Month: April 2022

Speaking with John Harris, Worldwide Partners’ president and CEO, after the conference, some of the lessons learned — from guests including agency futurist Rishad Tobaccowala, technology futurist Shelly Palmer and Martin Agency CEO Kristen Cavallo (whose agency is part of IPG) — could apply to any agency, holding company or indie. 

Fundamentally, the first lesson is that there’s no single path to the future, because different agencies have differing needs. “We’ve got full-service agencies, specialist agencies, agencies in different markets, agencies with different capabilities,” said Harris. “What the agency the future may look like for a CX agency that specializes in pharma can be very different than a full service agency that’s focusing on travel and tourism.” 

Here are three takeaways from Worldwide Partners’ Agency 2030 summit.

New tech = new business models

According to Harris, the first two-thirds of Shelly Palmer’s presentation to the agency attendees pretty much went over most heads as he delved into Web3.0 innovations such as the metaverse, explained exactly what an NFT is and expounded on blockchain’s abilities. But Palmer then exhorted the audience to look at these as entirely new business models rather than daunting tech best left to others. 

“The bigger picture here is this is a completely new additive element of [agencies’] business. It’s going to represent an incremental and new revenue stream that could impact the client’s business by millions of dollars,” said Harris. “Shelly got us to a place where he’s like, ‘Look, this is how this is playing itself out. There’s a new line of currency that is being decentralized, that if harnessed in the right way, you can add millions, and in some cases, billions of dollars based on the size of the clients you’re working with, to the client’s overall business model that they’ve never had.’ 

“Everybody in this space [should be] sitting down and talking to clients about how this can be an exponentially additive and incremental stream of revenue to your already sizable business,” added Harris.

That said, taking this path is not without risk, said Evelyn Mitchell, digital advertising and media analyst with Insider Intelligence.

“It seems like the industry’s excitement is substantially outpacing consumer interest — and the metaverse is still only a shadow of what it can/might become. In general, brands with the best chance of succeeding in these areas as they exist today are brands with younger target audiences and products that are a natural fit for virtual environments, like clothing and accessories for avatars,” she said, adding that “in the longer term, whether we’ll see millions or billions of dollars of additive revenue depends on how the tech evolves and whether consumer sentiments turn a corner, and there’s no guarantees.” 

Restoring the balance of power

Though it sounds almost contradictory to Palmer’s points, longtime Publicis executive Rishad Tobaccowala, who’s now an author and consultant, encouraged agencies to think of tech as tables stakes — and to focus on what people can do that it can’t. His advice was twofold: Hire people who are additive to your agency’s culture rather than mirroring the existing culture. And remember that agencies are in the service business, not the servile business — meaning it’s important to not let clients walk all over you just because they’re the client. 

“We tend to underestimate how much employees express their company’s brand,” said Tobaccowala. “Airlines are a good example — they all fly to the same places using similar equipment, but their differences are based on the people who work for them.”

“In many ways we’ve devalued what we do over time,” added Harris. “There was a great rallying cry for us not to just get paid fairly for the work that we do, but reclaiming our position as a trusted adviser with clients.”

Be a broad canvas, not a blank canvas

Kristen Cavallo, CEO of The Martin Agency, recently made waves in the industry when she singlehandedly stood up for agencies by shooting down an assertion by CEO of Coinbase that his company alone devised the low-tech Super Bowl ad that got a lot of attention. She publicly insisted and proved agencies had been involved in the creation of the ad. 

She took that fierce defender attitude to Agency 2030, telling Worldwide Partners agencies they need to avoid the inclination to be anything the client needs, and not having some distinguishing identity. 

“When agencies act as if they are a blank canvas and not a broad canvas — if they lack a point of view on how brands grow or a point of view born out of their best work — then what happens is that we all become imitations of each other,” said Cavallo. “I think the process actually hurts our industry. It hurts the credibility that we deserve because [we are] people who get degrees in advertising, who study human behavior, who have a point of view born out of years and years of experience. And when that is removed, and clients think we are all imitations or versions of the same.”

Color by numbers

As the 2022 midterm political advertising season heats up, the out-of-home media industry has strong expectations it can gain a larger share of the nearly $9 billion expected to be spent. The Out-of-home Advertising Association of America (OAAA) assembled a primer on stats and expectations built upon spending in the 2018 midterms to help its constituents attract more dollars, explained Anna Bager, OAAA’s CEO and Mike Hershey, executive vp of government affairs. Hershey noted that as soft money groups (usually PACs and party-committee efforts) spend more dollars, the cost for broadcast TV is driven up, and money gravitates to other media with high reach and targeting capabilities. “There’s an unprecedented level of money being attracted,” said Hershey. “Those are projected even higher in this coming cycle.” Added Bager: “There’s a connection between out of home and social media. You get a lot of media [exposure] for free if you do the ads really well and encourage social sharing. Specifically in this polarized political climate.” Some stats: 

• The $9 billion expected is a 135% increase over the 2018 midterms;
• $14.4 billion spent in the 2020 presidential cycle, more than double spent in 2016. House and Senate races in 2020 added to $8.7 billion spent, compared to $4.1 billion in 2016. 
• Down-ballot campaigns are projected to drop $2.51 billion on advertising — up from $820 million in the previous 2018 midterm cycle.
• Down-ballot spending should top both gubernatorial and Senate races, which are projected at $2.33 billion and $2.38 billion respectively.
• Georgia races are predicted to spend $551 million — only California ($592 million) and Florida ($593 million) will account for more in 2021-2022.
• In January 2022, political ad spend on OOH was up 131 percent, which to Bager and Hershey is a harbinger of growth for the medium. 

Takeoff & landing

• Mediahub named Valeria Mares as its executive vp of communications planning, a global position, hiring her away from Wavemaker U.S., where she was most recently head of content.
• Brandtech Group, formerly known as You & Mr. Jones, named Linsey Loy as its first chief growth officer, hiring her from Dentsu’s iProspect, where she was most recently as senior vp/head of growth. Loy is based in New York. 
• Horizon Media’s Blue Hour Studios launched what it said is the first upfront dedicated to the influencer industry, which it has dubbed the Infronts.

Direct quote

“I feel like independent agencies always make independence part of the reason when they win. If an independent agency lands on an award show list, they always thank their independence for getting them there. What’s interesting is those lists are also very inclusive of holding companies, and yet holding company agencies rarely thank the holding company. When we make the A List or Agency of the Year, I don’t go on that stage and say ‘I first would like to thank my parent company.’ And the reason for that is not because it’s a bad holding company. The truth is, they are so uninvolved in the way that I run my business, contrary to what independent agencies believe.”

—A holding company agency exec bemoaning a misperception among independent agencies of what it’s like to be owned by a holding company.

Speed reading

• I had an interesting conversation with Jellyfish Group co-founder and CEO Rob Pierre, who’s placed equal emphasis on understanding and working with the major platforms as with the holding company’s clients. 
• Digiday’s senior media editor Tim Peterson looks at the upside and downside of the continued interest in buying and selling TV time through the upfront process, which two years ago appeared doomed to extinction. 
• And gaming and esports reporter Alexander Lee delves into the degree of consumer interest in the metaverse, distinguishing from the hype heard in marketing departments across the country. 

But how do you manage a dispersed workforce coming back into an office building? If a company has 300 employees, but 20 are coming in on a Tuesday and 50 are there on a Wednesday and no one is there on Friday, the old way of having 300 designated seats for every employee every day doesn’t make much sense anymore. It can be a headache for company management to keep track of who is coming in when and how often (or unoften) people are using the office.

Enter workplace software companies — like Envoy, Condeco, Teem, Robin, OfficeTogether and OfficeSpace — that offer office “hoteling” services.

WTF is “hoteling” software?

“Hoteling software” refers to a platform employees can use to reserve a desk space in advance, like you would book a hotel room. The concept of hoteling (and hot desking) began for people working from coworking spaces or for those in roles like consultants who were moving around different clients’ offices and needed a space to work from. It’s since been adopted by more companies to manage hybrid workforces during the pandemic.

The term “hoteling” can sometimes be used interchangeably with “hot desking” — which makes the whole thing even more confusing. Those who work in workplace software often argue that “hot desking” refers to booking an unassigned space in an office (and physically finding a desk on a first-come, first-serve basis) while “hoteling” means reserving a specific desk. Most workplace software companies offer the option for companies to allow both.

How does hoteling software work?

Hoteling software companies range in the features they offer, but the gist is employees who want to come into their company’s office can download an app on their phone or go to a website to book desk space or a meeting room. 

Envoy, for example, offers a mobile app and website dashboard to book office space. Envoy can automatically assign employees a desk, or they can select one on their own. A virtual maps feature lets employees see who is working in the office that day and where they’re sitting. 

Companies can also set parameters, too. They can designate areas of the office for specific teams, and employees in those teams can choose a desk only in those areas. They can choose to allow employees to book desk space well in advance or only a few days before they want to go into the office — platforms like Envoy also let companies determine if they want employees to be able to book multiple days at once.

Employees can use hoteling software to ensure coworkers from their team will be in the office at the same time. For many, the whole point of working in an office is to see coworkers and to facilitate collaboration between employees. That’s a lot easier when other people are actually there at the same time you are, and the people there are the ones you actually work with directly. An employee might not want to bother commuting if very few people are working from the office that day and instead choose to come in on a day when more colleagues will be around. Or the opposite might be true — if an employee is concerned about the COVID-19 virus (or just wants a space to work from that’s not their home or a coffee shop), they may prefer to work in the office when it’s less occupied.

BuzzFeed is using the software company Envoy for check-in, desk reservations and other services, for example. So is Quartz, which started using Envoy when the company reopened its office to employees on a voluntary basis last summer. NBCUniversal, as well as media agency Dentsu, use Condeco to help manage their workforces.

Why are companies using hoteling software?

The simple answer: so employees can easily book a space in the office to work from.

The longer answer: data. Management has access to analytics to keep track of who is in the office and when. Employees can see how many people will be in the office on a given day, who is in the office on that day and where they will be seated. It beats having to email coworkers back and forth to coordinate schedules.

Company management can use hoteling software to see how often the office is being used by employees, which is an important metric to watch as companies consider the future role of office space. For example, business publisher Quartz learned the office was nearly empty on Fridays last summer, so the company decided to keep its office closed that day of the week.

However, the need for hoteling software might depend on the size and usage of the office, especially for those companies making it voluntary to come in at all. Vox Media (which recently acquired Group Nine) has found that because its offices are open at 50% capacity and people can voluntarily work from those spaces, hoteling software has not been necessary to reserve desks.

How are companies using hoteling software to manage a safer return to office during the pandemic?

Companies can use hoteling software to manage the health and safety of employees returning to the office as well. Since the pandemic, these platforms have added features to keep track of employees’ proof of vaccinations, COVID-19 test results and contact tracing. Envoy’s platform can determine who had close contact with an infected person based on who reserved a desk in close proximity to that employee, for example.

Envoy added these features in October 2021. Employees can upload a photo of their COVID-19 proof of vaccination or test results. At Quartz, the documents are reviewed and approved by an administrator before an employee can schedule their visit. Employees at Quartz also go through a check-in process, answering three to four health questions on the Envoy platform. Once that’s cleared, an entry pass is provided that can get the employee into the office.

Companies can set workplace capacity limits, which alert management when the office has reached capacity and can automatically stop more people from registering or signing in to prevent overcrowding. 

How much does hoteling software cost?

Pricing ranges based on the size of the company using the hoteling software services. Envoy has a free plan for companies that have fewer than 50 employees. From there, prices range from $99 a month to $299, and companies can choose to add more features for more money. At Condeco, pricing is based on how many people are using the platform, starting at $45 per user per year for companies that have 250-999 employees and $35 per user for companies that have 1,000-4,999 employees, with a minimum contract length of three years.

Will companies use these services long-term?

As long as the pandemic is around, hoteling software can provide employees with information that can help determine whether they want to go into the office on a given day, based on their individual preferences and health concerns. Company management can make decisions based on the data they gather from using hoteling software, such as the size (and importance) of future office spaces. As companies continue to open up their offices as the pandemic (hopefully) continues to wind down this year, it might even be the case that hoteling software becomes more widely adopted.

So far, Layered Clothing has been a hit among Roblox users.

“Layered Clothing is still a new technology, but so far it has been proving especially popular, with my sales at tens of thousands just a week after release,” said Arthur Trusov, a Roblox creator who has made over $1 million selling virtual clothing and has worked with brands such as Sonic the Hedgehog to develop assets within the platform. “It’s just that brands need to be more aware of the existence of Layered Clothing, and I’m very optimistic they will take advantage of that,” said Trusov. The proceeds of Roblox’s in-game sales are usually split between creators and the platform.

Some brands have already taken notice. After Virtual Brand Group, which licenses the rights to brands such as Forever 21 within virtual environments, spotted the development of Layered Clothing in Roblox’s developer forums, the company (and its stable of in-game creators) designed a line of Forever-21-branded clothes for sale the moment the feature went live. The move paid off: “Some of these are the top-selling items on all of Roblox,” said VBG CEO Justin Hochberg.

Virtual-first clothing brands are also using the rollout of Layered Clothing as a gateway into Roblox. The digital fashion brand DRESSX released its first line of 12 Roblox garments alongside the launch of the new feature and has already sold 26,000 of the items, which sell for 50 to 200 ROBUX (approximately 50 cents to $2 USD).

“They were developed for DRESSX initially, but then we took them to Roblox,” said DRESSX co-founder Daria Shapovalova. “Moving forward, we’re also planning to do some items specifically for Roblox.”

The feature has been available for beta testing since October 21, 2021, but it officially went live last week. Before Layered Clothing, accessories such as hats and scarves were the only items in Roblox that users could wear over their avatars; other Roblox garments were more akin to skins, simply changing the color and texture of avatars’ surfaces.

At the moment, the best-selling clothing items in Roblox are those that match real-life styles: simple black items, jeans and crop tops, T-shirts with pictures of cats on them. One of VBG’s black beanies was so popular that Forever 21 has made plans to manufacture physical versions for sale in brick-and-mortar stores.

Observers on both the creator and brand side anticipate that the freedom of creation fomented by Layered Clothing will eventually help users become more comfortable with physics-defying virtual clothes that take advantage of the more metaversal aspects of Roblox, à la “Ready Player One.”

“Players seem to like the outlandish or the normal — they don’t seem to like that middle ground,” said CoffeeNerd, another Roblox creator who requested anonymity. “They either want to be really out there, or how they would dress for school or work.”

As intriguing as these new designs might be, fashion brands in Roblox and other virtual platforms are only just dipping their toes in the metaverse by creating items similar to the ones they manufacture in the physical world. After all, the purpose of functions such as Layered Clothing is to increase the verisimilitude of Roblox’s virtual world — its appearance of being real — so creating designs that match physical garments is both a successful strategy and a lower lift for fashion brands.

And as brands kick up their involvement, the metaverse platforms that covet their dollars are sure to follow. It’s only a matter of time until other metaverse platforms such as Horizon Worlds and Fortnite introduce their own versions of Layered Clothing. (For now, Horizon Worlds avatars still don’t have legs, so it might be a while until pants come to the Meta-owned platform.)

“A series of incremental improvements or innovations will happen to get us to this level of personalization that we want, and Roblox and their ability to make this customizable layered clothing is another one of those incremental moments,” said Jason Steinberg, a managing partner at immersive marketing agency Pretty Big Monster.

“And even if this is only available in Roblox — well, now that puts pressure on every other provider of metaverses to layer in that same type of functionality. Once that pressure is on, that’s how we all move forward together.”

Absolut’s metaverse marketing is a first for parent company Pernod Ricard, one of the world’s largest makers of spirits and wine behind Diageo, as the company is just starting to test the space as a potential investment for its brands’ advertising and marketing, according to Pam Forbus, CMO of Pernod Ricard in North America. Through this experience, Absolut is looking to have a physical and virtual experience for attendees where what’s happening on the ground at Absolut’s Coachella tent is mirrored in a way in the metaverse experience. 

“Activations and festivals are definitely back,” said Forbus, adding that Coachella marks Absolut’s most significant return to experiential marketing since the beginning of the pandemic. By running a dual experience in-person and via the metaverse, people “who haven’t been able to travel can have a little bit of an experience at Coachella,” she added.

The return to Coachella with the in-person tent as well as the metaverse experience will account for 10% of Absolut’s annual marketing spend for the fiscal year of 2022. It’s unclear how much that will be as the company declined to share exact figures. In 2021, Absolut spent $892,500 on advertising placements, down from $3.2 million in 2020, per Kantar. Those figures exclude spending on social media platforms as Kantar doesn’t track that spending. 

Overall, Absolut doubled its media investment this fiscal year, according to the brand as it has put more of a focus on e-commerce over the last two years, with roughly 80% of the budget going to digital media channels including online video, display, search and social. The remaining 20% is dedicated to linear TV, out-of-home and audio. 

Finding ways to get into metaverse marketing or stand out by having a simultaneous experience in-person and in the metaverse makes sense for a brand like Absolut, according to Noah Mallin, chief strategy officer at IMGN Media. “For the brand, it is an opportunity for Absolut to be seen as innovative,” said Mallin, adding that while it may garner press, few people will actually try out the metaverse experience. “The translation of enjoying a drink into a virtual experience is still somewhere off in the future.” 

Making a return to experiential marketing via Coachella is a test and learn moment for the brand right now, per Forbus, as it is the only experiential marketing event on the books currently this year for the brand. In the past, Absolut parent company Pernod Ricard “spent a lot on in-store, in bars and at events,” said Forbus. “We will slowly bring events back, but probably not invest as much as we used to. We’re going to double down in media and marketing [going forward].”