There are some huge technological changes coming down the line that haven’t quite hit the marketing and media industry as yet. However, like massive waves a long way out at sea - they are on the way. Think about the effects of the ‘cloud’, or in other words, the limitless amounts of storage space that the web provides and the speed at which people are filling it up with personal information, creating scrapbooks about every tiny aspect of their lives for clever folk to analyse and decipher. Or the rise of the mobile web driven by new types of groovyware that mean we can log onto digital grapevines wherever we are and snack on a mixture of tips, opinions, offers and suggestions, all personalised to our own specific interests and passions. Or the reality of products being linked to the web and providing information about themselves. All huge waves that are about to crash onto the doorsteps of brands and global businesses seeking to maintain the mainstream audiences that drive their revenues, balance sheets and state-sized market valuations. When trying to understand this kind of epic-style change, I’ve been wondering about other industries that have dealt with similar levels of disruption. The one I keep returning to is the global financial services industry that underwent its so-called ‘Big Bang’ in the middle of the 1980s, with its epicentre in the City of London’s Square Mile. The specific date of the ‘Big Bang’ was the 27th October 1986, an event driven by the Tory government overhauling the way the London Stock Exchange was regulated. The primary changes consisted of...
...introducing real-time electronic trading, the ending of fixed fees and opening up the markets to global competition. These were all means to an end for Margaret Thatcher, the then British PM, who was keen to swing her infamous handbag through the Old Boys Network that ran the City, fuelled as it was by cosy cartels of blue bloods from the British establishment. The changes had been a long time coming and the result was that the City of London’s traditions, epitomised by the City gent’s bowler hat, were swept away by brutal levels of competition. Similarly, the City's long boozy lunch culture disappeared as illustrated by the highly-carnivorous, yet famously-lunchless Gordon Gekko. A huge explosion of data created a global market that overwhelmed the Old Guard and let American Institutions into largely take control.
Sound familiar? Whereas Thatcher forced the issue in London’s Square Mile, similar factors have played out in the marketing and media industry over a longer period of time. Anyone working in the industry in recent years will recognise the impact of changes such as the end of fixed media commissions; the internationalisation of markets through the rise of digital and networked media; and the explosion of data as vast technology companies, mainly from Silicon Valley, have snaffled the media lunches of Madison Avenue and London’s Soho Square. And just as the City of London’s traditions and culture was changed for good so has that of the media business. Many may miss the booze-fuelled Mad Men hedonism, passive punters and ‘malleable’ research techniques. However, there is no doubt that they've all gone for good. And that the new world is just taking shape with those giant waves peeking over the horizon, as it did in the City of London 25 years ago.
Now of course, the comparison doesn’t bear forensic examination. And there are clearly many people who consider the rise of algorithmically-driven global trading desks to be a development of the worst kind. Also the marketing and media industry, while massively influential, doesn’t have the kind of fundamental affect on the world’s economies that the capital markets tend to have, as we have all too rather painfully discovered in recent years. However, the degree of change that the global marketing and media industry, worth about $700 billion dollars a year, is about to experience is comparable.
So what lessons can be learned? Well I don’t profess to be any kind of expert on financial services. However, we can all see that the Big Bang created winners and losers on a massive scale. The constant discussion of bankers bonus’ at levels that seem to be from another planet tells us that. And, living and working near the City of London as I do, where you can still spot the odd bowler hat, it’s easy to pick up on its sense of power and ruthless excesses.
It would be quite easy to match the post Big Bang dominance of London’s Square Mile with the rise of Silicon Valley’s giant digital media companies, that are mainly responsible for driving the world’s media markets forward in futuristic ways. And for that reason, maybe the industry’s new landscape is actually already in place. However, we can also reflect on the way in which the world’s financial markets seem to have become unhinged from their local communities and let technology turn them into global roulette wheels in the sky. Should the media and marketing industry lose its ability to tell a great yarn or produce genuinely creatively inspiring ideas, it could end up the same way. More of an intrusive blight on people’s lives than signalling to consumers the path to good value and trustworthy brands.
In reality I suspect we’ll just see further blurring and blending of the nous of the marketing and media industry with the brute force of the technology companies, combined with Hollywood's blockbuster appeal. However, one thing is for sure, there will be winners and losers along the way. And, while it’s always a novelty to see a city gent in his bowler hat and pinstripes marching through the City of London, I wouldn’t want to walk a Square Mile in his handmade shoes.