As a loyal reader, we wanted to share a special preview of two of Digiday's weekly briefings. Available exclusively to Digiday+ members, the Marketing Briefing and the Media Buying Briefing offer analysis of the news and trends affecting marketers and advertisers, interviews with key executives, numbers to know and much more.
In this week's Marketing Briefing, senior marketing editor Kristina Monllos explains the implications of state governments starting to lift COVID restrictions as marketers begin to focus on regionality.
In our latest Media Buying Briefing, Michael Bürgi looks at the reasons agencies may decide to buy themselves back from holding companies and when they can actually go about doing so.
Get a taste of both briefings below and subscribe to Digiday+ to have them delivered straight to your inbox every week. For a limited-time, become a Digiday+ member and save 40% on your first three months. This special offer ends Friday, March 26.
Marketing Briefing: As Covid-19 restrictions ease in some states, marketers focus on regionality
By Kristina Monllos
Earlier this month, Texas Gov. Greg Abbott lifted the state’s mask mandate, leaving company owners and employees with the difficult task of enforcing masks — should they choose to do so — at their private businesses. Texas is one of several states easing Covid-19 restrictions in recent weeks as vaccination efforts have ramped up across the country.
Marketers have had to plan around understanding how a state or region is reacting to Covid-19 over the last year. Marketers and agency execs say that will continue to be the case for the coming months, even as the vaccine rollout continues.
“Our clients are still very attuned to the fact different parts of the country are re-opening at different paces and we need to create marketing plans that account for that,” said Abbey Klaassen, president of 360i. “There has always been an element of locality in marketing — states have different regulations, prices can vary depending on locations, and so forth — but Covid has increased the number of variables such as capacity levels, mobility of the population, and just generally norms and comfort levels of different populations.”
Covid has forced marketers to have multiple plans in place with built-in flexibility, both of which are expected to continue as different states will be in varying phases depending on vaccination efforts and Covid restrictions, according to agency execs. At the same time, understanding what post-Covid consumer behavior looks like at that moment per geographic region will be key.
“Throughout 2020, experiences were so different depending on what part of the country you’re in and what phase of lockdown,” said Kari Shimmel, chief strategy officer at Campbell Ewald. “2021 is continuing to do that. You still have big moments that continue to evolve. Because we’ve had such a hyper-focus on audience relevance, [how a state is doing with Covid] is inherently going to affect how we approach this.”
Marketers have tried to understand the audience of a region for decades, but Covid added a new layer of understanding, according to buyers. Now, as states vary and waffle back and forth on easing restrictions, understanding where consumers are and what they are comfortable with is necessary.
“A population’s level of comfort or personal norm can vary even within a region or state or metro area,” said Klaassen. “Am I comfortable grocery shopping or do I want to do curbside? Will I dine indoors or do delivery? Am I commuting five days a week or have a more flexible work-from-home scenario?”
Klaassen continued: “While today that might be informed by Covid-19 rates or vaccine rollouts, we see that level of individual preference continuing post-pandemic, due to convenience and habit. So we are more focused on creating more personalization of our messages across the board. How do we meet consumers in the moment?”
Even as the potential end of the pandemic nears, some believe that the shift marketers will have to grapple with isn’t the regionality issues caused by Covid-19 but the long-term consumer behavior shifts — like the rise in e-commerce or the prevalence of curbside pick-up — that were accelerated by the pandemic.
“The real impact of Covid wasn’t shifting focus from national to regional plans,” said Dick Weschler, CEO of media agency Lockard and Wechsler Direct. “The impact was on consumer behavior. Five years of consumer behavioral evolution took place in around five minutes.”
Weschler continued: “These behaviors are not likely to change as Covid restrictions ease. And the direct-to-consumer marketing efforts that have been put in place to support these, in both national and regional efforts, will continue based on their success moving forward.”
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Media Buying Briefing: When and why agencies buy themselves back from holding companies
By Michael Bürgi
Though you can’t call it a stampede, over the last few years a handful of agencies, media and full-service, took the step to buy themselves back from holding companies — either to be fully owned or to regain majority ownership. In practically every case, the driving motivation was control of one’s own destiny, despite the loss of access to technology, networking connections and clout.
Johannes Leonardo in 2019 bought back majority control of itself from parent WPP, ostensibly to avoid getting smashed together with another agency against its will — as WPP was doing at the time. And Atlanta-based full-service shop Fitzco bought itself back from owner IPG last year after its founder Dave Fitzgerald came out of retirement to run the agency again —and knew he wanted to be his own boss rather than answer to corporate.
IPG has done a bit more selling of late than the other holding companies, having also relinquished majority control in October 2020 of multicultural shop Casanova/McCann, though as the name implies, IPG retains a minority stake. It also divested of now-shuttered Temerlin McClain back in 2017.
Ingrid Otero Smart, Casanova’s CEO, admits she was looking for the best of both worlds. “We got our independence, but we still have an affiliation with McCann, so we have access to tools and resources that, as a fully independent agency I would not be able to afford,” said Smart. “I worked years ago at a small, independent agency and we didn’t have access to training or the many resources — we had to make it on our own.”
Fitzgerald said he’s glad to be free to make his own decisions again. “Our time together [with IPG] went very well. I had a lot of bosses and most of them were good,” he said. “But if your agency is doing well, but the holding company’s agencies in, say, southeast Asia aren’t doing well, you’re not allowed to fill those two open positions you have. It worked well, until it didn’t several CFOs later.”
Douglas Wood, senior counsel of the Entertainment & Media practice at Reed Smith, who’s handled many agency buybacks over the years, pointed out that holding companies have parted ways with more creative-leaning agencies in part because, in the digital age, they’re not the cash cow they once were. “I kind of lament that media put creative in the back seat, but if you’re a creative shop, you may not be as important” to a holding company, said Wood.
Casanova’s Smart said it’s possible, given the rise of awareness and importance around multicultural issues in society, other multicultural agencies under holding company umbrellas might seek more independence as Casanova did. “We need to champion the consumer in a way that’s harder to do when you’re part of a larger network,” she explained. “Every dollar that the client places through [holding company agencies] doesn’t count toward any kind of multicultural small-business goals. We had to do it, and for our clients it’s a big benefit.”
In the end, independence and freedom are just more alluring, said Fitzgerald. “Every model of ownership is fraught with its own problems, whether it’s a holding company, private equity, venture capital or even your father-in-law.”
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