John McGee: 'Ad industry has lost its magic'
Every time I sit back and think about the state of the Irish advertising and marketing industry - and by extension the media industry that depends on it for its survival - I am constantly reminded of the opening lines of A Tale of Two Cities, the epoch-defining historical novel by Charles Dickens set against a backdrop of the impending French Revolution and the subsequent Reign of Terror.
"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way."
Never before has the marketing and advertising industry faced up to so many to so many positives, yet so many negatives; so many opportunities and yet so many disappointments; so much trust and so much distrust; so much belief matched by so much disbelief. If ever there was an industry going through an existential crisis, this may well be it. Depending on your viewpoint, it's either the best and most exciting of times to work in these industries or indeed the most worrying and worst of times.
A quick look at what's going on in our indigenous advertising industry is enough to send some people scurrying into the latter camp.
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A race to the bottom in terms of pricing, bland advertising, a lack of trust between agencies and clients, a disconnect between marketing departments and the boardroom, clients looking for more for less, creeping short-termism, the growing dominance of the digital duopoly, Google and Facebook, and media owners being beaten up on price are just some of the day-to-day features of a market that has become increasingly dysfunctional. Combined, they don't paint a pretty picture.
At a recent breakfast seminar hosted by the Association of Advertisers in Ireland (AAI), media industry veteran Peter McPartlin provided plenty of evidence to suggest the entire Irish advertising market has become dysfunctional and, without corrective action, it could well enter a period of prolonged decline.
Why does any of this matter? As McPartlin noted in his address to a captivated audience, a healthy advertising business is central to the functioning of a rich and varied media market, a thriving business environment and a strong local marketing and communications industry.
"Ireland may be the poster boy of Europe for economic recovery over the last 10 years but we are a horror show when it comes to our performance on advertising investment," he said.
"Less advertising money is being spent in real terms across the Irish industry. Margins have been slashed, while personnel, tech and pitch costs have gone through the roof and many of our indigenous media have been ravaged as half of the money that they used to get is now going elsewhere. As a consequence, there has been a divestment in people, creativity and products, especially by media owners, which is unsettling the audience."
To back up his argument, he used a combination of data gleaned from advertising investment spend and economic data which showed that Irish advertising spend, as a percentage of GDP, has declined from 0.49pc 10 years ago to 0.32pc today, around 40pc. While total ad spend across all media rose by just 6pc in the last decade, in excess of 50pc is now going to digital platforms such as Google and Facebook.
He also pointed out that the decline in real spend is at the heart of why relationships between clients, agencies and the media have become fractured and finger pointing in all directions is now the norm. In addition, a perceived lack of transparency has led to a lack of trust, with relationships between clients and agencies becoming shorter, creativity being undervalued and media owners such as publishers and broadcasters becoming commoditised and undervalued.
"The phrase that one hears constantly throughout the industry is that it is a race to the bottom on pricing. The sector needs to wake up and say that this is not sustainable. If we are to have a healthy Irish media market, a strong local marketing business and a vibrant agency and creative community, then we have a responsibility to look at the choices that we are making now," he says.
A lack of investment and sometimes indifference combined with brands playing safe or engaging in short-termism is also stifling creativity, despite empirical evidence that suggests that good creative advertising is more often than not likely to be effective advertising.
And more effective advertising, as we already know, can clearly demonstrate a return on investment for the advertiser or client.
McPartlin also turned his guns on the industry's obsession with digital platforms and digital advertising.
"A lot of people have become obsessed with digital and get overly excited by the wonderful targeting capabilities and efficiencies that digital promises. But it doesn't matter how great your knowledge is of all the new digital techniques and platforms, if you don't understand the fundamental ways to engage, excite or entertain an audience," he said.
And therein lies one of the biggest challenges for agencies and their clients: their ability to excite and entertain.
"I think much of the advertising being produced at the moment is at best workmanlike and at worst inoffensive, invisible and ineffective," he said. "We seem to have become so focused on the science around advertising that maybe we've forgotten the magic bit."
And of course, he is right. To borrow a famous malapropism from another literary giant, this time Seán O'Casey and Captain Jack Boyle in Juno and the Paycock, the advertising and marketing world may well be going through a "terrible state o' chassis".
Sunday Indo Business