What if Stories are Brain Code?

The boy on the wall

From Hollywood to the marketing industry we’re told that stories resonate with us. They are the reason why films, books, video games and TV dramas entertain. According to storytelling theorists like Joseph Campbell; we find fulfilment understanding what is happening. Campbell et al think that our enjoyment of stories analogous to the enjoyment of solving puzzles. What if stories can be more than puzzles for our enjoyment?

Our understanding of storytelling

Our understanding of storytelling is of a more tenuous nature than Newtonian physics or organic chemistry. You could argue that Joseph Campbell was a ‘victim’ of his discipline. He worked in the fields of comparative mythology and religion. Campbell was looking for universal patterns in stories. He assumed that rest of us are as well. Though this ‘understanding’ would be occcuring at a ‘low level’ in computing terms. Only select (mostly educated) people would think of it at a higher conscious rational level.

Like many academics in the early and mid-20th century his work drew inspiration from eastern religions. In Campbell’s case, like Nietzsche; he drew from Hindu thought. Campbell’s interest in Indian philosophy was due to a meeting. In 1924, Campbell encountered the messiah elect of the Theosophical Society. He was on a cruise liner from Europe to the US. Campbell was also profoundly affected by Nietzsche’s work.

  • Did Nietzsche open Campbell to Indian philosophy or was it the other way around?
  • Was it just the nature of a naturally enquiring mind?
  • Were there factors that made him more open to it?

Campbell based his theories on myth and its connection to the human psyche in part on Sigmund Freud. Campbell’s myth concepts drew on Jung’s dream interpretation methods. Jung’s insights into archetypes drew from The Tibetan Book of The Dead. Campbell quotes Jung on The Tibetan Book of The Dead in The Mythical Image:

“belongs to that class of writings which not only are of interest to specialists in Mahayana Buddhism, but also, because of their deep humanity and still deeper insight into the secrets of the human psyche, make an especial appeal to the layman seeking to broaden his knowledge of life… For years, ever since it was first published, the Bardo Thodol has been my constant companion, and to it I owe not only many stimulating ideas and discoveries, but also many fundamental insights.”

(Bardo Thodol is another name for The Tibetan Book of The Dead). A lot of this hinges on the value of dreams. Heres what Dream interpretation and false beliefs has to say. It was published in the journal Professional Psychology: Research and Practice in 1999:

“Dream interpretation is a common practice in psychotherapy. In the research presented in this article, each participant saw a clinician who interpreted a recent dream report to be a sign that the participant had had a mildly traumatic experience before age 3 years, such as being lost for an extended time or feeling abandoned by his or her parents. This dream intervention caused a majority of participants to become more confident that they had had such an experience, even though they had previously denied it. These findings have implications for the use of dream material in clinical settings. In particular, the findings point to the possibility that dream interpretation may have unexpected side effects if it leads to beliefs about the past that may, in fact, be false.”

This doesn’t necessarily invalidate Campbell’s theory in terms of storytelling. But it seems to cast doubt on the application of Jungian dream interpretation for clinical use. The best advice that I can give in this matter is caveat lectorem.

From Academia to Hollywood: formulaic stories

 

Joseph Campbell was a prolific author.  He published material that went into over 40 books. Part of this was due to the efforts of the Joseph Campbell Foundation, which collected his papers and published a number of work after his death. These included: coverage of his academic work, travel diaries and even his personal philosophy. It was picked up on by the American public, which has been endless quoted and misinterpreted due to the phrase ‘follow your bliss’.

The key work of Campbell was his 1949 work The Hero With A Thousand Faces. it was his first solo work and got him recognition outside academic circles. The central them is that ‘myths’ from around the world all share a common structure. This is what Campbell called a ‘monomyth’. The monomyth or hero’s journey was mapped out visually on Wikipedia

heroes journey

Campbell went on to propose the purpose of these myths which he grouped into four functions. Wikipedia described it thus:

The Metaphysical Function – Awakening a sense of awe before the mystery of being The Cosmological Function – Explaining the shape of the universe The Sociological Function – Validate and support the existing social order The Pedagogical Function – Guide the individual through the stages of life

Campbell’s work went on to influence luminaries of the 1960s counterculture movement including Jerry Garcia of the Grateful Dead and Jim Morrison. It’s obvious influence in film kicked in around the same time. Stanley Kubrick introduced it Arthur C. Clarke. This happened during their collaboration to turn Clarke’s short story The Sentinel into 2001 A Space Odyssey screen play and book. George Lucas’ role in the popularisation of Campbell’s work was probably the biggest single effect. Hollywood at the time was in a state of dramatic change. This change mirrored the kind of change that the punk ethic and independent labels wrought on the music industry a decade later. Artistic and cultural change, further globalisation of artistic culture, new motion film camera technology and the rise of television created a set of factors that helped facilitate the rise of New Hollywood. The initial success of these director-driven films allowed power shifted from the producers to the studios for a time.

  • Directors drew on foreign influences: new wave cinema, Japanese cinema
  • The MPAA ratings system allowed more adult subjects to be discussed that would have otherwise been taboo
  • The Panavision Panaflex camera provided a more compact way to shoot on 35mm film. This facilitated greater use of location shooting, providing a more naturalistic style and also facilitated Lucas’ special effects in Star Wars

Whilst Lucas was part of this movement; both THX 1138 and American Graffiti, fit within the New Hollywood genre. But like Stephen Spielberg, Lucas unwittingly created the next stage in movie development that helped producers take back their seat of power. Star Wars became a blockbuster. Though the ingredients were very different to the corporate creations of Marvel Studios or the Transformers franchise.

Its homage to the chambara films of Akira Kurosawa, pre-war Flash Gordon episodes and vintage westerns smacked of New Hollywood. It’s blockbuster status meant that the industry paid attention to valuable lessons learned. George Lucas became the first film maker to publicly cite The Hero With a Thousand Faces and other Campbell works as influences. Lucas repaid the creative debt that he owed to The Hero With A Thousand Faces by allowing Bill Moyes to shoot a series of interviews with Joseph Campbell  at Skywalker Ranch.

Campbell and storytelling theory then became baked into Hollywood’s DNA. Over time it came into marketing, firstly through the creative side of the advertising industry. Television advertising at the time borrowed creative direction and stories from movie expertise. Directors like Tony Kaye and Ridley Scott moved between advertising and film projects. Eventually storytelling moved through other parts of the marketing industry including public relations. Hollywood have taken a number of turns at further refining Campbell’s monomyth model.

One has to note that their goals are different from Campbell’s research. Hollywood largely seeks to entertain (for profit) and getting the viewer to suspend disbelief for the duration fo the movie or TV series rather than  achieving one of Campbell four functions.

Different cuts on the hero's journey

Volger is commonly cited by modern script writers. He refines and expands the thinking around the monomyth. Volger puts more emphasis than Campbell on the hero’s change in emotional state and internal journey.  His emphasis on emotion is important when one is creating content to land brand messages and would be of interest to the advertising community. The biggest area of disagreement that many have with Volger’s approach is that his structure implies a steady change in emotional state and internal journey of the hero. A paradigm shift in state would possibly create greater dramatic tension for the viewer.

From monomyth to winning algorithm.

Technology has moved from the creative process of film making an into the commercial side of the process. The movie industry is supporting machine learning based startups like ScriptBook. Belgium-based ScriptBook analyses screen plays to produce forecasts before a film is put into production. ScriptBook provides a box office earnings forecast, likely MPAA rating and recommended market demographics. Of course, many classic films had screen plays that were altered or completely rewritten several times. The tortured overworked scriptwriters working miracles in really short times and ‘script doctors’ called into ‘fix’ a bad situation. Both are part of the Hollywood system and its own mythology. In many respects ScriptBook mirrors the marketing industry’s move towards the adoption of predictive analytics for consumer behavioural change.

How stories work for the brain.

Behavioural scientist Nick Chater has roughly two decades of published academic work behind him based on research in various aspects of cognitive science. He has a depth and credibility to his work that we currently don’t have  on people and storytelling.

In his book The Mind is Flat, Chater posits that the mind doesn’t have conscious and unconscious aspects. Emotions aren’t hard wired, instead thoughts and feeling are created on the fly. This effectively invalidates Freudian psychology principles. Our inner voice is effectively our brain telling storytelling to itself.  Our identities are constructed and given shape on the fly by the stories that we tell to ourselves as we go along. The unconscious mind would appear to be a conceit about our depth.

This brings to mind the final episode in season two of Westworld, where the systems who had been trying to replicate humans realised their challenges. They had assumed humans were complex in nature, where as the show claims that they can be replicated in 10,247 lines of code, with definite limits on their potential. Of course 10,247 lines of code, whilst less than Photoshop could have a world of fractal complexity.

Essentially there is no ‘deeper’ language than storytelling. Stories aren’t only about rules and plot consistency, but about creative leaps.

This means from a marketing perspective whilst if we get stories right, they can be more powerful than we had previously imagined. In computing terms we would be writing direct the processor or ‘hitting the metal’ as games programmers would call it. It also needs to take into account that getting great stories is really hard.

It also casts more questions about whether we have learned the right lessons to date about storytelling from the likes of Joseph Campbell?

More information

Joseph Campbell – The Mythical Image
The Tibetan Book of The Dead
Mazzoni, G. A. L., Lombardo, P., Malvagia, S., & Loftus, E. F. (1999). Dream interpretation and false beliefs. Professional Psychology: Research and Practice, 30(1), 45-50.
The Hero With A Thousand Faces by Joseph Campbell
Hero’s Journey – Wikipedia
2001: A Space Odyssey by Arthur C Clarke
The Writer’ Journey by Christopher Volger
Artificial Intelligence Might Affect How Studios Greenlight Movies | Cinemablend
Artificial Intelligence Could One Day Determine Which Films Get Made | Variety
ScriptBook “Hard science, better box office” and Crunchbase profile
This Man Says the Mind Has No Depths | Nautilus
The Mind is Flat: The Illusion of Mental Depth and The Improvised Mind by Nick Chater
‘Westworld’ Season Finale Recap: Code Unknown | Rolling Stone Online

Recommendations for a marketers bookshelf

Books

My recommendations for a marketers bookshelf is based on my own reading. My own experience is very consumer, brand communications and behavioural change focused. Here’s some recommendations, they aren’t in a ranking or grouped in a particular order.

Insights, planning and strategy

Most marketing communications projects are trying to create some sort of behavioural change in the audience, so understanding more about persuasion has got to be a pretty handy thing right? Robert Cialdini  has two great works:

How Brands Grow part 1 and part 2 – pretty much the modern marketers bible for B2C brands of various stripes. Byron Sharp distills down decades of evidence-based research that has been carried out by Ehrensberg-Bass Institute of Marketing Science attached to the University of South Australia. The research institute has got a who’s who of corporate sponsors supporting their work and using their data:

  • General Mills
  • Grupo Bimbo
  • Procter & Gamble
  • Red Bull
  • Unilever

You get the idea. If the research is good enough for these brands, it’s good enough for you.

A key part of planning is working out that insight which will speak to your target consumers. Trends books are sometimes a handy short cut to creating a first draft of a hypothesis. You can do worse than leave through pollster Mark Penn’s Microtrends, Microtrends Squared and Microtrends Cubed that he has built up. If you’re thinking about transformation then Kevin Kelly’s The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future is the Microtrends for digital transformation. Tom Doctoroff’s What Chinese Want: Culture, Communism, and China’s Modern Consumer – is a another great primer.

The Long And the Short of It by Les Binet and Media in Focus: Marketing Effectiveness in the Digital Era. Binet is a respected communications planning expert, he is currently head of effectiveness at Adam & Eve DDB. He has published some of the best works on marketing effectiveness for the IPA.

If you studied marketing in college David A. Aaker is probably a familiar name. His Strategic Marketing Management book is often an introductory core course text. It used to double as a doorstop in a lot of dorm rooms that I visited. If you want to refresh your memory on branding he has written an accessible primer to recharge long lost lecture memories: Aaker on Branding: 20 Principles That Drive Success.

Truth, Lies and Advertising – Jon Steel’s work on account planning is that rare thinking; a very readable text book. I like to go back to it to boil things down to first principles and forget complexity.

Inspiration

When you’re looking for inspiration, there are two good approaches:

  • Go lateral. Brian Eno and Peter Schmidt’s Oblique Strategies isn’t a book, but a set of 100 cards. Eno periodically suffered writers block in the studio and these cards are a successful approach that he developed over time with collaborator Peter Schmidt. It also works for finding your way through planning
  • Look back into time. If you are looking back into time, I would recommend Sun Tzu’s The Art of War if you are looking for inspiration on strategic approach. Buy the cheapest copy that you can get in print. Mine is covered in post-it notes and scribbles in the margins. More expensive versions have ‘business thought leaders’ trying to reinterpret it for you and just end up muddying the water. Those 13 chapters are well worth visiting on a regular basis. Bill Bernbach’s Book is a source of inspiration; as is the better known Ogilvy on Advertising by David Ogilvy
Communications

How To Write A Thesis by Umberto Eco. I know what you’re thinking: ‘Ged have you lost your marbles, why would I care about writing a thesis?’ Eco’s book is a really good guide to collecting one’s thoughts and presenting facts gained through a comprehensive research process. As the old martial arts mantra goes: slow is smooth, smooth is fast. Whilst Professor Eco isn’t a marketing scholar he knows a lot about thinking and being cogent.

Ok, you’ve distilled all the knowledge from the rest of the books in this list, along with desk and possibly primary search.  You are ready to present your killer ideas to the client, or internal decision makers. Jon Steel has got you covered. Perfect Pitch: The Art of Selling Ideas and Winning New Business is a great refresher that helps shake you’re presentation game up.

What books would add? If you have additional recommendations, put them below in the comments section.

The influencers post

Mark Ritson wrote an op-ed over at Marketing Week on influence and influencers. Whilst it lacked nuance on the subject area, a lot of what it said is true. Go over and have a read; I’ll be waiting for when you come back.

Whilst I disagree on the finer points, what Ritson wrote needed to be said. There needed to be a turning of the tide on influencers from boundless optimism to a greater degree of sobriety and critical analysis of the influencer opportunity.

I first noticed this boundless optimism when I attended the In2 Innovation Summit in May last year.  Heather Mitchell on a panel. Mitchell worked at the time in Unilever’s haircare division where she is director, head of global PR, digital engagement and entertainment marketing. I asked the panel discussing influencer marketing about the impact of zero-based budgeting (ZBB) and the answer was ducked. ZBB requires a particular ROI on activity, something that (even paid for) influence marketing still struggles to do well.

This was surprising given the scrutiny that other marketing channels were coming under, I couldn’t understand how influencer marketing merited that leap of faith.

This time last year I noted:

Substitute ‘buzz marketing’ for ‘influencer marketing’ and this could be 15 years ago. Don’t get me wrong I had great fun doing things like hijacking Harry Potter book launches when I worked at Yahoo!, but no idea how it really impacted brand or delivered in terms of RoI. Influencer marketing seems to be in a similar place.

Just five years ago we had managed to get past the hype bubble of social and senior executives were prepared to critically examine social’s worth. In the meantime we have had a decline in organic reach and massive inflation in both ad inventory and influencer costs. What had changed in the marketers mentality?

Onward with Mark Ritson’s main points.

Ritson’s Three Circles of Bullshit

A very loose reference to Dante Alighieri’s Divine Comedy trilogy; but for modern marketers

The First Circle of Bullshit: Are the followers real?

  • Are they bots?
  • Are they stolen accounts?
  • Are the user accounts active any more?
  • Has the account holder padded their account with bought followers and engagement. Disclosure – I ran an experiment on my Twitter account and still have a substantial amount of fake followers. More on this experiment here.

The Second Circle of Bullshit: Are influencers trusted?

  • Ritson did an unscientific test that showed (some) influencers would post anything for a bit of money

The Final Circle of Bullshit: Do they have influence?

  • Some influencers are genuinely authoritative; but this is a minority of influencers out there
  • Ritson alludes to the lack of organic reach amongst an ‘influencers’ followers which is likely to be 2% reach or less
Trends in influence

I looked at Google Trends to see what could be learned in the rate of change in searches over time. Consider Google Trends to be an inexact but accessible measure of changes in interest over time.

Global interest in influencers have been accelerating

Influence: Google Trends

There has been a corresponding rises in interest around paid influencer marketing

Influence: Google Trends

There hasn’t been the same interest peak in organic (PR-driven) influencer work

Influence: Google Trends

All of which supports the following hypotheses:

  • it’s become on-trend from the perspective of marketers, agencies and ‘influencers’
  • A significant amount of influencers are in it for the money – which brings into question their (long term authority and consumer trust)
  • A significant amount of influencers have an exceedingly good idea of their value (more likely overly-inflated)
  • Ego is less of a motivator for becoming an influencer than material gains
What would influence look like?

Propagation of the content by real people. Instagram, a particularly popular influencer channel, has made sharing posts difficult for followers historically. Re-gramming was a pain in the arse for the average Instagram user.

Slide4

If we look at the mainstream media and how it is shared on Facebook we see that only five media brands are consistently in the top ten most shared media properties. ‘Traditional’ influencer status isn’t necessarily a garrantor of consistent successful propagation either, if Newship’s data is to be believed.

Attributed sales. Some luxury brands in China have had success collaborating with influencers and selling through their channels; the post child being Mr Bags collaboration with Longchamps.

How is the best way to use influencers in marketing?

Assuming that you are using influencers in the widest possible sense at the moment.

Treat the majority of influencers as yet another advertising format

That means that reach, the way the brand is presented, and repetition are all important – smart mass marketing following the playbook of Byron Sharp.

  • Viewing your influencer mention in that prism, it means estimating what the real reach would be (lets say 2% of the follower number as an estimate) and paying no more on a CPM rate than you would pay for a display advertising advert
  • Ensure that the brand is covered in the way that you want. Some luxury brands have managed to get around this by keeping control of the content; a good example of this is De Grisogono – a family-run high jewellery and luxury watch brand. They work with fashion bloggers that meet their high standards and invite them to events. De Grisogono provides them with high-quality photography of its pieces and the event. They get the  high standard of brand presentation which raises the quality of the placement
  • Get repetition with the audience by repeating the placement with other content that delivers the same message with the same high standard of production

All of this might work for a luxury brand, IF you found that the amount of agency time and creative work made commercial sense. It is less likely to work for normal FMCG brands. What self-respecting influencer is going to be bossed around by a breakfast cereal?

Thinking about micro influencers, probably the area that has had the most interest from marketers recently due to them appearing to be better value than macro influencers.

Brown & Fiorella (2013) explanation of micro-influencers:

Adequately identifying prospective customers, and further segmenting them based on situations and situational factors enables us to identify the people and businesses – or technologies an channels that are closest to them in each scenario. We call these micro-influencers and see them as the business’s opportunity to exert true influence over the customer’s decision-making process as opposed to macro-influencers who simply broadcast to a wider, more general audience.

Brown & Fiorella focus on formal prospect detail capture and conversion.

This approach is more likely to work in certain circumstances; where there is low friction to conversion (e-tailing for discretionary value items).

It starts to fall apart when you deploy their approach to:

  • Consumer marketing
  • Mature product sectors
  • Mature brands

You would also struggle with many B2B segments where social provides a small reach and little social interaction.

Work with real influencers on long term collaborations
  • There is more likelihood of having audience trust if they can see and understand the long term relationship between a brand and its influencers
  • Better brand placement easier, with an influencer that ‘gets’ the brand
  • You’ve got a better chance of being able to get access and fully understand the underlying analytics of their accounts (which should be a prerequisite for long term relationship)
  • You can look at collaborations and attribution payment models that raise all boats
  • You can lock out rivals out of relationships
More information

Mark Ritson: How ‘influencers’ made my arse a work of art | Marketing Week
Edelman Digital Trends Report – (PDF) makes some interesting reading
Instagram Marketing: Does Influencer Size Matter? | Markerly Blog
Influence Marketing: How to Create, Manage and Measure Brand Influencers in Social Media Marketing by Danny Brown & Sam Fiorella ISBN-13: 978-0789751041 (2013)
Facebook Zero: Considering Life After the Demise of Organic Reach
Quantifying the Invisible Audience in Social Networks – Stanford University and Facebook Data Science
PLOS ONE: Detecting Emotional Contagion in Massive Social Networks by Lorenzo Coviello,Yunkyu Sohn, Adam D. I. Kramer,Cameron Marlow, Massimo Franceschetti, Nicholas A. Christakis, James H. Fowler
Senior Execs Not Convinced About Social’s Worth | Marketing Charts
Measuring User Influence in Twitter: The Million Follower Fallacy – Cha et al (2010) – (PDF)
Visualizing Media Bias through Twitter. Jisun An. University of Cambridge. Meeyoung Cha. KAIST. Krishna P. Gummadi. MPI-SWS et al – (PDF)
Mr. Bags x Longchamp: How to Make 5 Million RMB in Just Two Hours | Jing Daily
It’s time that we talk about micro-influencers

The limits of the IPA’s The Long And The Short Of It

This started with a blog post that talks about the IPA’s The Long And The Short Of It (TLATSOI) role in the planning and strategy process of the ad industry.

Thermometer

The Long And The Short Of It Needs The Wrong And The Shit Of It. Feel free to go and have a read and come back.

TL;DR

The IPA’s original research had flaws in the methodology:

  • Focusing purely on successes brings in biases due to the research being taken out of context. Context provided by the ‘complete’ population of good, mediocre and awful campaigns rather than award winners
  • There aren’t any lessons on how not to truly mess up
TLATSOI isn’t a LinkedIn article

Its easy to throw shots over the table when someone has done a lot of work. TLATSOI isn’t an article on the ‘five morning habits of Warren Buffet’ to make you successful.

Les Binet and Peter Field analysed 996 campaigns entered in the IPA Effectiveness awards (1980 – 2010). That would have taken them a considerable amount of time to do. They then managed to write it all up and distill it down into a very slim volume on my bookshelf.

The work is an achievement and Binet & Field deserve our gratitude and respect. Secondly, other marketing disciplines don’t have their version of TLATSOI. We couldn’t critique TLATSOI if it didn’t exist.

Let’s say we want to stand on their shoulders and build something more comprehensive than TLATSOI. Just what would it take?

Working with what you have

Binet and Field worked with what they have. If you’ve ever written an award entry you’ll know pulling it together is a pain in the arse. 996 award entries represents thousands of weeks of non-billable agency time. This was also strained through their empirical experience in the business, which adds a ‘welcome’ bias.

Now imagine if that kind of rigor in terms of documentation and analysis was put into mediocre campaigns. The kind of campaign where the client logo barely makes into the agency credentials deck.

Without a major agency (nudge, nudge, wink, wink BBH) providing all their warts-and-all data, the initative won’t start.

It will be hard to get what is needed. Agency functions aren’t geared up to deliver the information. A technological solution would take a good while to put in place; and like all IT projects would have a 70% failure rate.

In an industry where careers are made and talent attracted on ‘hits’; theres a big chunk of realpolitik to address.

How would you keep a lid on the dirty laundry?

We live in a connected world. To the point that there are now likely to be four certainties. Birth, death, taxes and data breaches. Imagine a data dump, some Excel skills and what was a bit of snark would do to an agency’s reputation? The stain of an ad agency equivalent of the movie industry Gold Raspberries would likely bury careers.

What do we measure?

My friend Rob Blackie started some of the thinking on effectiveness data SLA tiers

A = Tests the objective directly using a Randomised Control Test (RCT) in a real world environment (e.g. measured at point of sale).
B = RCT tests of proximate objective (e.g. brand), direct measurement of impacts without correction for population bias or confounding factors (e.g. a sunny week drives a lot of ice cream consumption). Or case studies (independent), quality survey data on changes in behaviour, testing in an artificial environment. For instance a Nielsen Brand Lift study
C = Case studies (non-independent), data sources that may contain significant bias compared to the underlying population. For instance: Award entries.
D = Indicative data such as PR coverage, social media Likes and similar.
E = Anecdotes. Extra points for quality, and reproducibility across different suppliers / evaluators.

There are challenges capturing long-term branding factors such as advertising ‘ad stock’ or ‘carryover‘. That then takes you into fundemental questions:

How long is the minimum viable time of campaign duration to be considered for assessment?

How long should we be measuring long term branding effects? How do you measure ‘clientside’ quality issues:

  • Resourcing / budgets
  • Product
  • Ambience in the case of client-owned channels
  • Adequate quality briefs. Are the objectives written well? Are they relevant to the business
  • Mission creep or changing company agendas

All of this means that getting to the greater volume of poor campaigns as well as the best is easier said than done. The best way to kick it off would be having large agencies to work together on putting together data sets.

The biggest Public Relations agencies; stuckness and market dynamics

Untitled

The Holmes Report came out with their top 250 (biggest) PR agencies around the world in terms of billings. I decided to delve into the numbers for financial years 2014 – 2017.

Macro picture

What the numbers suggested at a macro level were three things:

    • Overall billings growth was declining year on year
    • The amount of agencies that were appointed into the top 250 (and were dropped) declined year on year. There is less market disruption

Aggregate billings growth & top 250 list churn

    • The bottom 190 agencies (by size over successive years) accounted for less than half the billings of the top 25 for financial year 2017

Bottom 190 out top 250 PR agencies billings

Top 25 out of top 250 Pr agencies

This supports a hypothesis of slowing market growth and solidifying market dynamics at a macro level. Strategic acquisitions start to make less sense compared to improving efficiences and effectiveness. But if you were going to buy an agency MC Group in Germany looked to be the stand out choice in terms of changing the fortunes of a large agency billings

We’re also seeing a likely tyranny of large numbers kicking in for the biggest agencies. Mid-sized agencies can be more agile due to less layers of management and less complex environmetns to worry about. They may be multi-market; but they’re not truly global. Which makes strategy and planning much easier.

PR agencies are people businesses. At the core they sell manpower by the hour. Bigger agencies have more people, which means a greater management overhead, not unlike Fred Brooks’ The Mythical Man-Month essays on software engineering. There are more processes, which have built up over time and greater inertia to change. Then you get office and intra-office real politik. You can try and keep this down, but it is a function of scale; the battle against it becomes ever harder and you can only focus on its worst excesses. It tends not to surface when its impact only goes downwards in the management structure.

Agency-specific hypothesis

This next part was inspired by David Brain’s post on the performance of large agencies.

PR seems to be acquired in a more tactical manner than previously. This has been happening for a number of reasons.

A decline in Full Metal Jacket syndrome in comms planning. This nonsensical quote about Vietnamese people in Full Metal Jacket makes similar false assumptions. I’ve seen similar false assumptions in past global comms campaign planning that I have seen. Usually that meant creating something in the US and then expecting it to work on a fraction of the budget elsewhere. This means that there is less international work for agency networks. This has a negative impact on inter-office best practice transfer and building relationships.

The influence of Byron Sharp. For many consumer marketers, How Brands Grow – based on years of marketing science research is the bible. When you look at Sharp’s work there are a couple of clear points when you use public relations as a tactic.

Zero-Based Budgeting

Zero-based budgeting (ZBB) has changed the marketing planning game. It pits public relations campaign efficiency and effectiveness versus other disciplines in sharp focus. In addition, some organisations have mistaken ZBB as a one-way ratchet tightening marketing spend. ZBB isn’t about continual cost-cutting, but continual optimisation – something that seems to have been lost in translation.

PR agencies haven’t taken full advantage of the opportunity afforded by digital and social for a number of reasons:

  • There is a tension. Between the focus on financial efficiency and effectiveness that the macro numbers suggest versus the investment in tools and personnel required. Where are the studios, strategists, planners and media desks?
  • There has been an expertise drain across the industry as agencies deskill; paying new people into roles less than the person who previously filled it. This means that over time there is a trench in expertise between office leaders and the rest of the team, making it harder for the office to scale and a loss of institutional knowledge. This has led to a lack of diversity in thinking amongst many PRs; let alone gender, race and age diversity. From experience I’ve found that digital natives aren’t necessarily the best digital strategists
  • Clients haven’t embraced the change. Social in particular sits elsewhere amongst the marketing team. There is a similar division with paid media. The focus (particularly in Europe) on performance marketing over brand marketing hasn’t helped. Hubspot-style content marketing is a reductive process that isn’t the friend of PR agencies; despite their expertise in content
  • The window of opportunity closes as organic reach declines. Social media marketing effectiveness requires paid media budget. Agencies have jumped in too late with insufficient confidence. Traditional senior management agency PRs have been curiously hung up on this. Yet we see: corporate communications as adverts in the FT and WSJ and consumer PRs do paid advertorials and paid product placement

More information
David Brain’s post: Why Are The Biggest Global PR Agencies Stuck? Does It Matter?
Holmes Report