Old Playbooks Failing, Creativity Scarce: What's New in a Squeezed Ad Industry This Year? | 2018 Marketing Year in Review

As the old playbooks stop working one by one, where is the advertising industry headed?

Marketing is usually the first cost a company cuts, and in 2018 the industry faithfully mirrored the world economy. Over the course of the year, shares in WPP, the world's largest advertising company, fell from $90 to $54; Procter & Gamble kept trimming its ad spending and handed its place as the world's biggest advertiser to Samsung.

In a report released at the end of the year, the media agency group GroupM cut its 2019 growth forecast from 3.9% to 3.6%, and put new ad investment at $19 billion — down from the $23 billion it had forecast in mid-2018.

Creativity became a luxury good in 2018.

This summer's World Cup in Russia, which comes around only once every four years, left a strong impression. In today's scattered digital media landscape, more brands seized on that rare mass-audience event to run integrated campaigns — and yet good ads were few. What filled the screens instead was Boss Zhipin, Mafengwo, and the parodies of Mengniu's ad.

China is still the largest single source of growth in the global ad market, and at 640 billion yuan its market is second only to the United States. But forecasts put 2019 at the lowest growth rate on record for Chinese advertising (5.5%), and what changes is mostly one medium gaining at another's expense.

Disney bought 21st Century Fox, Comcast bought Sky, AT&T bought Time Warner. Traditional television's huddling together for warmth peaked in 2018. The total value of mergers and acquisitions among American broadcasters rose from $5.03 billion in 2017 to $8.05 billion in 2018.

Meanwhile, global digital ad spending passed television for the first time in 2018.

"We sell ads." In April 2018, Mark Zuckerberg spelled out at a U.S. Senate hearing the fact everyone pretends not to know. The arguments over data privacy and fake traffic still had no good answer by year's end, but the industry's growing reliance on numbers and audience labels had already produced results that cut both ways.

Zenith, the media agency owned by Publicis Groupe, forecasts that marketers will put 65% of their 2019 ad budgets into programmatic advertising, which means digital ads are likely to look more and more alike. In 2018 Jackson Yee fronted campaigns for Givenchy Beauty, Vidal Sassoon, Bottega Veneta, Tmall, The Beast, adidas Neo, Huawei Nova, Chando — celebrity endorsement had reached a point close to exhaustion. Seen another way, it was also a busy year for tie-ups between idols born after 2000 and brands. Kōki's deal with Bulgari made a lot of people realize they had aged out of the brand's target audience.

Behind the flood of celebrities in the ad market are brands that have lost their own voice. Digital advertising in 2018 was more scattered than ever: the combined views of the top ten ads on YouTube were almost half what they were in 2017. So where did consumers' attention go? KOL marketing became the method brands now lean on — in an Admaster survey, 60% of 240 digital marketing practitioners named KOLs as the focus of their social marketing.

In June 2018, Unilever CMO Keith Weed announced at the Cannes Lions festival that the company would refuse to work with KOLs who inflate their numbers. By October, the world's fourth-largest advertiser had revised that position, saying it wanted "authentic, long-term, purposeful relationships" with quality KOLs. The strategy was later read as a move toward working with more so-called vertical, micro-KOLs, in search of a smaller but more precise and higher-quality following — or, put another way, a change forced by tighter ad budgets.

Weed announced his retirement at the end of 2018. His work over the past few years included setting up Unilever's own in-house creative team, U-Studios, and a data center. By 2018, brands building marketing capacity in-house had become normal, and a fair number of the year's best creative work came out of those teams.

In May 2018, Takahiro Kinoshita, the former editor-in-chief of POPEYE, joined Uniqlo to work on brand marketing — another interesting piece of news, and a sign of how big companies now see marketing: good content, which is to say creativity, matters more than ever.

QDaily's Agency Daily column followed brand creative work all through the past year, and the plainest impression it leaves is that fewer and fewer ads are worth remembering.

Even so, a handful of fine ads stuck. Some were fine in the traditional sense — Tide's "It's a Tide ad" campaign during the Super Bowl, or Apple, which keeps turning out work that is flawless in execution:

Apple's HomePod ad, "Welcome Home"

Others (a few of them not even ad films) found bold, sincere, sometimes barely noticeable ways to reach consumers in the digital age.

They kept marketing from being altogether boring in 2018. Here are our eight observations:

Using the Logo More Shamelessly

It is easy to suspect that the crowd of fashion brands that redrew their logos in 2018 all hired the same design firm: bolder or thinner, they were all clean sans-serif type.

Rebranding for the digital age has become a formula that produces near-identical results. The list recently added FENDI, CK, CELINE, Balmain, and RIMOWA, which launched its 120th-anniversary campaign last year — a campaign also billed as the first at LVMH Group to abandon traditional print media.

But making a logo look more like the type on a phone screen may simply be brands acting on an illusion: that young people on phones will decide the brand is cooler than it used to be.

On the subject of logo redesigns, a few 2018 examples did better:

Diesel counterfeited itself. In February it opened a pop-up on New York's Canal Street — the city's fake-goods strip — disguised as a street vendor's stall, selling 1,000 hoodies printed with "DEISEL." The stunt told trend-followers plainly: we understand knockoff culture.

Huabei turned its logo into a character and built a series of ads around it, adding new equity in 2018 to a brand young people online had long been joking about.

Lacoste released 10 limited-edition polo shirts on which the crocodile was replaced by 10 endangered species.

After this year's chicken supply crisis, KFC UK moved fast and put out this apology poster, which drew wide praise on social media.

Becoming a Digital-Native Brand

A batch of new consumer goods companies are not relying on a logo to be remembered. They rely on products that meet new needs, plus an inventive experience.

We looked closely in this article at this kind of new consumer brand — most of them born in the United States — built around design and marketing.

A few agencies really are doing sleek, fashionable brand design for this group. But what these brands actually pulled off was offering "good enough" products to consumers the big companies had ignored, and, as internet-native businesses, knowing the secrets of talking to consumers on social networks.

"We're not limited to just advertising," said Michael Dubin, the founder of Dollar Shave Club, who once starred in his company's viral YouTube ad. "If you're a creative agency, then advertising is the only solution to the problem."

Brandless, then just over a year old, raised a $240 million Series C round from SoftBank's Vision Fund in July 2018. It sells 400 kinds of everyday essentials online, all priced at $3, sorted by the color of the packaging, with one option per category. CEO Tina Sharkey says she does not see Amazon as a direct competitor: "Amazon is the everything store; we are a highly curated collection."

Plenty of Chinese ad-industry year-end reviews mention "fission marketing," meaning the new brands of 2018 that won customers fast through social sharing, such as Pinduoduo and Coffee Box. But "fission" only describes the surface. Social sharing was not invented in 2018. The reason these new brands spread is at bottom much the same as Brandless: they still answer a new consumer need, and they build a shopping experience their industry did not have before — ordering coffee delivery through a mini program, for instance.

Vertical-Screen Ads Have Arrived

Also "not new" is the vertical-screen ad. A format better suited to a small screen ought to have spread with the invention of the smartphone, but vertical ads only became normal in 2018, once short-video apps caught on.

Before short-video apps, the main place to watch video on a phone was still the big video sites, with professional, horizontal production — and that had to do with the cost of making the ad, which was kept in line with TV commercials.

Snapchat was first to turn the vertical ad into a Stories-based product. Before long nearly every social app had this new kind of ad, always as a supplement to the scrolling feed of social content. Later, short-video apps that offer nothing but the vertical format used their sheer traffic to persuade more and more brands to make ads for vertical screens specifically.

As of November 2018, Douyin said its monthly active users had passed 400 million; and according to Sensor Tower's tracking, Douyin's overseas version, TikTok, ranked second in worldwide downloads in November, behind WhatsApp and ahead of Messenger, Facebook, and Instagram.

Video platforms that make professional film and television content began to follow. Netflix moved first, adding 30-second vertical trailers to the version it released in April.

Among brands' own social campaigns, 2018 also brought more videos shot for vertical playback. We don't think the attempts so far are good enough to be worth showing you — the vertical ads Procter & Gamble and Apple ran in JD.com's "JD Evening 8pm" slot, for example — but this is without question a format that lands more easily with a phone audience, and there will be more of it in 2019.

Build a Theme Park, Not an Instagram-Famous Pop-Up

A lot of people probably had this moment in 2018: you walk into a newly renovated mall, quite a few storefronts still empty, and within a few steps you stumble into a pop-up shop or an exhibition where the merchandise and the artwork plainly cannot fill the room.

With budgets tight, countless brands opened pop-up stores and did cross-brand collaborations, hoping a gimmick would win attention and leave behind one photograph for social media.

Marketers need to stop fixating on these so-called "Moments-worthy" or Instagrammable moments when they design an experience. Once a single, countable social share becomes the only purpose of an event, all the storytelling that a physical space offers is simply thrown away.

In March 2018, the detailed, convincing temporary theme park that HBO's Westworld built at the SXSW festival — 60 actors, a 90-minute experience, a 440-page script — is the depth a pop-up experience should have. Westworld ended up the most-discussed television show at SXSW, with 1.9 billion social media impressions.

The agency behind it was Giant Spoon, which in 2017 also built a VR experience for Warner Bros.' Blade Runner 2049 at San Diego Comic-Con, along with a space done up entirely in cyberpunk style.

That is also why, among the 465 mergers and acquisitions in the marketing industry last year, 48 involved PR or experiential agencies and 14 involved production companies — a sharp rise on 2017. Advertisers today need to produce more content worth experiencing, not just a tagline, a logo-times-logo collaboration, and a forgettable pop-up.

Name Names, Tie It to a City

Nike's "Just Do It" turned 30 in 2018, but the Nike ads that hit consumers hardest last year did not use the line at all. They named a city and caught that city's character.

London — Nothing Beats A Londoner

Taiwan — No More Holding Back

Shanghai — Shanghai Can't Get Enough

Big companies have started designing marketing for regional markets specifically. These city ads, which Nike timed to local sporting events, were among the best work of 2018.

Behind the change in tone is the shrinking of globalization. From Brexit and the arrival of the protectionist Donald Trump in 2016, the ratio of world trade to GDP has fallen for four straight years. The U.S.-China trade war of 2018 pushed market integration back further. Enormous multinational brands have realized they can no longer serve every consumer with one simple message.

Set against opaque KOL marketing that grows ever more "precise," a city, a region, a particular culture are good ways for a brand to stay relevant today without giving up scale.

Apple has grown more local in China too, from Jiang Wen voicing the iPhone 6 ad in 2014 to Three Minutes, the Spring Festival travel ad directed by Peter Chan in 2018 — one of the few cases last year that spread widely across the Chinese internet rather than pleasing a small circle.

We recently wrote about a bakery in St. Petersburg whose way of using outdoor posters to strike a chord with the texture of the city is another idea worth borrowing.

The Celebrity in the Ad Is Not a Spokesperson

The logic of signing a traffic-driving celebrity is buying fans with money. It is hard to say how much that creates for a brand, especially when one such celebrity may be carrying 10 endorsements at once.

Last year brought a few cases that used big names differently: not an endorsement picked for fit, and not sales insurance bought by the follower count. In these ads the celebrity and the brand were closer to an interaction, and people watched to the end the way they read gossip or listen to a new song.

Google Alexa's Super Bowl ad: what if Alexa lost her voice? These celebrities filled in for the voice assistant.

For Deadpool 2, Deadpool carried the film's fourth-wall-breaking habit into the social media feeds of David Beckham and Hugh Jackman.

Universal Love is an album made for a McCann New York campaign, with Bob Dylan, Kesha, St. Vincent, and other artists. It is a record of wedding songs, aimed at the LGBTQ community — and the advertiser behind it is MGM Resorts, which hopes same-sex couples will hold their weddings there.

The other side of the traffic-star coin was the crowd of "ordinary-person endorsers" that appeared in the second half of 2018. After the success of Alipay's Lucky Koi came McDonald's China's relative surnamed Jin, JD.com's "Wang Yuan," NetEase Cloud Music's "Ding's Chosen Son," and more — close to setting a new low for how far the industry will go to seem close to ordinary consumers.

We think the crudeness of "ordinary-person endorser" marketing should not be what a brand settles for once the year's budget runs out. Skittles' Super Bowl ad made an overnight chosen one famous far better, and is worth studying:

Skittles — Exclusive the Rainbow

Manufacturing a Brand Meme

The noise and imitation Alipay's Lucky Koi won came down to a brand's ability to set the agenda in the social media era.

A meme is a joke or a cultural phenomenon that suddenly spreads across the internet on a large scale. A brand setting out to manufacture one is a little like the old "viral marketing," but the forms it takes now are far richer.

"Reposting the lucky koi" had long been common content among Weibo users; Alipay packaged that behavior into an agenda the brand itself started.

Something similar happened with the campaign the kitchen appliance brand Vatti ran during the World Cup: "If France wins the Cup, Vatti refunds you in full." Betting on matches, a popular pastime during the tournament, became the brand's way of playing with netizens. Mengniu's line "Born to Be Strong," which netizens turned into a running joke, is the counterexample.

Manufacturing a meme is not easy. Jokes online tend to be goofy, sometimes coarse. "It takes a lot of courage to be silly," said Aina Fuller, UK marketing director for Anheuser-Busch's Bud Light: when a brand deliberately tries to make a loud noise in social space, that noise has to stay consistent with the brand.

Bud Light's earworm of a slogan, running through both the Super Bowl and the World Cup in 2018, was "Dilly Dilly" — a phrase invented on the spot by ad people for the campaign, spoken by the fictional medieval knights in the ads, who toast one another while drinking, "Dilly Dilly" standing in for a cheerful cheers. After eight ads in a row all ending in "Dilly Dilly," netizens who swap out their stand-in for "hahaha" every few days quickly learned how to use it.

The Most Effective Approach So Far: Taking a Side on Mainstream Values

Starting with the 2017 Super Bowl in the U.S., issue-driven ads that "talk politics" broke out across the industry all at once. "There is no situation in which a brand must step forward and discuss a political issue. In almost every case it is a choice, a strategic choice," Denise Sabet, North America general manager of the brand consultancy Labbrand, told QDaily at the time.

The results were mixed. The worst belonged to Budweiser, whose ad about its founder also being an immigrant offended a large number of its Trump-supporting consumers.

Ads that take on social issues always carry risk, but they are also, beyond doubt, the easiest way in today's media environment to get attention and give a brand charisma. By 2018, some creatives had found the right posture for raising an issue.

At the Cannes Lions festival in June — the "Oscars of advertising" — the Titanium Lion, the award that best marks the year's creative direction, went to Palau Pledge, which turned an environmental idea into creative work.

It is an atypical piece of tourism marketing. The tourism board of the Pacific island nation wanted to protect the local environment while keeping visitor numbers up, which matter to Palau's economy, and found a neat solution: permanently rewrite the country's visa-on-arrival procedure so that every visitor signs a pledge, as the passport is stamped, not to harm the environment. A week after the policy launched, without a cent spent on media, heavy press coverage had earned it 1.7 billion free impressions. Over the next 10 years, the 2 million tourists entering Palau will all sign this "Palau Pledge."

By the end of the year, the press was handing its honors to Nike, which dared to make Colin Kaepernick the face of its anniversary campaign. Since 2016 the football player had repeatedly knelt on one knee instead of standing during the national anthem, in protest against racial discrimination, police violence, and social injustice. Many other players followed him, and many people criticized him, including U.S. President Trump. Nike's ad chose Kaepernick's side, setting off wide argument in the United States and even boycotts. But note that two-thirds of Nike's consumers are under 35, a group in which most people support racial diversity. Choosing Kaepernick's complicated face added a new spirit of the age to "Just Do It."

As Procter & Gamble's chief brand officer, Marc Pritchard, said at Cannes Lions: "Gender equality is good for society and good for business." Women are the main audience for the household goods giants.

In other strong cases from 2018 you can also see marketers deliberately making a new social consensus part of the brand. A few examples:

Shiseido's LGBT-themed Christmas ad, Party Bus

Graphics: Shuya Zheng

Cover image from Unsplash and Time