Managing Marketing: The Cookie Apocalypse, Media Wastage and Independent Agencies

John_Vlasakakis

John Vlasakakis is the Co-Founder and Head of SEO at Next & Co, a pioneering digital performance marketing agency based out of Melbourne. John talks about the value of specialist independent agencies, the huge and complex challenges facing the digital marketing industry, the question of whether or not Google’s delay to FLoC is ‘kicking the can down the road’, and the role we can all play to improve a multi-billion dollar industry, not just for the big advertisers but for the smaller players.

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Transcription:

David:

Welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.

And today, I’m sitting down with John Vlasakakis, who is the co-founder and Head of SEO at Next&Co; an independent performance digital marketing agency based in Melbourne, which according to your website exists to make the digital world a better place, which I think is no bad thing. So, welcome, John, and thanks for joining me.

John:

My pleasure. Thank you so much for the opportunity.

David:

No problem. Let’s talk … before we get into the specifics of Next&Co and what you guys are up to, let’s talk a bit about the agency landscape. And I’ll be letting our listeners behind the iron curtain — we’ve just had a chat about this off the record.

But look, over time, there’s been a huge amount of debate and even what could be called fads and trends around how media agencies shape themselves and their service offering. Everything from the big multinational one-stop shops through to discipline specialists, through to hub and spoke models, through to affiliates.

And also, there’s been a lot of debate about what advertisers feel is the right level of specialism and the number of agencies across their roster. So, in that context, I would probably call you (and tell me if I’m wrong here) — I’d probably call you a discipline specialist agency.

John:

Most definitely, yeah.

David:

How would you define the value proposition of Next&Co, and how do you work as part of a potentially broader agency roster within that?

John:

That’s a great question and it’s one that we’ve been dealing with… the businesses started off February 1, 2010. So, just over 11 and a half years old now. That put into perspective; we’ve had these discussions with several clients, but yeah, there’s a shift occurring now in the market where brands are more looking towards our specialised agencies. Because the one-stop shops and arguably, a lot of the globals don’t have the senior talent at scale to be able to deliver an effective service for the calibre of client.

And where we are finding our sweet spot in the market is over 50 to 60% of the clients that are with our global networks are not getting the tender love and care that a business of their scale and budget deserves.

So, some of these brands aren’t spending 20, $30 million-plus in annual billings with the agency. They’re seen as a small client to them. They don’t get the right level of client servicing, where working with a specialist party and being a performance agency ourselves, we find that’s where our sweet spot sits.

We’re not a fit for everyone and we don’t claim to be a fit for everyone. But generally, clients in that sub 50 mil in billings mark, are a very, very good fit for a specialist agency because they’re going to be dealing with the senior talent.

And I can argue until the cows come home on this, those independent agencies are made up of far more senior talent than what group agency networks are purely because the co-founders are generally senior talent that has gone out on their own and they’ve acquired the right talent so they can service a client.

David:

So, let’s hone down a bit on the numbers there because if I’m a CFO — and this is something that we come across quite a bit. If I’m a CFO or if I’m a procurement person, or even if I’m a marketing lead, my natural inclination is going to be to have one agency instead of two. If I can have the services offered by a one-stop-shop and not have to manage two agencies, I’ll try and go for the one.

Now, you’re obviously, it’s a different proposition. You’re saying, “Look, the experience is there to make this work.” Do you think it’s fair to say that the cost involved and the effort involved in managing two agencies instead of one is more than paid back by … I mean, you’re going to say it’s a leading question, but I’m interested in your more detailed thoughts. How does it payback?

John:

Yeah. And look, to put in perspective, the way I see it is when procurement’s really driving and squeezing the price down, you pay peanuts, you get monkeys, is sort of the best analogy there. When you have people that are specialists at what they do that are driving that sort of core capability as part of the brief, irrespective of what the potential agency fees are.

And yes,  if you’re working between two clients and you have part of your traditional and creative done by several companies and then digital and any other performance advertising is done by another; yes, maybe when you aggregate the totals, potentially, there might be a 10 to 15% increase in what agency fees would be if you’re just with one party.

But what’s the main business objective for the business? Is it to save costs on agency fees, or is it actually to deliver a measurably better experience and drive far better return on investment for their advertising dollars? Because I think that last bit far outweighs saving the money on the agency fee.

So, if you work with a specialist, I have no doubt that the businesses will make tens of millions of dollars better ROI because they’re working with industry leaders rather than just a cheaper solution.

David:

Yeah, I couldn’t agree more. And it’s a lot of what TrinityP3 is about, and we’ve been talking about this for a long, long time.

But this dichotomy, the place we’ve got to in the industry between the value of cost inputs, and I’m not just talking about fees, but also media inventory cost, of course — versus actually value-based outcomes and value-based outputs of a media agency.

And you’ve just nailed it there when you talked about business ROI. There’s a direct outcome, as opposed to we’re going to buy as many cheap pieces of media inventory as we can.

John:

Exactly.

David:

I guess, whilst … I wouldn’t expect an agency like you to claim we’re always going to be the cheapest/buy the cheapest CPM. I would expect an agency like you almost to take the opposite stance and say, “Well, hang on, that’s not what it’s about.” Is that a fair assumption?

John:

Yeah, couldn’t agree more. We do assist as far as we can on price, but at a certain point, we’re more than happy to walk away from a pitch. And we’ve walked away from several over the years where we just say here are the exact reasons why for the money you’re asking that the solution can’t be delivered.

If you’re willing to reduce and set a new expectation about what outcome can come from the activity, then we can agree to it. Because we don’t want to be putting our name towards work where we can’t actually achieve that said business result. So, we generally bring up that expectation. And then if it still looks like we’re still looking for a cheaper solution, then we’re not in the right place to work in the first place.

If you’re looking for someone that’s going to want to take accountability for the results and make sure they’re achieved with the budget that’s provided and resource it correctly and not cut corners, and work with media vendors where you’re taking the clip of the ticket and the clients not knowing because you want to have a 2 to 3% service fee appeal to recruitment, we’re not … and most independents don’t work that way.

We’re very, very black and white with it. This is how we make our money. This is how we rip our rewards from our efforts. But we’re going to put our name to it. We’re going to put our balls on the line to achieve those results.

David:

So, you touched on the “T” word there, which is, of course, transparency. I deliberately didn’t … I haven’t planned the questions specifically on transparency because I mean, we talk about it so much.

But I am interested in your thoughts particularly as an independent player about the efforts of the MFA and the AANA in this space. I mean, MFA released something quite recently. A sort of a four-box, this is what we think transparency should be about. The AANA has their contract template. What do you think about this?

John:

I think it’s all for the best. And I think it’s probably going to make a lot of the global networks a little bit shaky because there’s a lot of back of hand deals going on that are very shady with how those agreements are set up.

I’ve heard about countless of them over the years that I think it’s all for the best where any brand that’s investing even the smallest amount of budget should clearly know in a supply chain where all the dollars are going and how much is actually going to be spent on the raw media components.

So, by all means, I think transparency is key. I think it’s the way forward and I think it’s going to also be a rude wake-up call for brand side procurement to see that the fee and the charges that they were demanding are not going to be economically viable for anyone to service it with onshore talent.

David:

I think there’s a big, and we’re getting slightly off-topic here, but let’s talk anyway; I think there’s a big argument with what you just said about the base of math’s not working out. If you charge 1%, it’s not going to keep the doors open, they don’t make a profit.

I’m not sure that procurement in particular has been unable to work that out for themselves. I just think they’ve turned a blind eye, and this dynamic in the market where they have been more and more demanding, and agencies have agreed to these kinds of terms has almost created this kind of environment.

John:

It does. Even if we can even assist companies where I think all the associations and the federations, they just need to probably meet up at one summit with the key brands, probably the top 50 spenders in the country with the CMOs and even the heads of procurement to actually discuss these issues and come up with, I guess, a new standard operating procedure to work towards in this country.

Otherwise, if procurement is going to keep squeezing that cost that the agency is going to agree to 1%, but they’re going to be hiding 20% somewhere else, so they can continue making the same amounts.

It’s a shame that our industry works like this because I’m so passionate about it. I’ve been doing this for 15 or so years, but then when I hear about some of the stories about how mainly on the agency side, how they’re trying to keep the lights on by not being transparent with clients, it’s creating a very toxic environment that it’s just creating this balloon that’s going to pop one day and it’s not going to be good for anyone.

David:

Well, I love your idea about let’s get everyone together. You heard it here first. John’s going to champion that. We’ll put it in pencil for a week next Thursday. Oh, lockdown, lockdown — oh no, what a shame.

John:

I’ve got a lot of phone calls to make.

David:

You got a lot of phone calls. Just a few people to get on the line.

Alright. Okay, that’s good stuff. Let’s focus a bit more on a topic which you’re going to know more about than I am actually, I think.

The cookie apocalypse, it’s becoming a bit of a tagline in itself and the tightening of user privacy, lots of us will have read about it. Many of us are writing about it. But based on what we’ve seen so far, it’s clear that the impact of changes made by Apple, Google to a certain extent, and others are going to have/or will have a profound effect on certain parts of the industry.

The way in which first-party consumer data is or can be collected and used, the development of alternative IDs, the perceived effectiveness of revered platforms such as Facebook, which may be slightly dented, and the way in which targeting is performing generally.

And now, I mean, as of a couple of days ago, I’m reading in the press that Google is putting things on hold for two years. They’re putting FLoC on hold, it hasn’t worked. It’s not compatible with GDPR, which I think might be a bit of a gap for them anyway. But look, this is really complex. It’s really, really hard to navigate.

As an expert in the field, what are the burning platforms in your view? And also, I’m really interested to hear how you’re working with your clients to try and safeguard them, if nothing else, and involve things in this kind of time.

John:

Yeah, I think the cookie-less world long-term is going to be for the best, and it will drive far better performance. We’ve been seeing it for years where we have a single source of truth. We don’t rely on Facebook sometimes, arguably overinflated numbers with like view conversions being counted, it’s a very overinflated metric, but it is all for the best.

I think Google has made the right decision here to delay this. Brands were nowhere near ready, specifically with a lot of the brands we’re speaking to in the ANZ and APAC region. They simply weren’t ready for this change in time. I think Google has probably noticed this and given everyone a little bit more time to prepare.

But it’s all for the best because using and acquiring first-party data like for example, with some FMCG brands we’ve worked with over the years, they had no strategy to acquire first-party data. They were relying on getting all the sales through from the Coles and Woolies of the world. But now, that they have started to think of that and started to develop these strategies, they’re still 12 to 24 months away to build up a meaningful first-party data audience list to potentially use in the future for any form of activity.

So, I think it’s a blessing in disguise for a lot of the brands to just understand a little bit better and prepare for it, because it’s like moving a freight train with your own two hands for these brands because it’s a completely new concept that they still struggle to understand.

David:

I mean, I know Google was just one of the players involved here. IOS just changed and there are other things going on. But Google is often … and this is my personal opinion. They’re often outwardly very altruistic in the way they frame things, but inwardly maybe not so much. It would be nice to think that Google has paused this because of advertisers not being ready. But I mean, the cynical way to interpret that is that they’re kicking the can down the road.

What do you think about that statement? And also, how big is the danger that advertisers are going to view it like that and just go back into old … I mean, they’re going to continue using cookies in the same ways. It’s back to old habits, and then we’ll get to two years down the road and they still wouldn’t have done anything.

John:

Yeah. And potentially, they could be kicking the can as you said because a lot of these large publishers (and I’ve seen it firsthand) have simply not done a good enough job to keep up to date with the innovations that are occurring in the black market with ad fraud.

It’s something that we see consistently; Google is — and Facebook is even worse at this, that they are very, very reactive towards ad fraud and reconciling that against the spend. So, potentially, they’re reaping the rewards and profits of low-quality or non-existent inventory or activity that’s occurring that is largely driven by these poor-quality cookie environments.

David:

You’re suggesting that they deliberately don’t have their foot on the gas as hard as they could have, because it’s not in their interest because they’re still picking up revenue from fraudulent activities?

John:

Exactly. I’m seeing it firsthand that there’s anywhere between like 5 to 35, 40% depending on budget sizes, around how much ad fraud there is across every sector that we’re working in. And I mean, you’re consistently chasing your tail then.

I don’t think they’ve been vocal enough or made enough of a stance around it when you’re buying inventory across a lot of their platforms, where brands are having to pay far larger costs with the third-party providers to verify this information, to confirm what is potentially or isn’t legitimate.

So, specifically with a lot of that display activity, it’s still a bit of a Cowboys playing field. And I think part of the cookie-less world, I think will expose that and it’s potentially — you put the words in my mouth — there’s potentially a revenue gap and a commercial imperative for them. If they’re going to be kicking the can, it might be because they’re trying to get all the ducks in a row and they probably need a couple more years to figure out how they can balance out their profits and the solution for the end-user.

David:

Look, it’s a theory, and that’s all it is by the way.

John:

Exactly.

David:

It’s just for legal reasons. I should probably state we’re not accusing Google or Facebook of anything. But in this kind of environment, where it’s such a juggernaut of an industry, it’s hard to decode it. Let’s talk about Apple just very briefly.

I mean, 14.5 came along and everything that I’ve certainly read has been about tanking opt-in. I mean, surely that was just expected. I mean, if they’re changing the way in which users operate and asking for more of a user say, then no one’s going to want — well, very few people are going to want this kind of thing. Well, how do we get around that?

John:

Well, currently, it looks like it’s around 1 in 10 are currently opting in. Look, maybe that user behaviour may change over time, but it might come to a certain point where advertisers, agencies, and brands are bleeding that much with performance that they’ll have to shake it up.

But I think it’s something that’s going to be a bit of a wait and see that I think people are going to have to adapt and see how the performance goes. But if it continues as it is, it is just going to make it far more challenging for brands to get really good performance on the 14.5 updates and onwards. And I think that even echoes why first-party data is so important where you already have a database that’s agreeable with your inventory going out in the market.

But yeah, look, it hasn’t been easy for anyone, but I feel like things change quickly for the good and bad. And I feel like this won’t be permanent. It’ll be something that’ll evolve and change over time, and things will go back to a different normal.

David:

I agree, and we’re all talking about new normals in all sorts of ways. But you can see — and again, I’m not going to even talk about Apple’s motives or otherwise in making these changes. But you can see there could be this holy grail of better-quality content targeting in lesser paid ways, with users more willing to connect with. And then performance becomes much, much, much better, and it becomes a much more valuable proposition.

But I guess it’s all about habit again. And the drug of cheap inventory and the drug of cookies and, getting off that stuff. There’s no easy answer.

John:

No, we can be here all night.

David:

We can spend all day. Let’s move on. I mean, it’s a good sort of jumping-off point to talk about Prometheus. Because you were in the press recently and I was really interested to see that launch against the backdrop of all this complexity and change.

Just talk me through the philosophy behind Prometheus’s development, the breadth of its capability, and how it’s been received by … I mean, I saw the impressive numbers of our clients/advertisers already using it. But also, by other agencies and maybe those involved in ad tech as well.

And have you, if at all been affected by the industry changes we’ve just talked about in the development and execution of the tool?

John:

Yeah, great question. Now, I mean, the Genesis of Prometheus really came because we sort of had this intellectual property in the business on how we can calculate to the exact dollar, how much media is being wasted across any channel that we will potentially do an audit on as part of our business development process. And we decided to obviously, automate it and build it into a tool where all the conditional logic that we use to do these calculations ourselves are all built into a self-service tool, where you literally integrate the account.

Which, for now, we’ve got Google, Facebook, LinkedIn, Bing, Pinterest, finalising it with TikTok and Snapchat. That makes up around 98% of our digital inventory right now. So, it’s a lion share of everything. It just connects with the account and you can click a button and it’ll literally within 30 seconds, tell you the exact dollar that you’re wasting on an annual basis and the percentage of how much your budgets are being wasted, and then it’ll break it down line by line.

So, I decided to, I guess, automate it in a way — and it was created specifically for CEOs, CMOs, or even potential business owners because there is no bias behind how big your budgets need to be, to use the tool. Any businesses are able to use it. You plug it in and you’ll get a no-bullshit response back, how well your internal marketing team’s doing the work, or how your current agency’s doing the work.

So, it’s overwhelmed us with the positive feedback we’ve had from ad news and the AFR and people messaging me personally on LinkedIn and just reaching out to the company with really, really positive feedback on how this is a change for the good.

Because specifically during times in COVID, I think if there’s one thing that it taught us, is if you want to get better performance, I think the first place every business should start is looking at how they can maximise and improve the efficiencies of their current spends before they decide to dial-up. Because that way, you’re building the right foundations and you’re not pouring water down a leaking funnel.

And it immediately highlights any form of activity because it doesn’t get impacted by any of the changes that are currently going on out in the market. It’ll tell you immediately, by plugging in with your data to see how efficient and effective your advertising is based on all the best practices that are occurring right now with digital media.

So, it’s an instant audit and it’s giving people who aren’t digitally savvy a chance to completely understand the health of their current marketing expense.

David:

So, is it an attribution or … because that’s a catch … it’s a bit of a catch-all term, and I think a lot of people have different interpretations. How does this differ from what many would probably see as a mixed model or an attribution model?

John:

It will use conversion data from whatever current attribution model’s in play. But all the data that’s pulled in from there to calculate the waste media will be pulling it in from other metrics outside of what their attribution is around, are the sort of overbidding on certain campaigns, the campaigns performing towards sort of industry-standard, quality and conversion metrics. Are they bidding on terms that are completely a waste of budget and aren’t actually driving any meaningful interaction with the business?

So, the attribution component’s one, but the calculation will be irrespective of what the attribution is, it’ll run through and tell you exactly how much is being wasted on each platform.

David:

So, it goes much more in-depth at a tactical level.

John:

Yeah.

David:

I don’t mean that in a derogatory way.

John:

No, not at all.

David:

It’s the tactical execution of those things. Just for the benefit of those on tape, John’s got a screen up in front of me with the front end of the model here.

John:

And you can clearly see here, it’s broken down by campaign, ad group — it even goes down to a creative level, so it can tell you how much media is being wasted on a specific creative version, based on all these calculations coming in.

It was one thing that when we originally decided to build a tool we had the IP many years ago around our media auditing process. We don’t want attribution to be the sticky point here that can’t calculate media wastage. There’s a whole variety of factors that come in to calculate the aggregate score of everything.

David:

Yeah, understood. Wow. Okay. Alright, well, look, we have touched on this topic — just shifting gears slightly, but maybe not moving completely away from Prometheus. Of course, one massive sector of what we could define as ad wastage is fraudulent.

And we mentioned ad fraud before. We can’t ignore it. And it’s estimated by most people to be a multi-billion-dollar industry. And loud voices, so I’m thinking about people like Augustine Fou, I’m sure you’re familiar with him, who have been very vocal in the view that what the industry picks up in what I would call traditional ad fraud prevention tactics represents the merest tip of the iceberg.

I’m not going to ask you, can we win the war? Because I don’t think we can. I think it’s a never-ending and ever-evolving war. But what are the biggest single things you think advertisers and agencies should be doing and perhaps not doing so much of to protect themselves?

John:

Well, I think the first place to start is actually being aware of what ad fraud is and the repercussions are currently for every single advertiser globally. I’ve lost count with how many brands we’ve spoken to over the past 18 months that have no idea of what the concept of that fraud is even in a digital sense.

So, I think that’s the first place is that the market, there needs to be far more awareness and education around ad fraud. And then I think the next step there is the big publishers anywhere from Snapchat, TikTok to Google, Facebook, LinkedIn, Bing and Pinterest that they, I think need to be more vocal about it themselves and actually show what initiatives they have in play to reduce ad fraud on their platforms.

Because I haven’t heard much from anyone as of late. And I believe if they make the effort to make everyone aware, all businesses will be aware that ad fraud is occurring and then it can actually become a discussion, and I think an issue that everyone can get behind. Because right now, it isn’t as top of mind as what some other initiatives should be for some businesses.

And there’s billions and billions of dollars globally being wasted on ad fraud.

David:

Okay. Hold the thought on education for a second. I want to come back to that. There are some initiatives out there. It’s fair to say if you think about the IAB, you think about Ads.txt, if you think about Cert.txt— I mean, there are “solutions” that have been put forward. How effective do you think they are?

John:

I’m a big advocate for everything that the IAB is doing. It’s effective for the current state of ad fraud, but I believe the biggest challenge that’s going to be moving forward is how do you keep up with the pivoting and the innovations that occur with ad fraud for it to change how it’s being potentially detected across several publishers.

But particularly, what the IAB has done is a brilliant initiative and it has started to tackle this problem. I just think the solutions that the IAB have in particular need to be made more aware for businesses of all shapes and sizes.

David:

So, that’s a lovely segue there because I want to come back to education. This question of ad fraud, and I mean, if Augustine Fou was in the room, he might well be tearing his hair out right now, because this is a guy who has spent the last, what? Five, seven years, at least.

We’ve had papers written since 2015, we’ve had endless initiatives. We’ve had ISBA, ANA, AANA —we’ve had initiatives, various initiatives to protect people. We’ve had the IAB out there. We’ve had white papers, we’ve had papers of all different colours.

How much education is there? Is this a question of education or is it a question of care factor? I mean, from the advertiser’s point of view, certainly.

John:

Well, look I think all the big advertisers are aware of ad fraud. So, if you have the top 50 spenders, they will all be aware of the terminology and the implications that it has for their business. But you take them out of the equation, the rest of them don’t have that exposure.

So, I think where all the awareness is coming from is greater. I think it probably needs to reach a more mass reach audience in a business sense to let those brands that are like maybe sub 10 mil spend that are unaware of these concepts that are probably working with businesses that aren’t really bringing this up to the equation.

But ad fraud is a key thing that we’ve been driving home particularly for the past couple of years because it is creeping up at not a very healthy rate with the latest statistics that we’ve seen out in the market. But I think all these initiatives are great, they just need far more mass exposure.

So, the business is aware of it as a whole, rather than the head of marketing of one of the big four banks.

David:

Yeah, I couldn’t agree more about those comments about large advertisers, for sure. I mean, we all know that Marc Pritchard over at P&G knows what ad fraud is. I don’t think that’s in question. And I also think there is a degree to which the really large advertisers just view ad fraud almost like a sunk cost, as a sort of cost of doing business. It’s always going to be there.

And of course, there’s a wide variance there in terms of what some people are doing versus what others are doing. But your point about the smaller end of the market, that’s really important, isn’t it? Because to them, the cost of doing business is exacerbated hugely when they’ve got less money to spend. Every dollar has to work harder than someone who’s got 10 times the amount of money.

So, I, therefore, agree that wider publication within that particular cohort is really important. Is there a role for the IMAA here or the independent agency in general, who are more likely to be working with those sizes of businesses to come together? I know they’re your competitors, but come together a bit and try and push that message.

John:

Yeah, because it’s all for a good course. And I think the industry as a whole needs to work towards improving its position and work in a more healthy and sustainable way. So, by all means. I think groups like the IMAA and several other associations should probably put this higher on the priority list because ad fraud is in one-way shape or form wasted media, similar to how Prometheus is developed and built.

And how much better that would be for some huge macro-economic factors. If that budget is actually being spent towards meaningful interactions to drive the commercial objectives for every single business, that it will have a huge impact on the economy as a whole in this country, because money isn’t being wasted towards fraudulent activity, it’s actually being seen by the people that need to see the activity that needs that service.

And we’re talking about tens of billions of dollars here in either wasted media ad fraud that if our statistic from doing over 300 audits is 33% — according to the IAB, that’s over $3 billion wasted annually in digital spends. If even half of that is then put into more meaningful interactions, you can only imagine what impact that’s going to have to the wider economic environment in Australia.

And then compound that with ad fraud, things will be a very different place and businesses, there’ll be delivering far, far better ROI and agencies will be able to demonstrate more value. And this is where we’re talking about my point about coming together to tackle this initiative. Everyone will be perceived as doing a far better job because the performance will clearly demonstrate it.

David:

Oh, I love that point. I think having been in this industry 20 years myself, and you’ve been what? 15; I think we have this ability, particularly within the media industry to be in a bubble, be in an ivory tower, to not think beyond what we’re actually doing and billions of dollars in macroeconomic terms — yes, of course.

So, what you’re saying if I’m hearing you right, is that the power of the collective here should be employed to a better extent. And I couldn’t agree with that more. I think that’s a really, really valid view and a better way to look at it than just being completely focused inwardly on what we should be doing in our own industry.

Okay. Well, that’s a really, really great commentary. And thank you for it. Let’s talk quickly about the future of Europe. You’re a stone-cold entrepreneur as I said when we were chatting before, I mean I can see that energy that’s radiating. You can’t hear it, but … well, you probably can hear it actually, but the energy in the room is palpable.

You obviously must be looking to the future, both for your own business, and we’ve talked a bit about the future of the industry. What are your big bucket predictions for the future of digital marketing? And we’ve already touched on some of those that will have the most effect on advertisers, but going 5, 10 years ahead, where do you see things?

John:

I think the next 5 to 10 years are going to see unprecedented breakout growth in how much spend is going into digital. I think it’s going too far, far outweigh any other medium within the next 5 to 10 years. And it’ll probably equate to — my gut feelings tell me it’ll be 85% of all our marketing budgets will go towards digital.

I think the other thing that is going to change, I think before the next five years, is you can’t be a Jack of all trades because if you are, you’re generally a master of none.

David:

No, I understand what you’re saying.

John:

Where I’m going with it.

I think the future of digital is where businesses are going to want to work with more micro specialist agencies that are very, very good at what they do. Because everything digitally is very clear to attribute return on investment and how well something is going, and people will want to work with the best.

Whether that sits you know across potential clients having a remit across multiple group agency networks doing one capability or potentially an independent working on another capability — we’ve noticed that trend already, where we’re on the roster with three or four other agencies.

Yes, the inter-agency webs get very long, but if everyone has the right agenda that you get some great results for clients because not everyone’s trying to cut their own lunch. So, you understand where boundaries are. But I do believe the evolution of the micro agencies is really going to be apparent.

And what that holds after the next 5 to 10 years might be further consolidation. But I feel like this is going through that journey again, where there was consolidation many years ago, it’s starting to fragment again. And I believe it’s for the best because we started our business 11 years ago just doing one service, but we’ve expanded out just on a digital performance side specialising in that. You’re working with the right clients.

David:

Well, 85% share and everyone gravitating towards agencies just like yours. I guess in 10 years’ time, I’ll come to visit you in your massive mansion when you’ve made your billions.

John:

Yes, let’s hope.

David:

John, look, it’s been a real pleasure talking to you. Thanks so much for your time.

John:

My pleasure. Thank you so much. Hopefully, everyone finds it insightful and useful.

David:

Oh, and I do have one other question; if you had the opportunity to put one part of the digital advertising supply chain up against the wall in front of a firing squad for crimes against the digital world, which part would it be?

Ideal for marketers, advertisers, media, and commercial communications professionals, Managing Marketing is a podcast hosted by Darren Woolley and special guests. Find all the episodes here