Last week was a huge one for WPP’s Group M buying unit and media shops: MediaCom came up with the winning pitch for the COI account, the biggest UK media pitch to date, while the Mindshare team held on to the Unilever business in the UK (and elsewhere), and Maxus matched its bigger siblings as it picked up BT’s business.
All-in-all, that’s three of the UK’s top advertisers covered in one swoop – and hundreds of millions of pounds in annual billings for Group M. Media owners will, no doubt, be told to sharpen their pencils. So much for the L-shaped recession.
The aggregation of so-much business at a stroke confirms the radical re-shaping of the marketing services sector that has taken place in the past decade. WPP has evolved from a UK-domiciled advertising agency, with JWT and Ogilvy at its head, to a global marketing services business based in Ireland, with media first among equals in an offer that includes research, buying, planning and creative. Put simply, it’s gone from a supermarket basket maker to a global marketing services superstore in two decades.
In the context of the winning COI pitch, this shows how vision, leadership and investment can transform a company’s performance.
There’s much been written about the strength of the UK’s creative industries – film, music, computer gaming, broadcasting, advertising, fashion and production – and how they might lead us out of recession. We have an emerging world-class creative sector, they say, that will replace our historical strengths in manufacturing (remember that?) and financial services (ouch!).
A digital Britain is at the heart of this new opportunity and if we can match some home-grown advantages (like native English speakers and the concentration of global talent in London) with digital infrastructure – either underground or in the clouds, we could take a world lead, just as in previous centuries our investment in manufacturing infrastructure powered the industrial revolution.
It’s a surprise that government isn’t yet grasping this digital opportunity – particularly with an election around the corner. But government and its services are still locked in an analogue world, with bricks and mortar delivery.
Some of that is understandable: we all recognise the benefits of a local doctor’s surgery and a local hospital; but it’s extraordinary how many state services are delivered from giant old-fashioned offices (usually in marginal constituencies) rather than through the web. For example, you can shop online for all your groceries and print out an e-airline ticket but you can’t print out stamps; you can compare the market for car insurance but you can’t print out your tax disc (would Swansea crumble without the DVLA?). And while all of us have spent the past decade honing our understanding of CRM and relationship marketing, government databases can’t even agree on compatible software across the NHS. Government is missing one heck of a transformative opportunity to help us out of our economic hard times.
It’s extraordinary how many state services are delivered from giant old-fashioned offices rather than through the web. You can shop online for your groceries and print out an e-airline ticket but you can’t print out stamps; you can compare the market for car insurance but you can’t print out your tax disc.
In a downturn, private companies cut operating expenses and invest in capital projects. That saves short-term cash and secures long-term market strength. But political spending seems to be the other way around – cutting capital projects and retaining huge day-to-day operating costs (under the “protecting frontline services” moniker). This is nonsense. Someone needs to expose the false premise that there’s a compromise between quality of service and cost of delivery. All of us in the marketing services sector serve clients every day; all of us have cut costs dramatically through the recession without compromising the service we deliver to our clients. Digital change has been one of our critical strategies. This combination of service and delivery is at the heart of the winning pitch proposition for COI.
But government is still lagging on investment in digital infrastructure. Lord Carter’s Digital Britain bill was a start – but it’s making slow progress. Even if the bill is passed before the next election, it is getting lukewarm support for strong copyright protection (which is important for the intellectual property our creative industries produce, such as music); is not explicit on the funding for digital radio infrastructure; and promises only 2Mbps broadband speeds for universal access, with a funding proposal (a £6 tax on landline phones) that looks like it will be kicked into the political long grass. So, more work will need to be done quickly by the next government, whatever its political colour.
Once every home is wired to super fast broadband, just like they are to electricity, then the rapid migration to delivering services digitally can follow. That will bring both the huge cost savings UK plc needs to sew up the latest borrowing requirements and the better delivery of services. Done right this could be truly transformational for both government and our sector across the next decade. Done wrong, or not done at all, and we’ll still be physically collecting our pensions when we’re collecting our pensions.
For the ad sector this is a hugely inclusive opportunity: keypad skills and digital literacy will become as important as the ability to read and write. If the AA became the 4th emergency service in that memorable campaign, what’s the 4th “R” that will put digital literacy alongside reading, writing and arithmetic? A bottle of champagne to the reader with the best suggestion in next month’s column.