MediaCom’s worldwide chairman and CEO, Stephen Allen, is in Australia and B&T managed to grab some time out of his busy schedule to talk global ad spends, Australia’s place in it, and the technology that gets him excited…
There seems like a fair bit of uncertainty – globally speaking – at the moment; Brexit, Trump, US-China trade wars. How do you see that affecting ad spends in the coming year?
Spends will go up in 2019. China is still growing; the US economy is okay and we’ve seen domestically in the US growth over 2018. And we will see more of that over the coming year. Over in Europe, the economy did well in 2018 and, Brexit aside, that does provide an uncertainty. I foresee modest growth overall.
How well-versed are you in what’s happening here in the Australian market? What’s the threats, opportunities here?
The Australian market remains a very important one for us. What’s interesting about the market down here is you have a very strong mix of digital… similar to the UK, but ahead of China and ahead of the US, actually. Funnily enough, I think traditional media is faring better down here than globally. TV’s still okay, radio seems to be modestly growing, out of home seems to be doing really well and, so, really, the only piece of all that, that’s hurting is, print. And, actually, it’s not at the rate of decline like I’ve seen in many other markets. I think Aussies still like their newspapers and that has to do with national reach and population. So, it will be stable growth here, it won’t be stratospheric.
And the plans for MediaCom in Australia?
We’ve got great clients down here and they’re doing good work and there’s a real hunger and ambition down here to be market leader again. Look, that will take time, but that’s the ambition.
Is that the strategy, to go after the big, global clients?
Absolutely not. I know the best MediaCom operations – and we have 120 of them around the world – the best ones have that great blend of global clients and local ones. I think just be great in every category.
Australia remains a pretty small market and there’s no shortage of media players. With the consultancy firms now wanting to play in the space, is it set to get even more crowded?
Yes, if you do look at the media landscape in Australia and the amount of choice it’s like, “How do they have all this?” I remember one person once telling me that media in Australia can almost be a bit of a sport. It’s an industry – and maybe that ‘s due to the likes of Murdoch etc – that Australia’s very good at media, it’s almost like a national export. And I clearly think there’s an appetite down here for media consumption but, you’re right, it is disproportionate.
Just on the consultancies, how much of a threat are they?
Look, I promise you I don’t have my head in the sand. I’m constantly looking over my shoulder and I think you have to be. And, if I think back over the last two years, we would have to be the most active network in terms of new business. I don’t think I can count on two fingers during that time that I can think that we’ve come up against the consultancies; them being an alternative candidate to us. That’s not to say that that won’t change. But if you said to me, “What’s the difference between what MediaCom does and what Accenture might do?”, I’d say the big difference today is the ability to link though from the consulting to the execution. Everything now happens in real time. We’re actually planning campaigns in real time, as data comes back, you’re adjusting and tuning the whole time. The fact is, campaigns are at their most glorious and best when they are happening harmoniously.
All the talk here in Australia is creative coming back to media. Do you see that happening?
No, I don’t ever think media agencies will be wholescale, full-scale creative agencies. What we’re concerned about is having the right message. We do huge amounts of work identifying and working out the right audiences for our clients, so we can maximise effectiveness and minimise wastage. Let’s get rid of the people that will never buy our clients’ products, let’s take them out of the mix, and let’s focus on the people who we can happily reach in the most effective way.
And to do that there’s huge amounts of slicing and dicing, using big data. But what’s the point of all that if, having segmented all those audiences, what’s the point of selling to someone who likes wearing green and someone who loves wearing blue if I serve you both the same ad? So, creative agencies are about that big idea, and media agencies are about taking that big idea and serving it appropriately to our clients’ audiences.
You’re lucky enough to get a seat at the table with CMOs from some of the biggest brands on the planet. What’s a recurring concern you hear from them?
The number one question is: “What are we missing out on?” If I go and see a client who is the global arm of a global client, they go, “What are you doing in the US, in China or in the UK that we might not be doing here?” So, there’s this kind of curiosity. Actually, if you look at the trend of media pitches in the last three years, I would challenge you to name me one media pitch that was about deconsolidation. The flip side of that is that global media advertisers have been trending to global consolidation and some of these clients have 400 agencies and it is interesting that the companies that have the most internal resource and expertise in media… the big CPGs are the ones who typically talk about in-housing and because they have more resource in-house they rely a little less on agencies and, paradoxically, where companies consolidate their media they look to their agencies to be an extension of their business, to be their eyes and their ears.
So, I think a lot of our clients see the benefit of a global network, that we are their eyes and their ears, that we are the people that are able to take something that is great in one market and instantly share and reapply it in another market.
For clients, when deciding on an agency these days, how much is it just about price?
There’s definitely some truth in that. But when people like me talk about that, you can find yourself sounding like a bad loser. The answer’s this – clients are under pressure, that pressure gets passed down the line to all their business partners and suppliers and there is, at times, decisions get made that are purely commercial and that absolutely happens.
In our experience, where MediaCom can prove and demonstrate a tangible advantage to a client – and by that I don’t mean being cheaper – I mean we are going to give them better ideas that is going to lead them to selling more stuff. Cheaper rates don’t simply sell more stuff. If a client thinks all agencies basically do the same thing then you’re commoditised and at that point you’re just a lump of a steel and people are like, “Where can I buy that lump of steel cheaper?” So, we constantly strive to do better work, to think better and there have been times when we have walked away, rejected business as a result.
But there’s lots of decent, good clients out there and we have had to become – and I don’t mean this in an arrogant way – but we have had to become more selective at the business we will pitch for. Sure, that that doesn’t guarantee we will win it. At a global level, we often have to think long and hard about whether we want to throw the resource at a particularly pitch, because when we get to the end of the pitch, are we going to be happy with the outcome?
A technology that really excites you at the moment?
Look, I’m no techno geek-o. I’m far more excited about what technology will do for me or for my clients. If it gives me and my clients a cleaner, safer, digital ecosystem, then great. But if it’s just this speculative, crypto currency, let’s get rich quick-thing, then I’m not interested. I’m always a strong believer in people first, better results. If technology can help my people grow and develop… one thing smart young people don’t want to do is drudge work. Repetitive, boring, drudge work and whatever we can do to take that away through technology or AI, where the machine actually does it or does it more accurately, then that’s a good thing. By making people’s lives easier, it should also make us more efficient and competitive. And in the end, you want to give your clients the very best, the most talented people, so staff retention and staff development is really key for us.
Here in Australia, (the workforce) it’s very transient, people move around very quickly here. But take Japan, people will stay in the company their entire lives.
Mediacom has an amazing global mobility program where we move people around our network. And we do that because it gives people a great career and learning opportunities, but it also brings us increased diversity and knowledge into a market and that’s important.
Just to summarise, I think we are excited about Australia, we’re happy to back winning business, we’re building the business down here slowly and carefully and we’ve got a talented, young team of people and I think in Australia we’ve got this nice blend of global and local clients. I know from an international perspective, MediaCom is very excited about the Australian market and always has been. And looking back at last year, we won an awful amount of business over any other agency and hopefully we are going to do more great work for those clients.