What do BRANDs need?

Mr. Brad Jakeman, President of the global beverage group PepsiCo, said something that in theory could upset the Agency world. The speech ended up in an article at AdAge with the title:

“PepsiCo Exec Has Tough Words for Agencies” (By E.J. Schultz. Published on October 15, 2015).

As a sales executive my best client prospect is the one starting to raise their voice expressing in a very clear manner what they NEED. At some times this “voice raising” might be considered as rejection. Therefore we should consider that rejections are triggers for a true understanding. We need to step out of our comfort zone and grab this moment to listen.

What is it that Mr. Jakeman wants to communicate?

Before starting to dig into his speech at ANA anual meeting 2015, I had a look at a few Videos published by Mr. Jakeman in other channels. Want to remind the readers that Mr. Jakeman hold some important credibility in the industry and was titled "Ad Person of the Year 2015" by The Advertising Club of New York for his ability to build powerful brands through innovative, creative and consumer-centric programs. Not bad, it is a person that knows what he is talking about. Lets keep listening.

Apparently the big pillars for PepsiCo for the last two years are based on two things. 

  1. Creation of internal design teams to promote CREATIVITY
  2. Be DIGITAL sensitive, NOT meaning creating digital departments (silos) but rather be part of the digital culture.

The outcome of this was to BRAND PepsiCo around the enlightened concept of Every Moment Counts so don’t wait because the moment is NOW. It was the start of the theme #LiveforNow


Much content was created and PepsiCo went Social! in other words CREATIVITY + DIGITAL

So lets get back to the article. What is Mr. Jakeman complaining about and how is this related to the media agencies? These are his main points. 

- Ad agency models are breaking
- Pre-roll ads are useless
- Measurement models are outdated
- The ad industry lacks diversity
- The phrase digital marketing should be dumped

If I would be in the Agency chair hearing this I would immediately take action!

Mr. Jakeman said that the agency module has not changed the last two decades, its breaking and they are loosing revenues. It seems as if media buying and brokerage is not where BRAND clients need their agencies. Mr. Jakeman took the whole creative part inhouse. He build something that apparently their agency was not able to do themselves. The agencies are falling behind in what should be their most important asset, which is creativity. Also lets not forget, no machine can substitute this.

Love this slide from Ola Ahlvarsson (the video unfortunately is not subtitled in English), one of the most important Digital Entrepreneurs in Sweden at an IAB meeting in Stockholm

Translation: Humans, what difference can we make (that machines cannot)

-New thinking
-Complex connections
-Then CREATIVITY is highlighted in orange color
NOTE: Non of these things can be automated by any machine

So what could be a solution? At DMEXCO I listened to Mr Yannik Bolloré the CEO at HAVAS that said that the reason why HAVAS is being so successful is that they have understood that the math people should only be there to help Creative people and therefore HAVAS should NOT be considered a technology company. Creativity is in the center. Great learnings!

Furthermore Mr. Jakeman said that Prerolls are useless. We wait 10-20-30 second for the useless content to finish in order to see good content. He said that this is not disruptive, only bothering!

So should we not use preroll in the marketing mix? Well, with Programmatic Media buying, targeting can be extremely sophisticated and if we match the right content to the right people at the perfect time, then just maybe the Spot will not for the user be considered Advertising but rather appreciated content (PepsiCO is by the way a content creator). Also if the Video provides options to find more information by interactive features and if the PreRoll is actually good, why should that not be disruptive? Is Mr. Jakeman aware of the DSPs targeting options? Maybe the Agencies should start to promote to the BRANDs the great options that programmatic media buying is offering and the power of their 1st party DATA? In other words, agencies should be empowered with the technology companies that offer these solutions and know how to use them in the best manner.

Furthermore, Mr. Jakeman said that the measurement modules are outdated. YES, he is right! What are we measuring and why? For instance, Appnexus measured how many Ads were viewed but no one realized that over 50% were NON HUMAN. Does this make sense? Measuring something that no one sees without detecting the Fraud? Mr. Jakeman said in the interview that in the old times marketing spending was a % of Net Revenues. Well with #LiveforNow much advertisement is for FREE. For me the solution is that we need to measure MEDIA that makes sense for the BRANDS needs and in a way that its understand to those who take strategy decisions (Board members of Brand companies). This is a very complex job and need to be outsourced to the Technology companies working with sophisticated metrics and attribution modules. I believe that on one side the Advertisers need to get involved to take control of measurements and define the right KPIs and on the other side the Technology companies need to deliver the best solutions. Again, the agencies should focus on Creativity and make the best use of the metrics & ad tech tools in order to improve understandings that will lead to RESULTS.

Another criticism was the lack of diversity. Basically PepsiCo felt that there was a lack of women in the agencies compared to the large amount of women that consume PepsiCo products. It’s a valid point and as a matter of fact the agencies need to be agile to form teams that are the most suitable for the BRANDS and not to build complex agency organizations. 

Finally Mr. Jakeman points out that the phrase digital marketing should be dumped because he believes that companies should turn around things to create a digital culture instead. Digital will change things in an exponential way so there is a valid point in what he is saying. If we do not ride the digital wave and go with the flow, we might get stuck on the wrong side of the wave crest that could be lethal.

As a summary my understanding to this “controversial” speech made by Mr. Jakeman is that we really need to focus on what we are good at. If not, the client will take its own decision, which they are perfectly entitled to do. Media buying today is NOT about buying power. It’s about sophisticated tools that automate the buying process. It’s an area in which Technology driven companies are focused.

The core however and what Mr. Jakeman tries to point out is that promotions is about CREATIVITY. This will not go away! I believe that the agencies should take a lead in this because if there is something that no machine can make better than a human, that is Creativity.

The advertiser should be involved and therefore anyone that work in the advertising industry should thank Mr. Jakeman for speaking out. If more advertisers would take control of things and raise their voices, then we as an industry would be far better to serve them, because lets not forget the Ad Agencies true mission is to serve the BRANDS

Focus Areas
Brands: focused on the PRODUCT
Agencies: focused on CREATIVITY
(also read : The Golden Triangle)

If you want to learn more about BRAND solutions from an Ad Tech perspective including solutions to Agencies and Advertisers, I would be more than happy to have a conversation. Lets grab the inspirational moment that Mr. Jakeman has given to us in order to talk about what is relevant for YOU. The Digital transformation is a challenge for all organizations and the only way to let go of mental blockage is to talk! Lets all join the conversation.

Im available on @folQ_DigitalAds or send me a mail to andreas.akesson@adform.com


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