Advertising Age is putting its significant expertise to the task of predicting what 2012 has in store for the industry. Here are some excerpts from “What You Can Expect for Adland in 2012.”
MARKETERS
ALCOHOL
The big action is in light brews; all eyes on Bud Light and Coors Light
After slogging through another down year, major beer marketers will be looking to climb out of their rut with product and advertising launches. The biggest to watch might be Bud Light. Under new ad agencies McGarryBowen and Translation, the brand is expected to add some sophistication to the humor it has relied on for years.
But Coors Light, which is within striking distance of overtaking Budweiser as the nation’s No. 2 seller, could turn out to be the major story in 2012.
Anheuser-Busch InBev is also banking on higher-alcohol Bud Light Platinum to win over younger drinkers who have been gravitating to spirits. A lot of money is at stake, with Platinum’s debut expected to be supported by expensive advertising, including at least one Super Bowl spot.
MillerCoors is expected to roll out a fresh campaign for struggling Miller Lite in the spring. The pressure is on both the brewer and agency DraftFCB to return some momentum to the brand.
Craft beers continue to capitalize on consumers’ taste for adventure, with new varieties seeming to appear weekly. Further growth is expected, though a ceiling exists somewhere for these more expensive brews.
AUTOMOTIVE
General Motors to rev up Chevy; digital media to boom in sector
Coming off a stellar 2011 and a massive media-agency review expected to wrap early this year, GM — the world’s largest automaker (and third-largest advertiser in the U.S., with outlays of $2.86 billion in 2010) — is pushing Chevrolet. The division, which moved 4.8 million units worldwide through November 2011, is primed to expand; it’s reinforcing its presence in China, South Korea and South America, and Sonic is already in short supply.
Expect currency instability in the Eurozone to complicate the mandate of Volkswagen, Europe’s No. 1 carmaker, to take the same position worldwide. Most Japanese players think inventory shortages caused by the earthquake and tsunami should ease in the first quarter. Honda said that it plans a significant upgrade for the Civic.
In media, think digital and big-event TV. This year’s Super Bowl has another pileup of automakers, with five in so far. “On the TV side, it’s the can’t-miss stuff that’s TiVo-proof — the National Football League, PGA Golf — and we’ll have a large presence in the 2012 Summer Olympics,” said Dan Creed, VP-marketing for BMW North America. Spending will shift, he said. “We’ll still do some print and newspapers, but you’ll continue to see our social-media presence grow.”
CONSUMER PACKAGED GOODS
Showdown ahead as marketers try to hold the line on price increases
This year will test whether price hikes among household and personal-care marketers will hold or whether a continued weak economy will lead them to beat a retreat that could eat into profits and budgets.
Marketers have largely signaled that they’ll hold the line on spending in absolute terms or as a share of sales in 2012 vs. 2011. At the same time, the sector is likely to keep shifting funds and focus toward digital marketing. Unilever and Procter & Gamble Co. are expected to send large delegations to the Consumer Electronics Show in Las Vegas later this month.
Price increases have resulted in private-label growth as consumers cut back on branded products. According to SymphonyIRI data from Deutsche Bank, prices on such items rose 4.5% in the four weeks ended Nov. 27, while sales growth slowed to 2.1%, compared with 2.8% in the third quarter of 2011.
P&G is betting that it can rekindle laundry detergent with Tide Pods liquid-detergent tablets. Its launch was delayed six months, to February, because of retailer demand that exceeded initial projections, P&G said.
RETAIL
Big chains will wrestle with new management, CMOs and agencies
Four of the retail category’s top spenders are kicking off the New Year without CMOs: J.C. Penney Co., Target, Kmart and Old Navy. Expectations are that, with the holiday season now wrapped, appointments will soon be made.
Eyes will be glued on J.C. Penney , Sears and Kmart. Each has shaken up its agency roster in recent months and could be bracing for more changes. J.C. Penney and Kmart have added Peterson Milla Hooks, Target’s former agency, raising questions about their relationships withSaatchi & Saatchi and DraftFCB, respectively. Sears has shifted business to McGarryBowen fromY&R.
This could also be a make-or-break year for several major players. Penney’s new CEO, Applealum Ron Johnson, has vowed to “not improve but transform” the aging company. Analysts are impatient with Sears and Best Buy. The former reported losses for the first three quarters of 2011, while the CEO of the latter was selected in a poll by financial media outlet The Street as the retail chief who should be fired in 2012.
AGENCIES
CREATIVE AGENCIES
Ownership issues and digital turf battles will continue at agencies
Ad spending will continue to grow in 2012, but more slowly, as some marketers adopt a cautious attitude about launching campaigns in a fragile economy.
That means shorter timelines for creative agencies to develop initiatives — what used to be given months to complete may now be expected in days — and the need to be ready to connect marketing activities with cultural memes or events that generate consumer interest.
For creative shops, in particular, the ownership issue will come to a head, with turf battles about who does what when it comes to digital creative, social media and PR. The questions will not only spur infighting and damage collaborative efforts between agencies but also complicate the process of entering award competitions. Creative awards are enjoying a bit of a renaissance with regained importance as more clients get involved in the process, illustrated by the spike in marketers attending the Cannes Advertising Festival of Creativity.
Cross-pollination of talent will have digital expertise heading to full-service shops and those with broader backgrounds seeking specialty work. But with a limited pool of trained creatives, the industry will boost recruitment from outside the field, increasingly turning to the tech, consulting and fashion sectors to source agency staff.
DIGITAL AGENCIES
After spate of major acquisitions, industry will seek to digest them
With fewer agencies of scale still privately held, the big holding companies will spend the better part of the year sorting out past acquisitions rather than buying shops to plug the digital gaps in the services they offer. Exceptions: geographic expansions to help fill out the glogal map. Aegis, left with only media and digital agencies after selling its research company, is a possible acquisition target.
Publicis Groupe is evaluating how its almost $3 billion worth of digital-agency acquisitions can make the holding company, including “traditional” siblings like Leo Burnett and Saatchi & Saatchi, more digital. WPP, too, will have to consider Possible Worldwide’s limited success one year after it rolled up digital agencies to create the global network to compete with Publicis’ global behemoths Digitasand Razorfish.
Digital pure-play agencies face a greater threat from the technology side of the client-services business. After Sapient’s success in agency services, more IT consultancies are eyeing digital-agency work.
PUBLIC RELATIONS
With identity crisis averted, PR looks for right content mix
Knee-deep in social media for the past few years, the PR industry has had plenty of time to mull over the role of digital in an otherwise traditional PR environment. Agencies have realized that social is just an addition to the strategy, media-relations and crisis work they’ve been doing for nearly a century. PR agencies are not transforming into digital agencies. Identity crisis averted.
Even so, content creation and management continue to be important components of the marketing and revenue mix, augmenting traditional earned-media and PR campaigns. Nontraditional hiring will continue as a result, with agencies bringing in creative talent with video-production expertise.
As clients attempt to reach new consumers and engage with them globally and via multiple channels, they seek more support from corporate communications and branding — as opposed to product-centered — marketing. The shift is one of many that emphasize the hiring of industry and marketing specialists vs. generalist PR talent. For example, multiple agencies have hired Ph.D.s in the health care sector and executives in the technology industry.
Last, global expansion and investment in the BRIC countries is finally paying off for larger PR firms.
There’s more! To read the full article in Advertising Age, including what it sees ahead for the media world, click here.
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