“Nobody wants a prediction that the future will be more or less like the present, even if that is, statistically speaking, an excellent prediction.” – Nathan Myhrvold

The good news is that the present seems better than the past. According to Gallup, in FY 2012-13 the growth in advertising spend was about nine percent. While this is not exceptional given that inflation was over seven percent during the same period, it does reflect an improvement. In dollar terms, the growth in spend was close to three to four percent, in line with average global ad spend growth.

However, the overall spend on advertising is still low. Pakistan’s advertising to GDP ratio, a frequently used barometer to measure the development of the industry, continues to be under penetrated at about 0.2% – a quarter of the global average and half the average of low income countries. An explanation for this is the ‘lazy branding’ phenomenon. Similar to the concept of ‘lazy banking’ in Pakistan, where according to the article in The Economist (Lights off) published in February 2012, banks simply invest in government bonds and enjoy guaranteed spreads. The government’s appetite for bonds does not slow down due to their need to continue borrowing.

Similarly, ‘lazy branding’ can be attributed to the trend of region-based advertising requiring simple local adaptations; a lack of aggressive competition and true differentiation leading to complacency; celebrity-based advertising calling for little creativity and finally, greater focus on execution efficiency (doing things right) and neglecting effective planning (doing the right things).

In fact, in a world of increasing communication channels and media, fragmentation is making it more difficult to determine what the right thing to do is and there is incremental pressure to determine which half of the ad spend is working. I recently discovered, to my amazement, that while Peoplemeters have been in the market for some time, planning continues to be GRP-based instead of effective reach and frequency. Yet the latter has been the major driver for planning in most developed markets since the 90s.

The chart below (from www.agilebacon.com) gives a simple view on the interaction between efficiency and effectiveness.

The best example is a brand manager proudly telling his boss how he under-spent the marketing budget and still made the sales target by exercising greater efficiency. The boss turns around and tells the brand manager how much extra sales could have been achieved had the remaining budget been spent effectively.

1.) Greater accountability

This will result from the fragmentation in the channels of communication as the market begins to grow and competition heats up.

2.) Continued pricing pressure on agencies

Due to the price sensitivity of the Pakistan market, it will limit the potential of the industry. In recent pitches, I have noticed the prevalence of advertiser’s value for agency services. In short I could picture myself at Empress Market with the customer asking ‘advertising kese kilo diya?’ Even if an agency’s creative work is preferred, the bottom line mentality prevails. This mindset is extremely detrimental to the industry as it makes it a commoditised service.

3.) Challenge in attracting and keeping talent

Due to pricing pressures in the industry and the perceived situation in Pakistan. This trend will continue in 2014 due to the lack of growth opportunities for senior talent and the situation in the country. The number of people and the quality of talent who signed up for job groups related to Expo 2020 in Dubai is an indicator of the issues to come. A challenging work-life balance and flexibility offered by work through sites such as www.elance.com is encouraging more freelance set-ups. The issue of being over worked was recently highlighted by the death of a copywriter in Indonesia. She posted a complaint on Twitter: ‘30 hours of working and still going strooong.’ She collapsed and died the following day. Reaction on social media says it all. The agency world has never been the most financially rewarding career option but it was a playground for people driven by a passion for creativity.

4.) The rise of the youth segment

Every marketer is aware of the importance of this segment but very few are successfully talking to them. The young are better informed and seek authenticity. Gimmickry, platitudes or patronising them will not cut it. Competing for their time and attention is challenging given their access to the broader socially digitised world. They seek brands made for their needs and not just advertising that appears youthful. Many are socially conscious and concerned about the future.

5.) Continued growth of international brands

This will be fuelled, evolving customer expectations particularly in retail and entertainment and will provide new engagement opportunities and improve customer service and relationship marketing. Spending more time in malls or cinemas may require the marketing mix to reflect the need to increase spending on the different stages of the purchase funnel.

6.) Content and sponsors will begin to merge again as they did in the 50s

Brands will integrate with or become producers of content. International franchises such as Pakistan Idol will initially drive this trend but the learning from it should give impetus to indigenous content. Content will extend across platforms particularly in the digital space.

7.) Content in the digital space will be better planned

Social media will trend from earned to pay as platforms try to improve content and monetise their investment. Given the explosion in the amount of content generated online, quality and originality will become integral. Greater social mobility driven by the advent of 3G (hopefully) and smarter phones will provide brands a new medium – consumers, who will increasingly become beacons of content, making the brand experience even more critical. Cheaper and more accessible bandwidth will intersect with the modernisation of the retail experience in the form of online retailing creating access to new markets and spawning a new wave of entrepreneurs.

8.) The advent of ecommerce

Fuelled by the efforts by banks to develop payment gateways offering merchants the ability to accept credit cards online. A couple of major banks are poised to offer this service in the near future.

9.) Blurred lines

The lines between the various disciplines of the marketing communication mix will continue to blur (advertising, PR, activation, digital, social, etc.), and the structures of agencies will continue to morph. An agile marketing approach inspired from the tech practice of agile development should replace rigid, process oriented structures to improve speed, predictability, adaptability and creativity.

10.) A cultural shift emanating from entrepreneurial start-ups

There is a well-intentioned effort to foster entrepreneurship in Pakistan which is creating a need for ownership. As a judge for Crack-it, a great initiative organised by the Pakistan Advertisers Society, I witnessed some very creative ideas from students and collaboration across different colleges and organisations. This spirit is important to not only foster innovation in organisations but for Pakistan’s progress. Hopefully 2014 will be the year of innovation.

“The best way to predict your future is to create it.” – Abraham Lincoln

Amin Rammal is Director, Firebolt63, The Brand Crew and APR.
amin.rammal@firebolt63.com