Marketers on the defensive...

Interesting article in WSJ from last week, it states that there can be a lot learned and gleamed from pursing a lean and acquisitive operating model like Kraft Heinz. Which is to say companies in the consumer goods industry should not be solely focused on using advertising powerhouses like WPP and Omnicom. Investors and shareholder activist or not like to see that companies can boost their profitability without the help of outside ad agencies. Ad agencies are facing digital disruption; Google and Facebook are increasingly dominant if not completely necessary at this point. The article goes on to point out that “virtually all incremental ad spending in the US” was on Google and Facebook. This threatens the core competences of traditional ad agencies. There are still problems with automated advertising; something I mentioned in my previous blog post (regarding YouTube ads popping up in unlikely places). Unilever will cut ad spend by 30% and WPP is one of their top accounts (something mentioned in my previous post). Marketers, your traditional big 5 ad firms, will likely need to consider restructuring talent and money spent to make sense of the changing market and technology. I plan to expand on this concept more completely later this week.