Feature

Review of the year 2011: in with the new and out with the old

In a year when change was the global byword, adland saw technology become ever more central to agency fortunes and two sacred cows sacrificed to progress, Ian Darby writes.

The industry was shocked in 2011 when the News of the World announced it was to close
The industry was shocked in 2011 when the News of the World announced it was to close

For many in the world, 2011 was the worst of times. A year of constant change and vacillating fortunes - often within the space of a day. It was a year characterised by unrest, civil and otherwise, and a great push for freedom that resulted in the Arab Spring. This was a surge propelled by waves of anxiety, with some citizens willing to risk their lives for change.

In the UK, or England at any rate, the stakes were less high, but there was also a palpable sense of unease. As the economy stalled and jobs were slashed, protesters went without a shower and camped outside St Paul's Cathedral to show how jolly annoyed they were. Then, public sector workers staged a walkout.

This outpouring of anger followed the events of a seismic summer that saw riots on the streets of England and the threat of implosion at one of the country's eminent media owners, News International. Against this backdrop, ad people could be forgiven for casting envious glances at the prosperity of China, where economic growth was expected to be 9 per cent in 2011 compared with the UK's 0.9 per cent.

To their credit, though, the majority continued to deliver for their clients and even innovated despite the sorry conditions surrounding them. This doughty spirit was especially impressive given increased client pressure on remuneration combined with the creeping threat of further regulation on advertising.

The most explosive industry event of the year, however, was NI's decision to close News of the World as the phone-hacking scandal allegations mounted. On 7 July, NI announced that the 10 July issue would be the paper's last, ending a 168-year history.

This sorry fate came on the back of some praiseworthy investigative journalism, most notably by The Guardian, which sparked the Leveson inquiry into press behaviour and led to criminal charges against some of the alleged offenders.

Rebekah Brooks, the NI chief executive, resigned and Rupert Murdoch's influence over public life seemed, at least temporarily, to be shattered. Then, a bunch of gung-ho MPs relished forcing the Murdochs to answer questions at a select committee hearing that closed with a foam pie in the face for Murdoch Sr. As the newspaper industry came under fire for failing to keep its own house in order, sources close to the Prime Minister suggested that a model similar in nature to advertising's robust self-regulatory structure could replace the Press Complaints Commission.

It was difficult to see how the advertising market could take great satisfaction from the demise of News of the World. The loss of a newspaper that sold close to three million copies each Sunday was hardly a great outcome for the advertisers that had used it (though these were many fewer than those that issued pompous press releases to say they were considering pulling their advertising from the title).

When not gawping at the latest phone-hacking revelations or Hugh Grant dishing the dirt at the Leveson inquiry, we were left to contemplate a backdrop of declining fortunes. The major ad forecasters had spent 2010 marking up their predictions, but it seemed that the likes of Group M, which had no way of foreseeing the extent of the eurozone crisis, were too optimistic going into 2011. In July, WPP's media arm slashed its UK adspend growth forecast from 3.6 per cent to 1.5 per cent as the scale of European debt and other uncertainties dented advertiser confidence.

The IPA's third-quarter Bellwether Report revealed signs of hope with the first evidence of an upward revision in marketing budgets in more than a year. However, this was tempered by the finding that business confidence among advertisers had hit a two-and-a-half-year low, with marketing executives pessimistic about rising prices, higher utility bills and job insecurity.

Evidence from agencies suggested that this uncertainty had a major impact on their bottom line. Operating profit at marketing services shops more than halved to 5.4 per cent during the first half of 2011, according to the Marketing Agencies Association. The body, which represents integrated and below-the-line agencies, called on clients to "realise that they can't keep squeezing agencies on fees."

On occasion, advertisers showed a sense of corporate social responsibility, even if this was inevitably linked to preserving their own fortunes. The likes of Procter & Gamble aligned themselves to social initiatives, and its rival, Unilever, named as the winner at the International Green Awards, launched its Sustainable Living Plan.

One advertising body identified as unsustainable was COI, which saw a review of its status in 2010 dragging into 2011. The review resulted in an announcement that it would be wound down in early 2012 and replaced by a new system based around clusters of government departments, with redundancies expected among its 400 staff.

COI wasn't the only body facing cuts as several media owners and agencies were forced to make redundancies during the year. Though grim, these cuts didn't seem to reach 2008/09 levels. On a more positive note, there was ample evidence of a dynamism and entrepreneurial spirit that bodes well for the industry's future.

Richard Exon and Damon Collins, the chief executive and the executive creative director at Rainey Kelly Campbell Roalfe/Y&R, announced in September that they were leaving to launch a start-up, following in the footsteps of the previous management team at the WPP agency, who left to launch Adam & Eve in 2007. Mark Roalfe, the RKCR/Y&R chairman, reacted quickly by promoting Alison Hoad and Ben Kay to joint chief executives. The agency later hired Toby Talbot, a Brit from DDB New Zealand, to replace Collins.

There was also internal progression at Saatchi & Saatchi, which appointed Magnus Djaba from sister agency Fallon as its chief executive after the managing director, Michael Rebelo, left to join Saatchis in Australia. Publicis London lost its chief executive, Neil Simpson, who left to launch his own business and was replaced by Karen Buchanan from The Red Brick Road.

After just eight months as the chief executive of WCRS, Penny Herriman stepped down and was replaced by the Engine managing director, Matt Edwards - the agency's third chief executive in two years.

CHI & Partners reached something resembling maturity with a tenth birthday celebration while some of the UK's largest agencies, notably Abbott Mead Vickers BBDO and Bartle Bogle Hegarty, strengthened their reputations with robust performances.

It wasn't all about the large players. Now, a start-up from the former Rapier creative John Townshend, the planner Kate Waters and the former COI chief executive Mark Lund, recovered from a false start (when it was poised to land Waitrose before losing out to BBH) to bag Butlins as its first client.

A number of overseas launches in the UK included BETC's and Crispin Porter & Bogusky's London offices, both of which promise to provide a challenge to London's creative agencies. Conversely, Karmarama is looking to expand its horizons outside the UK after securing funding from the private equity group Phoenix.

Graham Fink, M&C Saatchi's gifted creative director, took a prize job at Ogilvy in China. Despite this evidence of overseas UK talent-spotting, cynics suggested that London had lost its way as a centre of excellence. They pointed to the fact that several agencies struggled to fill creative director posts and that the UK failed to land a single film gold at the Cannes International Festival of Creativity.

Barely a week went by without mention of an agency launching a social media or direct and data division. This showed the extent of new opportunity for ad agencies but also prompted accusations of tokenism and bandwagon jumping. Larger deals in this space, such as AMV's acquisition of Weapon7 and McCann Worldgroup's takeover of Meteorite and AllofUs, showed the ambition of the big agencies to evolve.

These moves seemed an attempt to capture some of the spirit of successful digital shops such as AKQA and LBi, which have technology at the centre of what they do but are integrating this with knowledge of how brands work and build through new(ish) channels.

At media agencies, management line-ups remained relatively stable, though there was a new chief executive at WPP's MEC, which promoted Steve Hatch to replace Tom George, who moved to a wider European role. Media agencies had a quietly successful 2011 as they worked on improving their search capabilities and on building automated trading systems that could deliver healthy margins when dealing online ad inventory.

While Group M remained number one in the media agency market, Aegis proved to be a feisty challenger after its acquisition of the data-driven MediaVest Manchester (now Carat Manchester). Omnicom's PHD continued to excel while WPP's Maxus was one of the fastest-growing media agencies.

For media owners, there was good news when the IPA's third-quarter Bellwether Report showed growth for all major media channels for the first time in four years. Radio, outdoor and online media posted the most impressive revenue growth when compared with 2010, and TV held its own.

Change was in the air at ITV and Channel 4, which both revamped their commercial operations. ITV culled senior sales staff in January and then appointed Simon Daglish and Kelly Williams to its top sales roles. Channel 4's long-serving sales director, Andy Barnes, announced his departure and was replaced by Jonathan Allan from OMD UK. Early evidence of the wisdom of these changes will come from this winter's trading season.

In creative terms, the "big TV moments" that typified 2010 were thin on the ground, but not for want of trying. Many advertisers saved their blockbuster ads until the autumn and aired them with "premieres", trailed via social media, in shows such as Downton Abbey and then The X Factor.

Prominent among these was Muller, which had awarded its £25 million business to TBWA\London in February. The resulting campaign broke around the same time as offerings from Nationwide (won by 18 Feet & Rising) and Halifax (Adam & Eve), also the result of account wins.

Several large accounts moved during the final quarter, when the relative minnow Krow captured the £84 million DFS business and Virgin Media appointed BBH to its account.

While Adam & Eve's John Lewis Christmas campaign captured the hearts of the nation with traditional techniques, some agencies pushed the boundaries with campaigns that took on a life of their own outside the conventional media space. With campaigns such as Grey London's for Lucozade, BBH's for Yeo Valley (building on 2010's work), Drum's activity for HP and VCCP's work for O2, we witnessed agencies acting as curators as well as creators, pushing brands into spaces where they didn't exist before.

But broader freedoms were elusive. This was due to a blend of "nanny state-ism" that was encapsulated in tighter restrictions on advertisers after the Bailey Report on the sexualisation of children and the separate issue of big ideas running into the brick wall of client caution.

Happily, the industry seemed to have robust and responsible representation via the Advertising Association and Advertising Standards Authority. 2011 also saw Hamish Pringle, the IPA's long-serving director-general, leave the body. He was replaced by the respected Paul Bainsfair. Its new president, Karmarama's Nicola Mendelsohn, hit the ground running with an agenda based around encouraging talent and "a new generation of creative pioneers". She also led delegations to China and the US West Coast.

This seemed appropriate in a year when ad people mourned the passing of the Apple creative genius Steve Jobs, while celebrating the impact of the new technology economy not only in the US but also in London.

Advertising, with its capacity for shape-shifting and innovation, could be well placed to benefit in these conditions. So bring on 2012 with its Olympics and its Queen's Diamond Jubilee. Let's hope it's the best of times.