Horse’s Mouth

As the chief executive of one of the biggest media agencies in the country and as chair of the Commercial Communications Council, PHD’S Louise Bond is at the forefront of all the major issues facing media agencies in 2017. And at time when marketers are t

Louise Bond.

On the biggest issue facing media

There are multiple ways you could approach this question, but I’ll focus on one thing in particular. We all know that what we do is becoming more and more complex every day. As a consequence of that, the resource and talent we’ll need is going to be quite different in the future. Everyone’s talking about tech, data and marketing sciences … and these disciplines will become core competencies. They’re no longer nice things to have around the outside. They’re now core to agencies. What’s really hard about that is that we are a service industry and that whole kind of client ethos that many of us who have been in the industry get and understand isn’t as familiar to the sophisticated specialist group of people who haven’t come out of that environment.

On strategic objectivity

The strategy capability that sits over everything in terms of understanding a business problem is becoming really important. If you ask a social specialist what the answer is, they’re going to say social; if you ask an SEM specialist, they’re going to say SEM. So you need that broader smart strategy along with having strong digital and tech capabilities.

On kickbacks and rebates

We need to keep an eye on it. Without a doubt, there have been scandals globally, but we’ve never had one locally. However, agencies and marketers need to have good business practice, due diligence, be asking the right questions and having the right level of transparency in regard to how agencies are being paid. It’s important to find out what costs there are within the media supply chain. There’s a responsibility from the media agency perspective to be transparent about how they make money, but increasingly, marketers also need to be well educated in terms of where the hidden costs lie.

On the complicated media supply chain

I think agencies can play a role in the education process. If you think about something like the media supply chain in digital or programmatic, marketers need to understand that there are tech costs along the way. They’re perfectly legitimate costs, but the clients should know what happens to every dollar they put in before the ad is even served. Agencies have an obligation to talk to clients about these things, and clients need to engage in these discussions.

On ensuring greater transparency

All marketers should have good visibility about how their money is being spent. I think the transparency question is perfectly reasonable, but it is happening across all sorts of areas. Digital metrics, research methodology, social listening tools, attribution modelling, the list goes on. When you talk about transparency at a media agency level, it can touch on a lot of stuff. That’s where it gets quite complex and it again really comes down to that education piece. Getting into the methodology behind research can sometimes be quite a specialist area. I firmly believe education of clients is really important.

On clients taking greater ownership

One thing that’s increasingly happening in the agency space is that the technology is actually set up in the client name, as opposed to the agency name. The benefit of that from a client perspective is that it ensures the client owns the infrastructure and has greater visibility. In theory, there should be the same visibility if it’s set up on the agency side, but it changes the mindset a bit. More often than not, the technology still sits with the agency because they’re the custodians of actually running it. But I think the principle lends itself to better transparency and better due diligence of the relationship. When we first got into the digital space, we didn’t even think about things like that. Nobody thought about what it meant if, down the track, a client wanted to take something in-house if it was all tangled up in a single account with an agency. Now, clients are thinking about technology infrastructure and what sits where. We’re all just becoming more sophisticated and clearer about what good practice looks like.

On questionable digital metrics

There has been a lot of press dedicated to this. There have been areas, particularly related to Facebook, where we’ve seen a lot of misunderstanding around the metrics presented. I think agencies and clients need to become better at understanding what the metrics actually say. What are you looking at? How does it relate to that other piece of data that I have over here? More often than not, there are multiple bits of metrics that you are actually looking at. And if you do happen to spot an inconsistency between two sources of data, then you need to ask why. I don’t think it’s a question of whether we can trust the metrics or not, but I think there is potentially misinformation and there has been some misrepresentation. We have to put processes in place, so that we can trust the metrics. From our perspective, all our digital metrics are third-party verified via Moat or Integral Ad Science or another third-party auditor. That’s the same due diligence we use for all other media, and it will just become best practice for digital.

On measuring the right thing

There’s a difference between proxy metrics [such as likes, views or shares] and business metrics. At the end of the day, everything needs to line up with the business metrics. I’m not saying that some proxy metrics aren’t valuable – of course they are – but we have to ladder any metrics we use up to a business outcome.

On Facebook and Google giving auditors a peek

As a consequence of the broader conversation [on digital transparency], the likes of Facebook and Google have realised the importance of ensuring that their metrics can stand up to scrutiny. They’re becoming more collaborative with the thirdparty auditors, and they’re opening themselves up slightly more for better depth of verification to be done. Facebook is now starting to work with Nielsen. Those things have happened as a consequence of the conversations we’ve been having [in the industry]. Once again, it’s going to lead to better business practices.

On walled gardens

I think it’s unlikely they’ll come down. If you look at Facebook, it’s a tech company more so than a social media company. And Google’s depth of capability and offering to the market is so huge and diverse now that media is only a small part of what they do. Regardless of whether it’s right or wrong, they have a huge amount of user data that has to be managed properly. They are the custodians of this [information], and as a consequence, I don’t think those walled gardens are going to come down anytime soon.

On Facebook and Google losing their sheen

Without a doubt, Google and Facebook are going to continue to be very important. It comes back to the diversity of their businesses. They’ve got very clear differentiating propositions in market and they’re tech companies. That said, the industry at large and marketers recognise what the role of channels are, and that Facebook and Google don’t answer every question. I think we will see a much better balance of the role other channels have to play in the broader communications mix. Television is a prime example of having suffered quite a lot for not being new and shiny. The reality is mass-reach TV remains a very powerful medium. Don’t you think it’s interesting that globally, all the major tech companies advertise on TV? We’re heading towards an environment where we won’t leap to the newest shiniest thing just because it’s new and shiny. I’m not saying we shouldn’t use these things, because if they’re right for the problem we’re solving, then we definitely should. But there should be a bit more of a balance.

On younger staff being overworked

Lots of categories work hard, but I think the distinguishing thing about media is that it’s quite fast paced. Sometimes we might get annual briefs where we have six weeks to plan, but more often than not that’s not the reality of the business world and client challenges. It’s a constant speed, and it suits a certain type of personality. That said, the way we work in advertising is evolving a bit. Here at PHD, for instance, we have a wellness programme which we didn’t do ten years ago. Another example of this would be the introduction of a mindfulness programme. It’s not for everyone. Whether people adhere to it is up to them. But it’s important to create that framework. We’re also re-introducing our email policy that encourages staff not to email after 6.30pm unless it’s absolutely urgent. When we launched it 18 months ago, it was so well received. But then we all slipped into business pitches and forgot. Now, we’ve decided to reintroduce it. It’s just about trying to create those boundaries for people. Businesses and agencies have a responsibility for setting up a framework that allows people to switch off. In any industry, people have to be able to have some downtime. If a client comes to us at 5.30pm on a Friday afternoon and tells us that they need something in market by Monday morning, then we have to do it because we’re in the service industry. But that should be the exception.

On the younger generation driving change

When I joined the industry, I was meek, quiet and polite. But now you have a generation coming in that has a much stronger voice. They help facilitate the changes taking place. We want to hear what they have to say because they’re the future of our business. You can’t always fix everything, but it’s about having the conversation and considering what we could change. It’s about being openminded, really.

On clients taking media in-house

I think media agencies will always have an important role in terms of strategy and creative thinking. Clients will take stuff in-house, and we have to be flexible and think about how we can construct our services to continue to meet client needs. For some businesses it makes sense, like big retailers having production facilities or big corporates that want a handle on their own data. The one thing I would say [about clients taking media in-house] is that media is not their core capability and they really need focus on what their core business is. Media is our core business– it’s what we do, and I think that’s always going to be the fundamental business. We already work with clients that have bits and pieces of media inhouse, but that doesn’t mean they don’t value our contribution. And I think that when clients have media in-house, we have to look at what role we can play given that we touch multiple categories and have a depth of specialist capabilities. I think there’s still a lot we can do.

On the rebrand of CAANZ to the Commercial Communications Council (CCC)

The organisation has been CAANZ for 17 years. The brand needed a refresh to reflect the industry. Regardless of what discipline within the spectrum of agencies you’re in, it’s about communications that deliver commercial results for clients and that’s all captured in the new name.

On criticism of the CCC

The thing about the Comms Council is that it’s actually a small organisation. It’s five people. I think it’s very easy to be judgmental and critical of all the things an organisation may not do, but I think you’ve also got to look at all the things they are doing and see some of the things that are valuable to the industry. I personally think the Comms Council has done a great job of its professional development and education programmes. They run a great foundation of advertising courses, they were instrumental in bringing Peter Field to New Zealand and they run great strategy and media labs. If you think of the number of things they do across the year from a professional development perspective, it’s actually substantial. We also have key events in the Beacon and Axis Awards, which are pillars of our industry in terms of celebrating the work we do. The one thing we’ve done over the last three years is become really clear about what the Comms Council should do in terms of promoting our industry and its contributions to the economy, business and society. So with this in mind, I actually think the Comms Council contributes a lot. Are there areas for improvement? Of course. Are there projects they should take on? Probably. But it’s a not-for-profit organisation with five people, so let’s be realistic about what can and can’t be delivered.

On what a media agency of the future looks like

Strategy and creativity will be hugely important regardless of what the framework of an agency might be in the future. Whether we have media agencies that are still media agencies or creative agencies that are still creative agencies, those fundamental human capabilities will still be enormously important. Without a shadow of doubt, artificial intelligence will touch the landscape. For instance, will we all have our own artificially intelligent PA that makes decisions for us and determines what brands we choose? That will probably be some part of our future, and it’s all very exciting when you think of the constantly changing framework. There will be so much that’s automated in the future, but it won’t take away from the need for smart thinkers, creativity and the fact that we still want to engage with people.