How the supply chain problem will affect the advertising market

As an international network, do you see the differences between the Russian and global markets — what challenges are specific to our market?

Global and Russian Publicis are now very successful, as confirmed by the latest financial statements. The business model is working well, developing rapidly, and there is a good demand for it. The problem of more significant growth is determined only by many people, and, as we discussed above, it isn’t easy to find them quickly, so you have to raise and educate yourself.

Publicis Groupe earns 30% of its revenue globally through technology products, platforms, and solutions – practically an IT business. Epsilon and Sapient add value to media or creative development. But in Russia, the MarTech market is opaque and fragmented.

No one has solved the task of universal data onboarding; there are many reasons for this: regulatory and market immaturity. And this Russian specificity does not yet allow us to present a full-fledged local solution in the IT part, but we are looking for and experimenting.

The first signs are a project with the Digital Horizon venture builder and Rodnaya Speech, internal developments with teams from other regions, etc. We are considering options for purchases and acquisitions in data onboarding, e-commerce, retail, and performance media.

If everything goes well, we will announce it in a few months, but for now, at the conference, we will talk about new partnerships. The big downside is scaling. It is tough to find people just as quickly under the growing scale of the business – there aren’t so many. In our memory, there has never been a more socialist situation in the labor market than now in the whole world.

Today, any marketing channel (Instagram, TikTok, etc.) can not only sell a large number of your products but also work with loyalty. How did you start selling? Have you built a supply chain for this? Do you have a department that does this with the appropriate KPIs?

The Growth approach presented at our conference is the central element. This is a set of marketing tools that allow, on the one hand, to effectively and quickly find insights, maximize the value of working with first-party data and work with Real ID in media where third-party cookies have died or will soon die.

How are agency products and processes changing?

This year, the main innovation in Publicis Groupe Russia’s integrated Strategic Lab (strategic laboratory). Media and communication strategists are united in one department and certified by CMJ (Customer Journey Map).

Thanks to this, we offer our customers an integrated product. Business tasks are initially laid out according to the CMJ of different cohorts, then media planning and creative ideas are the answer to the real pain of each consumer group. Strategic Lab is built along industrial verticals (FMCG, Fintech, etc.) so that strategists can speak the same language with clients, understanding the specifics of their category.

The process has not yet covered all the group clients, but it is a 100% success wherever it is implemented. Again, the question arises with scaling the number of intelligent heads that need to cover our client list and new business.

Publicis Groupe launched the Power of One model four years ago, what has changed?

Examples with built-in processes are P&G, McDonald’s, and GSK. But there are clients at different stages of integration; now, more than 50% of our business is organized by Power of One leader. Two weeks ago, you saw the result of our work with Beeline, where we proved our advantage one by one – first in a creative tender, then in a media one.

Our value lies in integrating creativity, media, production, and data. This is an essential advantage for those customers who need a fast, proven, and scalable solution. Therefore, they choose us, see a model that works on a large business, and understand it is convenient.

Many talks about the decline of the era of advertising agencies, the growth of in-house, competition from ecosystems – how do you see the future of the group?

Our model is essentially the answer to in-house. We will never know the fundamental economics of in-house projects on the market. And, even though in-house solves issues of speed and convenience, it is an expensive pleasure that only a few can afford.

Our offer is a team created for the client’s business tasks with understandable business KPIs and worth competitive money. It is challenging to motivate and keep your department in good shape, but everyone always succeeds in encouraging agencies.

Any marketing cannot exist and remain professional without a competitive environment. People quickly get tired, burn out and start to get lazy; it is very difficult to keep a bright spark inside the client’s in-house.

If we talk about competition between ecosystems and agencies, orchestration is in our favor. Ecosystems grow and compete, but what should a brand do? Who will present it?

It is unrealistic to build an in-house for everyone; there are not enough people on the market, even for advertising groups. And, as I said, customers have growth points outside of ecosystems, which we will talk about in more detail at the conference.

Three challenges that advertising agencies will have to solve in 2022?

I will not answer for everyone, but only for us – Publicis Groupe. The first is people, the main asset and a big problem. To do this, we automate internal processes to relieve employees. Freedom and trust are our corporate identity.

The second is solving the problem of universal data onboarding and working with real ID. Thirdly, there is no limit to the perfection of the media offer, especially in digital content, performance, e-commerce, and retail media. Total: people, real ID, and an integrated approach.

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