As BPool advances in its regional expansion, the long-awaited North American market is the next big thing. It is the largest advertising market in the world in terms of investment and one of the largest in terms of number of players (USD 240 billion and around 40 thousand companies, respectively, according to the Statista website).
If the numbers above aren’t enough to make you curious about the American market, here’s another piece of data that might catch your attention: in Uncle Sam’s land, one in three advertisers plans to switch agencies in the near future, according to Setup.
But what do these numbers say about the American market? And what to do about it?
In this month’s Featured Story, we spoke with Diego Prusky, CEO of InPulse Digital, who has been in the US for nearly 20 years and is well aware of local challenges. Check it out!
Q: Diego, you’re Uruguayan, but you moved to the United States nearly 20 years ago, so it’s fair to say that you have a deep understanding of the Latin American and North American markets, right? In your opinion, what are the main similarities and differences between them?
A: It has actually changed significantly with the Internet and smartphones. 20 years ago music and pop culture were very local. Today we have an interesting mix of local culture, combined with global trends.
Spotify is a great example of this: eight of the top fifty global songs of 2021 are Latin, but when you look at each country in Latin America it typically has some very local, unique trends too. Netflix is another great example of how shows like Money Heist (La Casa de Papel) became a global hit and influenced culture around the world.
What makes a big difference is understanding the environment for the consumer that we are connecting with, and this is influenced by their heritage, income, culture, and trends. An immigrant in the US quickly gets used to the safety, quality of service, infinite options, as well as the new challenges of living in the US, and that changes their perspective on needs and wants.
Q: A recent study published by Setup has revealed 1/3 of brands are considering change of agency in the next six months. How has the relationship between agencies and brands changed over the years and what’s the current landscape?
A: The digital transformation has changed where agencies can provide value. In the past brands needed a creative and a media agency. Today digital media is easy to buy and creativity can come from boutique agencies. Digital transformation is much more than marketing, allowing consulting companies (Accenture, BCG Digital Ventures, etc) to provide value by looking at the overall business needs.
There’s a convergence back to creative and media for digital, but most agencies are not prepared to fix this. The culture, leadership, are very different even within the same agency groups. As a result, you have creative agencies that don’t know how to work with digital media and Media agencies that won’t or can’t optimize for the client’s best interests (it’s hard work).
Culturally, clients have moved to value efficiency and expertise, with COVID accelerating this. Expensive offices and client entertainment have lost the little value it already had.
With some important differences, I look at the financial industry. Buying stocks used to be expensive and banks charged hefty fees. Then came digital companies and ETFs. Only those that adapted and offer value can compete against the SPY (S&P500 ETF).
We see clients looking for digital-first creative, aligned with their media plans that prioritize digital media (YouTube, Social, Programmatic), that have a strong strategy team, and understand the paid media requirements.
Q: The US ad industry is populated by almost 40 thousand companies and amongst them, roughly 13 thousand are agencies. It’s also known that freelance offering grows steadily in the creative industry, so what must an independent agency do to thrive?
I follow former Intel’s CEO Andy Grove’s advice, particularly the one about only the paranoid surviving.
- We become an extension of our client’s team. For most clients, we provide a dedicated team with support from our senior strategy, analytics, creative operations. This allows us to be very price competitive, have an always-on relationship with the client, and help them as they grow and evolve.
- We are focused on constant change, adapting our services to what brands need. It’s not uncommon for 20% of our revenue to come from a new or expanded service in one or two years. This allows us to help brands adapt to their needs.
- Specialize. We have deep expertise in certain industries and consumer groups. We partner with a very small group of agencies to collaborate on projects where we don’t have that expertise, such as in pharma. We don’t take other opportunities that don’t take us where we feel we need to go.
Q: As mentioned above, the US creative industry is highly complex and competitive. How do you see the role of BPool in this context?
A: We have deeply enjoyed working with BPool in Latin America and are very excited to see the launch in the US. BPool is perfectly positioned to support brand managers in the US that would love to test and innovate with independent, creative agencies but the process of procurement and onboarding makes this impossible. As a result they are working with what they can, not what they would like.
Q: What are the 3 key things – technology wise or behavior wise – that you think will drive most change in the creative industry in 2022?
A: I try to read books outside of business. It helps me look at things from a different perspective. Most of us are incapable of looking at 500 let alone 5,000 years into the future. So I’m glad you’ve recognized my limitations and only asked about 2022!
- TikTok was the most visited site in 2021, above Google.com for the first time (according to Cloudflare). TikTok has impacted the music industry in particular, but it’s a potentially huge game-changer for many areas as can be seen in the news daily (just look at Miss Excel).
- The end of the cookie was a big issue in 2021. It’s created a lot of challenges with the release of iOS 14, especially for performance media. It means adapting, looking at first-party data collection practices, and it may help digital publishers that were hit hard by Meta’s targeting and data capabilities.
- The boring but probably biggest impact will be how the changes accelerated by Covid will generate opportunities for innovation. Covid has changed many perceptions of what we thought was ‘normal’, giving us permission to innovate and I’m excited to see where it takes us.
NFTs and Blockchain offer new opportunities, both cases where consulting or specialized companies are better equipped to develop these, especially the larger initial investments.
Longer-term, the Metaverse was of course the word of the year. Microsoft still has some advantages but Meta is investing a crazy amount of money. I don’t see this as mature yet. We’ve been hearing about it for over 5 years and haven’t really seen that many use cases.
Q: Last but not least, which BBQ is better? American or Uruguayan?
A: The one you eat at my home, of course. Ideally prepared with Uruguayan beef, but there are many good options as long as it’s medium-rare.