In a wide-ranging discussion at the 4A’s Transformation conference this morning, Michael Roth, Interpublic Group of Cos. Chairman-CEO, discussed industry hot buttons such as brand safety on YouTube, transparency and measurement issues on digital platorms and the incursion of consulting companies on agencies’ turf.
Michael Roth Credit: Courtesy IPG
Mr. Roth, who talked about IPG’s “open architecture” structure, which gives clients access to all disciplines across its network, said he thinks consulting firms, like Accenture, are trying to get into advertising “because their own business isn’t doing particularly well.”
He added that while they are already working with the C-suite, the consulting firms aren’t going to come up with iconic creative campaigns. “You need special individuals on the creative side, and frankly, I don’t see those individuals working at an Accenture,” he said.
To counter the Accentures and IBMs of the world, IPG is digging into what it calls a “business transformation model,” with R/GA and Huge already working with clients on this front. “We’re bringing more to the table and we can execute on business transformation,” he said.
On the subject of brand safety, Mr. Roth said advertisers are “appropriately concerned” about ads being placed next to unsafe content on YouTube and Google.
“The key to communicating with consumers as a brand is to have a high standard of brand reputation, and if your communication is being associated with something offensive, that is not the way to build brand loyalty,” said Mr. Roth. Some IPG clients, such as Coca-Cola and Johnson & Johnson, have joined other large marketers in halting their ad spending with YouTube until the issue is resolved. Though there are reports that some advertisers are returning.
Unlike rival WPP CEO Martin Sorrell, who said the boycott doesn’t make sense, or Havas, which nearly implemented an agency-wide boycott, Mr. Roth said IPG is allowing each client to make its own decision. He said IPG is working closely with its clients and Google on third-party verification and believes progress is being made and Google “will solve this as best as they can.”
As for Facebook, which faced its own transparency issues as of late, Mr. Roth said the platform has used third-party verification under the recommendation of IPG and the next step is to verify Facebook’s data to “make sure dollars are being spent where they should be.”
“Clients spend a lot of money, and to the extent that they spend that money, they want to make sure the return on investment is proper and make sure they’re reaching consumers,” said Mr. Roth.
Snapchat is a platform where IPG may not tell clients to be “all in,” but still believes they should be advertising there, said Mr. Roth, adding that IPG is working with Snap to develop metrics and make sure clients are getting the ROI they expect. (He also said that he personally does not use it, drawing laughter from the audience.) Similarly, he said Twitter has some work to do in terms of measurement and metrics.
With the upfronts and newfronts coming soon, Mr. Roth said TV is likely to use the recent Google fiasco to pitch linear television. However, according to IPG’s soon-to-be-released Magna forecast, Mr. Roth said linear TV is pretty flat, while digital is up 10% to 14%.
IPG, though, is “agnostic” when it comes to where dollars go, according to Mr. Roth, because the holding company doesn’t have “any economic interest in the inventory.”
Mr. Roth ended the discussion by talking about another pressing topic in the industry: gender and diversity. He said the lack of female leadership is “embarrassing” in the industry, but IPG is making strides, with females making up 40% of its board and 54% of its managers. But even with this progress, he said only 1% of the female leaders in the industry are black, which is “insane” given the marketplace, consumers and clients today. That is why IPG has recently launched a major effort for black women in advertising, he said.
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