The advertising, marketing and media industries are significant periods of change. But you already knew that.
So why, at a time when so many are bemoaning shrinking budgets, shrinking teams, growing production expectations and more scrutiny on measurement, would someone join the industry?
For Ian Ball, Enero’s global CEO, it’s par for the course in his career. This is the second part of our exclusive interview with Ball after he stepped into the top job at Enero a year-and-a-half ago. You can read part one here.
“I like challenges,” Ball told B&T.
“The last few jobs I’ve had, they’ve always been significant challenges. I’m not a steady state leader. In the past 20 years, at all the jobs I’ve had, I’ve been put in to solve a specific challenge or a specific situation which has challenges where a better outcome is needed.”
Prior to joining Enero, Ball served for 21 months as the chief operating officer and global head of ventures at TEG, the parent company of Ticketek. It followed his work with private equity business Silver Lake, which had partnered with TEG.
Before that, he was CEO of environmental and engineering consultancy Cardno, now Stantec. In this role, he restructured its APAC division and oversaw two acquisitions as well as de-merging the firm into two ASX-listed businesses.
Before that, he was EY’s deputy Oceania CEO and head of markets. He also spent more time at Silver Lake and nearly seven years with IBM in New York, Shanghai and Sydney.
“The commonality with all those jobs, bar one, is that they were people businesses. They required big transformations and, oftentimes, there was quite a bit of technology involved in those,” Ball said.
“I’ve got quite a strong grounding in technology-led transformation and, I think, one of the reasons that the [Enero] board chose me, rather than someone steeped in the industry, is that they knew AI was going to change the industry. Perhaps someone with an outside perspective from technology-driven transformation could bring a helpful perspective to the role.
“I’ve made my career being put into situations where I am the change agent. I was in New York when the internet hit and I worked with some very large American companies. There were huge amounts of change then but the amount of change in this industry is unprecedented in my career… The pace of change, the magnitude of the change in the client environments, the technology and the impact it has on agencies. It’s extraordinary.”
Sometimes they’re interested, sometimes they’re not
That big change, of course, is AI. Ball doesn’t have a crystal ball (pardon the pun) to see how exactly it will change the industry, to what extent and to what changes will happen when. But that’s not the point, because no one does.
“I don’t think all clients fully understand AI. Frankly, I don’t think anyone does. Not the agencies, even the ones that are quite advanced in that respect,” said Ball.
“What clients do want, across the board, is more for less. There’s huge pressure on clients, CMOs, on marketing departments, advertising budgets, communication budgets. We need to do more for less.”
A lot of clients, Ball said, are approaching Enero’s agencies expecting that they will use AI.
“We don’t need to know the details, as long as you’re operating a secure space, our data is secure and there’s an ethical use of AI,” he said.
But clients do need to see greater efficiency with how their money is used.
“We have clients saying to us, ‘The retainer you had last year is going to be 10-15 per cent less this year. That’s the way we’re going to get the efficiency dividend’. That’s the way for the CMO to prove to their boss that they’re getting better value for money,” Ball said.
“They’re also looking at how they can adopt AI and take work off the agencies. In that respect, we’ve got to continuously challenge ourselves to add more value, to continue to innovate but also take cost out of delivery… Clients don’t really know the details perhaps of how we’re using [AI] or what we’re using. Sometimes they’re interested, sometimes they’re not. But they’re definitely interested in getting better value for money and more effectiveness.”
Within Enero, as we detailed last week, there has been a great focus on creating skills-based agents to enhance and accelerate the pace of human work — each has a specific, dedicated task.
The world’s other holding companies each have slightly different ways of bringing AI into their work. WPP’s Open platform, for instance, bills itself as a platform that “connects your entire marketing workflow” unlike “point solutions that automate tasks”.
Omnicom’s Omni does similar, bringing Acxiom and Flywheel together into “a single operating system” that gives clients a “unified foundation” to connect strategy, execution, and performance across their entire marketing ecosystem.
Publicis’ CoreAI data and knowledge platform links up with its Sapient business to do all manner of things from code modernisation and content creation.
There has been a great deal of speculation over the futures of specific job functions within the agency landscape, too.
As Sir Martin Sorrell, executive chairman of S4 Capital, the parent company of agency Monks which also has a very expansive vision of AI’s potential, said, “There are 200-250,000 people involved in media planning or buying today. There won’t be in two or three years.”
Ball, however, has a more measured view on AI. Human talent — an area that he thinks its agencies, Hotwire, Orchard and BMF, in particular — have a significant advantage over its larger rivals.
“We’ve got to do things with the expertise we have, the craft, the capability and the human talent we have to leverage AI tools and platforms to become more effective and add more value to clients,” he said.
“AI is not the end, it’s a means to an end. What’s still critically important is the quality of the output — whether that’s communications, advertising or digital marketing campaigns. It’s the quality of the output and human talent that will become more important because as AI levels the playing field between huge and small, the differentiation will be human talent.
“It’s going back to what it was before, the trust in the relationship. Do you want to work with these people? Do they really have creative ideas that are above and beyond the level playing field AI can generate?”
Ball added that Grant Toups, the recently hired global CEO of Hotwire, was one person who embodied the agency of the future.
Race to the bottom
Cynical readers might look at Ball’s comments around reduced fees, efficiency dividends and taking cost out of delivery and think that Enero is gearing up for a race to the bottom. But that’s not the case.
“This is not a new concept. I’ve been working for 40 years and I’ve spent many of those years in consulting. One thing I’ve learned is that whatever is the year’s hot new service offering that’s premium priced and everyone wants to get a piece of… commoditises over time,” Ball said.
“Whether it’s reengineering, which was really hot in the US when I was working there and has eventually become a commodity, or robotic process automation, which was the precursor to AI in some ways. Really, if you could spell RPA and you were a consultant, you got a big day rate and clients were willing to pay a lot for it. That’s now a commodity. This is not a new paradigm. Things commoditise over time.
“It’s not a race to the bottom if you figure out how to continuously take cost out of delivery and, at the same time, continue to innovate. Your innovation has to be centred on the client. What are the clients’ problems and opportunities? How do you align your service offering with their agenda? How do you continue to innovate and then take out cost in delivery of what was last year’s hot offering, the year before, and so on? You have to do both.
He then issued a stark warning.
“If you’re still stuck on last year’s offering, then yes, you will be on a down elevator. You will be following that margin down, you will be commoditised.”
In this world, Enero’s advantage comes not from its scale. But rather the lack of it.
We don’t have 200 clients
Ball said that Enero was in the sweet spot of holding companies — it was neither too big to be unwieldy and hamstrung by global processes, nor was it too small to make serious investments in capability and talent. This positioning gives it a greater sense of “client intimacy”.
“The closer you can get with your customers from a relationship point of view, understanding their strategy, their customers, their challenges and opportunities, then you will become a lot better at innovating new products, new services, new offerings, new capabilities that will help them add more value to their business. And that is essential. That’s where the human relationship comes in,” he said.
“Things like ALDI’s long idea didn’t come from AI. It’s never going to come from AI. That’s a fantastic, human-born capability which lasts and lasts and lasts. Nothing is going to change from that perspective.”
Ball said that Orchard and BMF were Australian agencies with Australian mindsets that understand the Australian customer.
“We can build stronger relationships and longer standing relationships. With some of our clients, we work with them for years and years and years. Over time, we know those nuances, we know how they’ve changed, adapted and we know the market better,” he said.
“We’re finding as a result of the holding company mergers that there’s fallout. There are clients that are either coming out of those consolidations because there are internal conflicts or, increasingly, because they’re not happy with being a smaller fish in a bigger pond and we are picking up business on that basis.
“They’re more important to us because we don’t have 200 clients, we have 20. That puts us in an advantageous position.”
