind aspects to the industry such as AI, talent retention, supplier diversity, diversity in the C-Suite and industry education. Moderated by 4A's CEO Marla Kaplowitz, the panel included industry luminaries Horizon CEO Bill Koenigsberg, GroupM's Chief Investment Officer Matt Sweeney, Global CEO Mediabrands Eileen Kiernan.

Kaplowitz opened the session focusing on talent and asking about the rebalance of the last few years given the ups and downs around hiring and the redefined relationships between employees and employers. According to Kiernan the industry has come out better for it. She pointed out that with the past decade focusing on the minutiae of data, analytics, programmatic and the "workload and workflow" focused on the "brawn" of the job, but minimized the "brain", the creativity and strategic thinking. "I think the reckoning that we've had over the past 18 months has reinforced what we have always known, that clients buy the people, the brains, the partners. We have to make sure that we find that balance that makes the tasks and roles and the contributions of our people valuable, joyful and strategic."

Sweeney added that a former mentor of his gave him the following advice, "Work in a dynamic industry where there is a lot of change and opportunity to grow. Work with good people that you like and trust. And finally go to a place where you will be valued." Sweeney readily admits that there are plenty of other industries where compensation is higher, but "if you work with good people, you are valued and your voice is heard, it's a pretty good gig."

Kaplowitz also addressed the question of whether after focusing intensely over the past couple of years on diversity, equity and inclusion has that topic waned given new financial pressures that agencies have had to address moving to the top priority. Sweeney was adamant that it hadn't. "We have a responsible investment framework that with five pillars and DE&I is at the center of those pillars." Sweeney admitted that they had made a mistake back in 2020, when GroupM established a New Majority initiative around the release of the U.S. Census to prepare marketers to engage with a far more diverse country, by not including a Minority Inclusive Investment element of that initiative, which they did introduce in 2021. Koenigsberg interjected that in the past many minority-owned companies didn't get the buys because they didn't meet the parameters of much larger, well-funded companies, but he continued, "at this particular point of time, they can't and shouldn't be held to those standards. But you still have to figure out ways that those buys are making impacts on your clients' business.".

Koenigsberg said that while he believes that the industry has done a much better job at inclusion and diversity in hiring at the entry-level, "It's a little bit sad. I look around this room and see that we still need to do a better job at moving them along in their careers to higher levels of the pyramid".

Additional key quotes during 4A's Decisions 2023

• "Web3 is a scam. It's all bullshit" - Terence Kawaja, Luma Partners
• "I think it's hubris when people say that they are going to be the next Nielsen. Who wants another Nielsen? You have that. You don't need another one. You'll have different types of KPIs for different campaigns, and you'll transact on that if you want. It puts agencies in a greater value-add role for brands that don't have time or capability to do it themselves." Kevin Krim, CEO EDO, Inc., an outcomes based company that recently announced a large deal with The Walt Disney Company
• "Elevating strategic thinking needs to be the end goal, and how AI is used as a tool to elevate that is where we want to go. Technology is a great tool for marketing, maybe too great of a tool. We will wonder what the boundaries of ethical persuasion are. Sooner or later we will have to have a reckoning as an industry." - Scott Hagedorn, Chief Solutions Architect, Publicis Groupe
• "The painful thing that we're all going to have to accept, because there's a generation of us that have grown up on it, is that addressable advertising will eventually go away. I know that's uncomfortable, and no one wants to talk about it. Every addressable based solution can go away, either by regulation, by unilateral decision, or by some sort of technical innovation that eradicates it." - Joshua Lowcock, Global Chief Media Officer, UM Worldwide

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