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Sound the Alarm: Jos Ortega of Havas Media Ortega on the Advertising Industry Then and Now - adobo Magazine Online
Spikes Asia 2025
Words by Jos Ortega
The advertising industry is arguably undergoing one of the most critical stages of its life cycle. We’re working in a world where there are no rules of the game, much like in the days of the wild, wild west. There is a mad race to the center, with all comers from all fronts.
Mad race to the center
The incumbents of the industry, the agency holding companies, are grappling for the right long-term strategies amidst short-term quarterly pressures from its investors. Dentsu continues its buying spree of specialist companies as it aims to provide a full suite of solutions. WPP and Publicis are on consolidation mode, after its major clients slowed down on their spending and showing weak financial results.
The media networks are branching out to digital and production, leveraging their celebrity and program bases.
The telco carriers, with their distinct access to the mobile engagement points, are leveraging their knowledge of the customers. Their natural evolution leads to entertainment and e-commerce.But the biggest potential for the telcos will be the power of the last click to purchase.
And there are the tech companies that continue to dominate the digital media space like Facebook, Google and Amazon.
Change catalysts
Driving this change are the consultancies, whose IT and business transformation projects with the CEOs and the company boards are leading them to customer experience solutions, which was not in their realm of expertise. They are now very aggressive with their business-plus-marketing proposition. As such, Accenture, PwC, Deloitte and IBM are buying specialist digital agencies for UX, design, technology, data and analytics, and customer engagement. Bain made the boldest move so far in its recent acquisition of Asatsu-DK, Japan’s third largest agency.
Client-agency partnerships
A critical component of most business transformation recommendations of the consultancies is digital transformation. Having the inside track, consultancies are jumping the gun on the rest of the industry. Fortunately, the clients still see customer engagement as a different specialist function.
With all these changes, more and more clients are recognizing the need for a truly integrated approach for marketing and communications.This has been the urgent mission of the agency holding companies.
However, there are dynamic client-agency partnerships that are evolving. To one extreme, a leading logistics company is changing its whole I.T. infrastructure and has assigned its marketing functionto an agency partner.To the other extreme, a pharmaceutical company bought a new platform and has taken the digital media functions in-house.P&G, one of the key drivers of change in the industry globally, is creating its own in-house agency, manned by its club agencies.
What does the future look like?
The agency holding companies have the enormous challenge of consolidating their specialist companies into a cohesive group for their clients.The greatest obstacle is how to break down the silos that are individually driven by CEOs, who have revenues directly linked to their bonus. If executed properly, the fully-integrated agency holding companies can compete with all comers from other categories.
Consulting is an arena that must be seriously considered as a core service. Doing this right will flank the consultancies that are threatening in invading the agency space. But will all agencies take this on? Or will they work towards a collaborative model with the consultancies?
Aunique model worth watching is that of Havas. Recently acquired by Vivendi, Havas is now part of an integrated content, media and communications group. Aside from merging the creative and media services into the Havas Village, the agency now has direct access to music, television, film, video games, telecommunications, tickets and video hosting service. This covers the whole media value chain, from talent discovery to the creation, production and distribution of content. And embedded in all these companies are data points that can provide marketers fresh perspectives on their brands and customers.
A reminder to the agencies
Whichever direction the agencies adopt, they must not forget that their point of differentiation versus the others is still Creativity. However, they must intimately embrace technology, data and analytics to survive the new competitive environment.
Intelligent data is the hot commodity today. But one must not get lost in its short-term KPIs orientation. There must still be a voice that reminds all stakeholders of the long-term brand equity. Consultancies will promote business and process. The agencies still own that magical space of emotional relationships, where brands and consumers meet.
About the Author:
Jos Ortega is the CEO of Havas Media Ortega, the Philippine arm of global media network Havas Media. He was also the former CEO of J. Walter Thompson Manila. Prior to his stint at JWT Manila, Ortega co-founded BBDO Guerrero Ortega and was vice-chairman of the agency for six years until he withdrew from the management and operations to concentrate on BrandLab where he is co-founder and chairman. (Photo source: Jos Ortega’s Twitter )
This article was published in the adobo magazine Trends 2018 issue.
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