Global financial crisis re-shaping the Ad Industry - MTI

Speaking at IAA Bahrain Chapter in preparation for the IAA World Congress in Moscow, Hilmy Cader, CEO of MTI Consulting presented a paper on 'Shaping Marcom Strategies - after the Global Financial Crisis'

He said the year 2009 saw the sharpest decline in global advertising since the Great Depression.

Although there are signs of bottoming, Global Ad Spend growth forecasted for 2010 is barely 1%. By contrast, Internet Advertising grew by 10% in 2009 and is expected to experience double digit growth and even overtake print advertising by the end of this decade.

Brands, 'Is the common' equity that both Agencies and Clients commonly manage, and cautioned that global mega brands have continued to lose trust, which is the very essence of what separates a brand from a generic'.

From Tiger Woods to Bernie Madoff, from IPL to the Greek economy, the word has lost trust in brands, which has far reaching implications for how companies shape their Marcom strategies.

He highlighted the direct impact of the global financial crisis on Marcom, specifically how brand premiums have been challenged, and the Clients increasingly looking for focused customer conversion as opposed to conventional, broad brush media solutions.

In terms of Marcom Consequences, Clients will demand more media-neutral solutions, a true 360 degree approach, which in turn means Ad Agencies will need to be geared to adopt a bottom-line driven, more scientific approach to Marcom Mix Selection as opposed to the more conventional and narrower media selection paradigm.

He emphasized that the focus should centre on consumer lifestyle integration and in doing so the 'Marcom Power' of the retailer needs to be factored in.

The growing penetration and consumer affinity of social media must be an integral part of any Marcom Mix selection model.

Cader underscored the growing trend towards 'Pay for Performance', citing the likes of Coke and P&G who have started rewarding Agencies based on results, which means Agencies need to be leaner and agile in terms of variable cost as opposed to being saddled with high fixed costs.

In parting, he said that more and more clients will be singing 'Show me the money' and that agencies will be left with choice of either dancing to the same tune or facing the music!