The Impero Report

A three-part survey into the state of advertising

Issue 52 | September 2019

Impero is an award-winning creative agency with offices in London and Buenos Aires. The agency's mission statement is it exists to make tired brands famous, for the right reasons, propelling them to growth with genuinely creative work real people really want to see, in the real world.

That means it offers brand strategy, branding and design, above-the-line advertising, social content, influencer marketing, pretty much whatever it takes to resuscitate a brand that has been forgotten by time.

The agency must be close to being unique with 100% gender pay parity and with six out of seven departments run by women, an all-female creative department, and five office dogs.

It was founded by Kiwi Michael Scantlebury, whose natural inclination to challenge the shibboleths of the advertising industry masks a passion for it.

It is this passion that prompted him to set in motion the Impero Reports, which were published in June to coincide with the Cannes Lions Festival.

(Read Michael's personal perspective of the festival on pages 13).

We re-publish the Impero surveys here in the belief that between them the three make it clear that advertising's value to marketers has been, still remains and will continue to be creativity.

The first, a summary of the opinions and attitudes of consumers to advertising today.

Do they really hate it?

The second, what about the client community? How do they feel the advertising industry meets, or doesn't meet, their needs in these changing times?

Third and last, the Talent Report. Impero has collated the hopes and fears of young people working in the UK industry today.

Across all three reports there are glimmerings of light, which encourage Scantlebury to believe that advertising does have a future if it can update both its business models and its culture.

1. The Consumer Report

The advertising industry gets a bad rap but still adds "creativity, colour, flavour and information to people's lives.

Overall, advertising is a force for good, say consumers – and it's changing for the better

TV advertising is Britain's most-loved medium – and our most-loved advert is Coca Cola 'Holidays are Coming'

Only 19% of consumers say ads are an unwelcome distraction – and just 15% feel overwhelmed by online advertising

The advertising industry often gets a bad rap in terms of its relationship with consumers. Last year, an Ipsos Mori poll found advertising executives are Britain's least-trusted professionals, ranking below politicans – and a recent Advertising Association report showed consumers feel "bombarded" and "overwhelmed" by adverts.

But Impero has found that consumers may view the industry more favourably than previously thought.

1,500 consumers across the UK were asked what they thought about the advertising industry and what needs to change to keep adland future-fit.

Trust in the advertising industry was clearly still an issue, with the majority of consumers (63%) feeling mistrustful, to varying degrees, of the messages they see in advertising.

Only 25% of consumers said they trust the messages they see in advertising, vs 31% who said they "probably" don't trust them, 18% who said they are "very suspicious" of them, and 14% who said they "definitely" don't trust the messages they see in advertising.

Contrary to recent headlines, though, when asked whether advertising adds to people's lives, or represents an unwelcome distraction, the majority of consumers (36%) responded in favour of advertising, saying adverts "add creativity, colour, flavour and information" to their lives.

Only 19% of respondents said adverts were an unwelcome distraction. A lower-than-expected 15% of respondents admitted to feeling overwhelmed by online advertising, while a mere 10% feel overwhelmed by advertising offline.

What's more, almost half of the consumers surveyed (43%) feel advertising has changed for the better in the last ten years, vs 27% of respondents who feel it has got worse.

Of those who feel the industry is improving, 42% said advertising is more fun than it used, to be, and 41% said advertising has got cleverer. More than a third (34%)
said the industry has a positive impact on issues like gender, sexuality, disability and body confidence. 28%
of respondents cited targeted advertising as a positive, saying "they know what I need". A quarter think it is better regulated.

Of the 27% who feel the industry is going backwards, 67% blamed a decline in the industry's sense of humour, and more than half (51%) blamed the quantity of adverts, saying there are too many. 33% of respondents said the quality of advertising is not as good, and the same percentage (33%) said adverts aren't as memorable as they used to be.

"Overall, these findings are pretty encouraging," said Michael Scantlebury, founder of Impero. "It's great to see that the majority of consumers think we are a force for good – and even better to hear that most people feel we add to their lives, rather than overwhelming or distracting them. Similarly, the fact most people feel advertising is funnier, cleverer and has an increasingly positive impact on society seems to spell good news for the reputation of an industry which often gets maligned.

"Perhaps the key take-outs from this report are that we need to focus on making great work, making people laugh, and coming up with ideas that stick out in people's memory to stay future-fit."

Sarah Golding, former IPA President and UK CEO at The&Partnership, said: "In spite of recent headlines

surrounding a lack of trust in advertising, it's encouraging
to see that consumers still see us as an overall force for good. I've always said we need to fly the flag more proudly for the contributions we make as an industry, to society, to the economy and to culture. It's very encouraging to see consumers feel we add value, colour, flavour and information to their lives – and that we're moving in the right direction.

"Continuing to make work that pushes boundaries, challenges stereotypes and forges progress will be central to keeping adland future-fit, as well as embracing the best that smart data and progressive tech have to offer."

A spokesperson for the Advertising Association said: "It's good to see the recognition in this latest research of the public's overall view that advertising is a good thing. Public trust in advertising is an issue that affects everyone working in our industry. Our industry is world-class in many ways and we believe that a collective effort from advertisers, agencies, media owners and tech companies can ensure a strong, healthy future for UK advertising and its relationship with the public."

When asked what type of advertising they enjoy the most, consumers voted overwhelmingly in favour of TV adverts, with 52% of respondents saying TV is their most loved medium. More than a fifth (22%) of consumers liked outdoor advertising the best, vs 14% of respondents who preferred influencer marketing and 11% who preferred digital advertising.

The nation's favourite advert was Coca Cola 'Holidays are Coming' (31%), followed by Cadbury's Gorilla (28%) and PG Tips Chimps (23%).

When asked whether they would want to work in advertising, almost a quarter of consumers (23%) said they thought it would be a great industry to work in. However, the same number (23%) thought it would be a lot of hard work and 15% said the industry has a bad reputation.

Perhaps unsurprisingly, the majority of respondents (54%)

feel advertising is an elitist industry, with 17% responding it is "definitely" an elitist industry, 37% responding it
is "probably" an elitist industry and almost one third (31%) saying "maybe" the industry is elitist. Only 15% of respondents did not see the industry as elitist.

Another area of controversy for the industry over recent years has been political advertising: the Institute of Practitioners
in Advertising (IPA) last year called for a moratorium on hyper-targeted political advertising amid claims it had had a damaging effect on democracy, unfairly influencing the US election and the EU referendum.

15% of the consumers Impero surveyed said advertising has had a damaging effect on democracy but a larger proportion of respondents (18%) said the problem has been overblown. However, the majority of respondents (36%) said people need to be much more cautious with what they share online.

2. The Marketing Report

Advertising is failing to adapt fast enough to the pressures on marketers.

  • Consultancies are biggest threat to industry's future, according to new report from Impero
  • Small independents are in second place for brands' marketing budgets

Advertising agencies are failing to adapt fast enough to the growing pressures on marketers.

The overwhelming majority of CMOs, Heads of Marketing and Marketing Directors surveyed (64%) said the advertising world is not adapting fast enough to the pressures on marketers, vs only a quarter who said it was doing a good job at keeping up.

When asked which type of agency is best-placed to meet their creative and brand strategy needs, the majority of marketers (43%) said it was not an advertising agency at all but a consultancy, with great data and tech resources, that would be most important to the future of their brand.

Coming in in second place were small independent agencies with original ideas, with 25% of marketers saying this type of agency would be pivotal to their future, vs only 19% who would choose a multi-disciplined agency or agency network with media planning and buying and production as well as creative capabilities.

This is good news for small independent agencies, who believe in the power of creativity.

What marketers want and need as much as ever is creativity

"The consultancies have been hovering over the agency space for some time," says Impero founder Michael Scantlebury, "but this is another timely reminder that your competitors often aren't who you think they are: it could be the innovators from outside your industry that will be the ones to eat your lunch.

"All that said, it's great to see small shops with original ideas coming in in second place as the favourites to shape the future of the industry. I've long been saying small, nimble, agile independents are better placed to meet marketers' changing needs than bigger shops – or the holding companies, which look increasingly outdated."

When asked what they would change with regards to their relationship with their agency, the majority of marketers (29%) said the changes they would make would be time-

based, and that they need their agency to be more agile and deliver work faster.

One in five (20%) said they need more healthy friction with their agency, and that "they need to be in a position to push back on us".

18% said they would make structural changes, based on
the distribution of talent across different disciplines and teams, and 14% said the changes they would make would be discipline-based: "we need more focus on creativity and less on delivering lots of assets for lots of different channels". 11% felt they were paying their agency too much, and would make cost-based changes.

When asked whether the rates their agency was charging them were fair, a significant majority of marketers (58%) said yes, however. Just over a third (34%) said no, and 8% said they weren't sure.

When asked where they thought their money might be being misspent, an overwhelming majority (85%) cited excessive delivery mark-ups as a source of frustration, with unnecessary meetings coming in second place (68%) and agency overheads in third (65%).

59% cited employee time as an issue when it came to wasted spend. Only 24% pointed at unnecessary profit margins that benefit the few and not the many.

When asked whether they trusted their agency to deliver meaningful results for their business, an overwhelming majority of marketers (70%) said yes. 64% of marketers said their agency's primary focus was driving tangible results that would benefit bottom-line sales, vs 36% who felt this was not the case.

When asked whether their agency's business model was built with their brand's needs in mind, marketers split evenly down the middle, with 42% responding yes and the same number saying no. 16% said they were not sure.

Impero also addressed the widely debated 'performance marketing vs brand building' question – asking whether marketers were briefing their agency to focus more on performance marketing and driving sales quarter-to-quarter, or on longer-term brand-building.

The majority of marketers (56%) said they were briefing their agency to focus more on performance marketing, with the majority of that group saying their approach was working (38%), vs 10% who felt it was not working.

44% said they were briefing their agency to focus more on brand-building than performance marketing. Of that group, 20% felt the approach was working, vs 13% who felt it wasn't working.

When asked whether they felt their chosen approach would deliver long-term success for their brand, those whose focus was on performance marketing were more confident than those focused on long-term brand-building, with 34% of performance marketers responding yes and only 7% saying no, whereas 27% of brand builders responded yes and 9% said no.

Nearly half of marketers interviewed had brought elements of their creative output inhouse over the past two years (46%). 26% had in-housed elements of their creative production, and 23% had in-housed elements of their media buying.

Scantlebury again: "The future for our industry looks like a mix of consultancies with great data and tech resources and independent creative shops with original ideas – who can still offer that healthy friction one in five marketers are looking for.

"If they can move fast enough, perhaps the big
agencies would be best advised to turn themselves into consultancies, and the small shops should focus on making great creative work.

"Aside from that, it looks like collaboration will be key to the future: consultancies and inhouse agencies aren't going anywhere, so learning to collaborate them will be central to the future of creative shops."

3.The Talent Report

Is advertising facing a brain drain?

  • 62% of industry talent has interviewed outside adland over the past twelve months.
  • Creativity needs saving

62% of industry talent has interviewed outside adland over the last 12 months and the majority of people in the UK industry intend to stay in the industry for only 2-5 years.

This might not be for the reasons one would expect.

Burnout, mental health, a lack of diversity and poor work-life balance have been at the centre of the debate surrounding the advertising industry over recent months.

But, when asked to anonymously name one thing they would change about the industry for Impero's 'Rebranding Advertising' report, none of these issues came in top.

The majority of respondents (24%) said they would change the nature of the work they did and that "creativity needs saving".

"Working with creative people on creative projects" was also the top reason most respondents chose a career in advertising in the first place, with 58% of respondents citing this as the thing that attracted them to the industry.

The lifestyle and the money came in in joint second place at 51%, and crunching numbers came in third, at 17%, showing our reputation as an industry of "mad men and maths men" still holds true.

The second most important thing to change about the industry was the culture, with 23% of adland talent responding, "We need a fairer culture that is more reflective of the outside world".

21% chose the hours, saying, "We are trying to squeeze more and more work in for the same amount of money and people are working far too many hours."

18% cited the business models as the thing they would change, responding: "In an increasingly tech-led world, we need to up our game to stay relevant and future-fit."

8% said the social life needs to change and that "Advertising isn't as much fun as it used to be. Just 6% said the money needs to change: "Advertising doesn't pay enough to be working this hard any more".

Talent was asked to share anonymously their views on issues including sexism, burnout, whether working in advertising affects people's mental health, and diversity in the industry.

Advertising's relationship with mental health was the most pressing of these issues, according to talent surveyed, with

38% of respondents saying they have known someone who has faced mental health problems as a result of working in the industry.

35% said they have experienced mental health problems themselves.

Sexism is still a problem in the industry, according to the survey: 36% of industry talent said they know someone who has been on the receiving end of sexist behaviour.

However, 25% of talent said sexism in advertising has changed for the better since they started working in advertising and 21% said they have heard about sexist stories in the industry, but never in their agency.

25% of respondents cited burnout as a problem, saying advertising burns people out faster than most industries. However, 26% said, although the industry does have a burnout problem, it is no worse than most fast-paced, high- octane industries.

When asked about the lack of diversity in the industry, the majority of respondents (48%) said their agency culture
is slowly changing to more accurately reflect the outside world. 31% said their agency already does accurately reflect society. 13% said their agency "talks a good game, but in reality nothing is changing".

8% of respondents said their agency culture does not accurately reflect the outside world. 5 out of this 8 responded that this lack of diversity "gets them down". 2 of the 8 said "it doesn't but does it have to?"

When asked how long they intended to stay in advertising, only 23% responded "15 years or longer". 31% responded "5- 15 years" and 9% responded "0-2 years", with the majority (37%) responding "2 to 5 years".

However, it wasn't all bad news for advertising. 60% of talent surveyed responded "Yes" to the question, "If you were starting out in your career now, would you choose a career in advertising again?".

25% responded, "Maybe" and only 15% said "No".

"These findings are a signal of something I've been saying for a long time," said Michael Scantlebury. "In order to avoid a brain drain of the best talent to other, sexier industries like tech, we need to drastically increase our focus on making great work people care about. We need to make funny work, effective work, work that really reaches people, rather than getting lost in a programmatic bubble.

Rather than getting lost in a programmatic bubble, we need ideas that are funny, ideas that really reach people.

"When it comes to sexism and diversity – I think it's frankly embarrassing that these issues still exist in such a supposedly progressive, open-minded industry: but it's indicative of an old white boys' club that has seen its day, and it's good to see these issues are on the decline.

"Alongside making great work, protecting employees from developing mental health problems should be top of the agenda for agency bosses over the coming months. Reduce stress, improve the quality of the work we're giving people – and hopefully the future of the industry looks brighter."

Chris Hirst, Global CEO for Havas Creative Network and author of 'No Bullsh*t Leadership' said: "As an industry,
our single most important asset is the quality of our creative talent – our very survival depends on it. Talented people have always had choices – even more so with the pace of disruption today – so we clearly need to work harder to hold onto them.

"This means creating a culture which attracts them, as well as laying out clear career paths to hold onto them. Those career paths will be far more diverse today than they once were – some people will want more opportunities for learning and progression; others more flexibility to focus on outside pursuits; and, in age of great uncertainty, others will want more reassurance and support.

"Building an environment which flexes around the diverse needs of those very different individuals – where people feel there's something in it for them as well as us – will be central to keeping us future-fit."

Josh Krichefski, UK CEO at MediaCom, said: "Advertising is an attractive industry which appeals to many. But we've relied on that for too long. We haven't always made the most of people's talent or taken care of them enough and this has been heightened by the way our industry has transformed. Advertising provides diversity of skill sets and career paths – but we need to help grow people's skills and nurture our people to unleash them.

"Similarly, we must address the mental health challenge in our industry. As exciting as the media is, there is a high- pressure 'sink or swim' mentality often celebrated which is damaging to our people and our industry. If we're going to attract and retain talent, we need to fix that and make sure people know as an industry we are dedicated to doing so."

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