The recent demise of venerable agency brands like J Walter Thompson and Young and & Rubicam has sent shivers down the spine of the traditional advertising community worldwide. What is more galling is the fact that they have been swallowed up into a digital-first entity. 

If an agency like JWT that entered India in 1929 that built brands like Air India, introduced, and cultivated Pepsi in India can become subsumed into Wunderman Thompson and then get parceled off with Y&R into VML, something very wrong must have happened somewhere.

The advertising industry’s first mistake was to ignore the rise of digital marketing in all its forms, hoping that the Internet would just go away. That prediction, unfortunately, didn’t pan out quite so well. The next mistake was to shy away from the whole digital business and pass work out to technology ‘suppliers’. A new digital marketing industry was bound to form in this vacuum and now it’s eating the agency’s lunch.

Advertising has long existed in a broadcast-oriented world. Having formed in the inter-bellum years and post the Second World War, some of the terminology and thinking is still rattling about from those years. For example, advertisers still ‘target’ the customer with ‘strategic’ and ‘tactical’ ‘campaigns’. But the verbiage comes with an underlying mentality. As advertising people, we ‘fire’ messages at the consumer in one direction. With digital however, consumers now have the power to fire back.

Today, digital content comes to us in the form of the Web, social media, AI, OTT and DOOH form. That’s just a short list. It’s now on our laptops, our phones, our TVs and soon, it will be talking to us from kiosks in every mall.

Large companies like HUL, M&M, Godrej, Ford, and others in India have already moved their digital and social media business out of their mainline agencies and into the hands of some speedily growing digital agencies. That was fine back when the size of these businesses was small. With social media, OTT and OOH, revenues have grown to substantial sizes. It’s a zero-sum game. What digital takes away is lost to the advertising agency.

Independent agencies have made the most of this. Adding a digital wing to their companies, they have carved out a chunky bit out of the client’s budget. It is a cautionary tale for all independent agencies that refuse to see the writing on the wall.

It’s no good lamenting that digital is replacing the pristine art of brand building. That it is being sullied by these new upstarts. The concepts of branding were predicated on the assumption that an advertising message has to be single minded and targeted with a brand message that the marketing team decided. Digital’s hyper-selectivity allows us to target messages in a precise location and time-centric manner. McDonald’s can message me and my wife two different messages with unique appeals when we are near their restaurant. I might get a message that tells me that the brand is tasty and fun, while telling my wife to give our kid the treat he deserves.

Advertising today cannot be creative-centric or media-centric. They need to be both, in addition to having a firm understanding of technology. 

In India, TV advertising is the biggest beneficiary of advertising budgets. Newspaper and magazine advertising has declined to abysmal levels. Major OTT platforms like Netflix, Amazon and Disney+ have already indicated plans to bring in advertising-based models of their services. When that happens, and it will happen soon, traditional advertising would lose their TV businesses as well. 

On the Web, there is enough free content. The only way advertising will work here is if brand messaging can compete with content. Unless advertisers can entertain the consumer in the way a Tik-Tok video does, or a 3-minute YouTube video can hold their interest, they don’t have a snowball’s chance in hell. 

Make no mistake, digital is all grown up. It’s younger, stronger, more agile and has its claws out.