The rise of consultancies and peak purpose: Marketing moments of the decade, part III

From the rise of consultancies to Unilever’s $1bn acquisition of Dollar Shave Club and Pepsi’s attempt to derail purpose, here is the final installment of Marketing Week’s moments of the decade.

2016 – Unilever acquires Dollar Shave Club

Unilever’s $1bn (£760m) acquisition of men’s grooming startup Dollar Shave Club in July 2016 caused a stir across the industry.

It was the FMCG giant’s attempt to challenge Gillette’s dominance of the US personal care market, but the acquisition didn’t only signify a play for rival Procter & Gamble’s (P&G) business – it signified direct-to-consumer brands (DTC) were going mainstream.

Dollar Shave Club was founded in 2012 and had claimed a 54% share of the US online shaving market by the time it was bought by Unilever. This was thanks largely to viral marketing, including a YouTube video boasting that its razors were “f***ing great” .

The brand delivered razors, alongside other male grooming products, monthly to its subscribers. It showed how a direct selling model could garner support, especially among younger men, and highlighted a shift of power away from market leader Gillette. Analysts noted that consumers were prepared to do things differently and could be swayed by new models of buying.

Unilever’s acquisition of Dollar Shave Club showed that FMCG was prepared to embrace new cultures and innovation styles. Prior to this disruptors had been seen as separate to the traditional marketing giants.

After acquisition the industry began to do things differently. Over the past three years there has been a notable change in the way FMCG works, with brands like Coca-Cola and PepsiCo all adopting the fail-fast mentalities favoured by disruptors.

Unilever’s acquisition of Dollar Shave Club showed that FMCG was prepared to embrace new cultures and innovation styles.

Some have even set up disruptor-style startups to sit within the company in order to foster the mindset that has made Dollar Shave Club and fellow DTC brands like Glossier and Harry’s such a success. Even Nike set up its own ‘direct to consumer offense’ to create a faster pipeline through which to serve consumers.

The past three years have also seen a marked difference in how Unilever and others have handled culture and innovation. The fast-paced marketers of today now think in social media seconds and believe in the value of a viral video, as well as the importance of TV.

Dollar Shave Club was the first disruptor to go mainstream and showed the industry that streamlined ways of working favoured by startups could be adopted by multinational corporations. MF

2016 – Accenture buys Karmarama

Accenture The big consultancies had for some time been trying to make inroads into the marketing industry. In some areas they had been very successful. Accenture Interactive, IBM iX and Capgemini Invent all make the top five digital agencies in 2019, according to Econsultancy.

It was, however, their move into the creative sphere of marketing that sent shockwaves through the industry. Accenture in particular had been (not so quietly) buying up agencies that offered creative expertise. It kicked off with design agency Fjord in May 2013, followed by digital agency Reactive media in February 2015 and Japanese digital agency IMJ in July 2016.

However, it was Accenture’s acquisition in November 2016 of Karmarama that signalled just how serious the company was about taking on creative agencies. At the time, Karmarama was the third largest independent agency in the UK with a roster of clients including the BBC, Just Eat and Unilever. Its then CEO Ben Bilboul called the deal a “game-changing moment” and he wasn’t wrong.

Panic set in at agencies as they realised that consultancies, which already had the ear of the CEO, might also now have sway with the CMO. Hundreds of think pieces were written about the disaster of seeing Deloitte, PwC and Accenture at Cannes Lions, wining and dining potential clients.

The fear that the consultancies might end up on client pitch lists has not materialised, they cannot beat the likes of BBH, Engine or adam&eveDDB at that game. But they are gaining a foothold by dazzling marketing bosses with solutions that go beyond advertising – offering services in everything from strategy to data analytics and team structure.

Panic set in at agencies as they realised that consultancies, which already had the ear of the CEO, might also now have sway with the CMO.

The ability to add creative services on top of this makes the proposition a tempting one for clients. RBS, for example, has been working with Accenture Interactive on the launch of its mobile bank Bó – with Fjord offering design services and Karmarama advertising.

The rise of the consultancies reflects how brand building is changing. While advertising and media spend remain important, areas such as customer experience, insight and data are rising up the agenda. This has been precipitated by the rise of disruptors such as Amazon, Uber and Airbnb, which have built their brands through a focus on seamless user experiences and convenience.

All this has happened as the agency holding companies faced new challenges to their business models. Economic and political uncertainty and slow global growth have forced many marketers to rethink their relationships with agencies. Many are doing more work in-house and cutting back in areas such as agency fees.

The shift has prompted a strategy rethink across these groups. WPP, which saw its founder and CEO Sir Martin Sorrell quit in April 2018 ahead of findings into a personal misconduct hearing, exemplifies the problems: a hugely unwieldy structure that too often complicates, rather than simplifies, the job of marketers.

WPP is now facing the third straight year of revenue decline and it is not the only one struggling. Publicis’s most recent third quarter report shows revenues down 2.7% year on year, taking both it and WPP’s share price down with it.

In the face of brands struggling for growth, economic uncertainty, in-housing and the rise of digital media encouraging marketers to do direct deals with the platforms, as well as increased competition from consultancies, the agency holding groups are having to rethink their business models. Those that do – that can work out how to marry creativity with business analytics – will win out. SV

2017 – Purpose goes mainstream, but not without growing pains

Pepsi“Maximum growth and high ideals are not incompatible. They’re inseparable”. The opening paragraph of Jim Stengel’s 2011 book Grow, which sought to lay out the argument that companies with ideals at their heart outperform the wider market by a huge margin.

The book heralded a movement building within business around the concept of brand purpose and the notion of the triple-bottom line, whereby companies focus on social and environmental concerns in the same way they focus on profits.

This thinking would go on define the decade in marketing, spurred on by early trailblazers such as Unilever and its stable of purpose-fuelled brands such as Ben & Jerry’s and Dove’s ‘Real Beauty’ campaign.

Not to be outdone, in 2014 Proctor & Gamble launched the ‘Like A Girl’ campaign for its Always brand, aimed at challenging outdated gender stereotypes and empowering women worldwide.

Where the FMCG giants blazed a trail others followed, with companies from Microsoft to children’s food company Ella’s Kitchen all considering their role within wider society and seeking to define their purpose.

However, as the purpose movement continued to build real momentum it hit a significant bump in the road.

Enter Pepsi. In 2017 the drinks company went live with its now notorious Kendall Jenner advert, which showed the US model defusing tension between police and protesters by giving an officer a can of Pepsi.

Created by Pepsi’s in-house agency, the advert was savaged on social media for belittling the Black Lives Matter movement, forcing the company to defend itself against allegations it had co-opted a global protest movement in order to sell fizzy drinks. The ad was pulled within three days.

The furore over the Pepsi campaign made the foundation of the Unstereotype Alliance two months later even more significant.

Created by Pepsi’s in-house agency, the advert was savaged on social media for belittling the Black Lives Matter movement,

Convened by UN Women and supported by the world’s biggest advertisers including Google, Mars and Unilever, the Unstereotype Alliance was founded to eradicate harmful gender-based stereotypes in all media and advertising content.

Recognising that real change could only come if brands joined forces, the alliance committed to refrain from objectifying people, portray progressive and multi-dimensional personalities, and depict people as empowered actors.

Yet despite its current popularity purpose does continue to divide opinion and brands have come under fire amid accusations of “woke-washing”. Gillette considered pulling its #MeToo inspired campaign ‘The Best Men Can Be’ in January 2019 after a negative backlash. The advert called on men to stop objectifying women and bullying people, featuring creative from some of Gillett’s own old ads.

Backlash aside, within a week the ad had generated 110 million views and 18 billion media impressions. By June some 65% of consumers said they were more likely to purchase Gillette.

At Unilever CEO Alan Jope has described purpose as the core concept underpinning the entire business. Last year alone Unilever’s 28 Sustainable Living Brands – those taking action to support positive change for people and the planet – grew 69% faster than the rest of our business and delivered 75% of overall growth.

Far from reaching peak purpose, the movement looks set to build still further in the decade to come. CR

2017 – Brand safety and The Times investigation

YouTubeIt’s unlikely Google will look back on the spring of 2017 with any affection. Even for a company used to negative headlines, being rounded on by Government and the advertisers driving its revenues in the same week must have been – to put it mildly – challenging.

It began in February 2017 with a The Times investigation that found ads for the likes of Waitrose, Marie Curie and Mercedes-Benz were unwittingly appearing on hate sites and next to YouTube videos created by supporters of terrorist groups, jihadists, white supremacists and other nefarious entities. The likes of Mars, Adidas and HP suspended their YouTube advertising.

Then a second investigation in March found ads by Government bodies sitting next to content they really shouldn’t. As if the wrath of the private sector wasn’t enough, YouTube-owner Google was duly ordered to Whitehall to account for its action, or indeed inaction.

In the space of a few short weeks, the failings of digital media trading had had been laid bare to marketers, ministers and the CEOs of those companies being asked by investors why their ads were appearing alongside terrorist content.

All demanded action of Google, and in subsequent cases Facebook and Twitter. The ad tech fuelled ecosystem was an uncontrollable wild west that needed policing, all agreed.

As big a splash as brand safety had made in March 2017, wider disquiet over the lack of transparency and control in the ecosystem had surfaced earlier in the year.

For marketers, being summoned to the CEO’s office to explain why the ads they had signed off were making headlines for the wrong reasons was a wake up call.

Brand safety aside, Procter & Gamble’s (P&G) chief brand officer Marc Pritchard caused a huge stir in January 2017 when he attacked the “murky” supply chain and demanded everyone that was now making a healthy margin on digital media to make it safe, transparent and free of fraud, or wave goodbye to world’s biggest advertiser’s dollars.

Marketing Week columnist Mark Ritson called it “the biggest marketing speech in 20 years”. Publicly and privately other large scale multinational advertisers followed suit and made their own demands. Trade bodies, such as ISBA in the UK and the WFA globally, applied their own pressure.

The first quarter of 2017 had been sobering for all stakeholders. Google and Facebook were forced to change processes, while other platforms and vendors found transparency and safety their point of difference.

For marketers too, being summoned to the CEO’s office to explain why the ads they had signed off were making headlines for the wrong reasons was a wake up call.

As much as they were able to occupy the high ground, pointing fingers at the digital duopoly and esoterically named vendors, the events forced them to look at their own attitudes.

Blinded by the promise of low price, at scale campaigns, not enough honest questions had been asked by brands of how programmatic and other tools worked, what the drawbacks were and what controls were in place. Or, indeed, of partners about fraud and viewability. This began to change in the wake of interventions by The Times and Pritchard.

The chances of brands being inadvertently linked with questionable content has not disappeared, nor as ad fraud. We are still far from uniform metrics and meaningful viewability standards. The events of the first quarter of 2017 did, however, forced all stakeholders to have a long look at themselves. RP

2018 – The introduction of GDPR

Data GDPR If there is one thing most in marketing would rally around if asked what was the most important change of the decade, it would be the significance of data.

Data has driven the biggest supposed advancements in the 2010s. Customer experience, microtargeting and personalisation are all products of the abundance of available first and second party data.

It has led to the creation of an entire ecosystem of adtech and martech vendors offering silver bullet solutions to the challenge of managing and manipulating the plethora of data, and a giddiness among marketers over hitherto untold possibilities and riches. It has also widened the gap in trust between advertisers and the public.

Furthering the opportunity and mitigating the threat was essentially the dual objective of the European Union’s General Data Protection Regulation (GDPR).

In harmonising data protection laws across 27 member states, the EU intended to free business while protecting consumers from the corporate world’s worst excesses.

GDPR was initially met with derision. Industry associations cried foul. The requirement for companies to seek explicit consent to use prospective and existing customer data and the restrictions on the hovering up of behavioural data, were met with ire. Data driven digital marketing was in danger, was the reaction of many.

Despite initial predictions of Armageddon GDPR has succeeded in its initial intent, protecting the interest of consumers

As with all interventions, subjects respond first with anger, followed by a period of reflection, acceptance and finally positive action.

Despite years of warning and guidance, brands spent the year before GDPR became law in May 2018 in a rush to the finish, bombarding customers with re-consent and privacy notices to the point where awareness of GDPR reached critical mass.

If my mother is a barometer of cut through, use of data had punctured the populace. “Why am I being asked if brand X can continue to use my information. I wasn’t aware they were”, to paraphrase a question she asked.

The rush towards GDPR compliance wasn’t the only thing to bring data capture to the attention of the British public in the spring of 2018.

A series of investigations by The Guardian unveiled how Facebook had given third parties access to its users’ data. The most notable, and notorious, of these was Cambridge Analytica, which was found to have lent this data to the Brexit supporting Leave campaign and the Trump election campaign in 2016.

The backlash against Facebook was immediate, vociferous and predictable. The very public illustration of how personal data is used by organisations was significant. As Mark Ritson said at the time: “The real eruption of consumer anger taking place around Cambridge Analytica is not to do with how the company accessed data from Facebook but that a) such things are even possible, b) they are impacting how people are targeted by marketing and c) it apparently works.”

GDPR has not proven as burdensome to business as was predicted. Despite initial predictions of Armageddon it has succeeded in its initial intent, protecting the interest of consumers who now have greater awareness of the value of their data to brands, while forcing companies to accept the need to do better in the capture, extraction and management of that data. It’s a contract that should benefit all.

The Cambridge Analytica scandal certainly forced Facebook’s hand. If not to duck out of political advertising, then to tighten privacy processes. It also served as a wake up call to consumers that relevance was possible, but at a cost, and to brands that privacy was as important as personalisation. RP