Where the Advertising Industry will see Economic Growth Next
The long-time dominant U.S. and U.K. advertising centers are in an unfamiliar position. Though they seem to be stabilizing, they are not currently pacing to return as the global leaders we’ve always known.
In their place, Asian businesses and Asian agencies stand to bounce back stronger.
In recent weeks, we’ve seen the U.S. ad industry show signs of recovery. Following an unfortunate wave of layoffs, agencies are now resuming hiring, brands are holding reviews, and new business is being won. During a year that seemingly just won’t end, there’s a general sigh of relief as we head into winter and the market shows a general upwards trend.
But, for an industry built on the success of the brands that it serves, growth within ad agencies will always be a lag indicator. To map the more accurate path of recovery, the industry will have to follow the money.
“[T]he uneasy feeling of uncertainty that began with the outbreak is harming businesses in the U.S. and western Europe.”
China, Korea, Japan, Singapore. Many of these countries are functioning at or near pre-pandemic ways. The same is true for New Zealand and Australia which are similarly rebounding. These countries’ national responses demonstrated the value of strong government infrastructure investment in technology, medical care and in providing a unified national message to their citizens.
When looking strictly at economic health, the major western hemisphere economies – namely the U.S., Brazil, Mexico, Argentina, and Colombia – have struggled to manage coronavirus and its spread. The pandemic in the U.S. has accelerated the collapse of traditional retail and the further dominance of tech companies. Add political instability, and the light at the end of the tunnel seems to be flickering out.
There is another factor at play, one far more important to the creative personalities who make up the ad industry. Across the board, the uneasy feeling of uncertainty that began with the outbreak is harming businesses in the U.S. and western Europe. In an industry that (rightfully so) plays to the needs of creatives and their mental wellbeing, the added layer of stress from isolation, limitations on travel, the constant fear for one’s health, and a deep political uncertainty is all taking a major swing at productivity.
Conversely, consider the Asian ad market where agency employees are experiencing the return to a mostly normal life. Most are now back at the office (with protective measures). With clearer minds from a better quality of life, we can expect agency creatives to produce a better product for the growing business opportunities in the region.
So, what does this difference in outlook mean for the industry as a whole?
“[W]e can expect to see soaring movements like TikTok and K-Pop reaching our doorsteps much more quickly with the Asian market driving more of global youth behavior.”
Firstly, global agency networks that are strong in Asia (think WPP and Publicis) and Dentsu will see a welcome economic lifeline. Agencies like MediaMonks, which is growing rapidly and primed with multinational experience, will also benefit. Asia will play a solid role in these agencies’ growth.
And because advertising often elevates cultural movements to a much larger stage, we can expect Asian agencies to play a much stronger role in defining global trends. It’s the principle in politics called “soft power” which identifies the ability to appeal to others, as opposed to changing them by force or coercion. Whereas in the past Asian countries’ impact on the U.S. tended to be in products, like cars, phones and household supplies, we can expect to see soaring movements like TikTok and K-Pop reaching our doorsteps much more quickly with the Asian market driving more of global youth behavior.
Unfortunately, the longer that U.S. and western agencies continue to work exclusively remotely, the greater the blow to company culture. True, the industry has long romanticized culture with ping-pong tables and snack bars, but it’s a necessary component for high-quality creative product and happy teams. The current remote format is in place to survive, not thrive. Teamwork is much harder to achieve when employees are isolated at home behind screens, even if the isolation is necessary to keep employees safe and secure.
The Asian markets are set to attract young and emerging talent with ‘Silicon Valley-esque’ opportunities. Up-and-coming creatives will want to be at the forefront of the innovation brewing there – whether it’s cashless payments, super apps, or the undefined ‘next big thing.’ They’ll be excited to participate in the upswing and growth. The opportunity is on the horizon to follow the market where it is heading: Asia.