The interview below originally appeared in IPMARK magazine on Sept. 20, 2017. It has been translated into English and reposted.
The fact that the future of the advertising industry will be in the hands of mathematicians in a few years is a reality that is worrying for many. But not for Alfonso Rodés. The deputy CEO of Havas Group and chairman of Havas Group Spain, he is a great believer that algorithms and cognitive technology are opening up the gates to endless possibilities, some of which are still beyond the imagination of agencies and their clients.
“When my children tell me they also want to go into advertising I always ask them the same question: how are you getting on in maths?” comments Rodés, who has no doubts when predicting dark times ahead in the sector for anyone who hasn’t got a good grasp of figures. His certainty regarding a 100% technological future became patently clear a year ago, when the Havas Media Group took one more step in its already long-standing collaboration with IBM, with the launch of a project (Havas Cognitive) to introduce Artificial Intelligence solutions applied to creativity and cognitive marketing.
Is Artificial Intelligence the new Eldorado for the world of advertising, marketing, and communications?
It most certainly is for the Havas Group. Every day we witness the progress that Artificial Intelligence is making possible in the fields of medicine and engineering, and which will gradually spread into other areas. In our case, I am certain that it will make us become better advertising professionals. We are still learning, but it is clearly an avenue of the utmost importance for the company.
And programmatic technology? Is it going to be a core player for media agencies or are we witnessing a fly-by-night trend?
Technology and data are acquiring greater prominence at media agencies all the time, simple as that. Programmatic advertising will end up being one more channel for buying ad space. It won’t be the only one but it will be extremely important. Five months ago the Havas Media Group launched the CTS (Client Trading Solution) platform. This is a tool which guarantees brands complete transparency in costs, investments, results, inventory, and providers and so on.
The global head of the Havas Media Group and chairman of Havas Group España feels that the lives of advertising and communications professionals have become extraordinarily complicated in recent years.
Transparency would appear to be programmatic advertising’s Achilles Heel. Might the pockets of fraud which we are always talking about compromise the future of this technology?
Lets’ not ask for the moon. Programmatic advertising is barely five years old. And it didn’t become popular among advertisers until barely a year ago. No tool is perfect right from the outset. You have to let it evolve, perfect itself, and we must indeed most certainly demand complete transparency.
I’m sure that programmatic advertising is here to stay because it’s useful and enables us to optimize the purchase of ad space for the advertiser. And not just on digital. Soon it’ll be arriving on other media platforms, like radio, outdoor advertising, and television.
Do you think that, to a certain degree, the advertising industry has made digital evangelization its mission?
I’ll tell you something that worries me. It’s a very odd phenomenon that has taken place in our sector. We all agree that the digital transformation has served to simplify and improve relations between brand and consumer. We have examples like Spotify, Airbnb, Uber, and so on. And yet, we advertising and communications professionals are traveling in the other direction. If our task was never easy, now we’ve made it even more challenging. Countless new disciplines and intermediaries have emerged, hundreds of micro-agencies which are ultra-specialized in multiple channels. The lives of brands, of agencies, of communications directors, of all of us working in this industry, have become much more complicated. And if to that we add the speed of adaptation that we need to continually maintain…
I always say that when my father (Leopoldo Rodés) created Media Planning in 1978, the market took almost 15 years to admit and take on board that a shift had taken place. Today we barely get six months to introduce a new discipline or a new technology. You either manage to do that or you’re out.
How do advertisers come to terms with that complexity and, at the same time, the enormous number of options that technology is putting on the menu each day?
They are overwhelmed, to be sure. At the Havas Group we try to make their lives simpler with a simple proposal that brings together solutions that are tailored to their briefing. We don’t want them going crazy. That was the idea behind the Together strategy, which began in Paris five years ago and which has taken shape in the creation of the Villages, which number 48 today. But it is true that it proves complicated for the advertiser because every day they have to deal with the proposals they receive not just from the major communications groups but also from a legion of agencies specializing in programmatic advertising, social media, and influencers and so on. It is pretty overwhelming.
MESSIS AND RONALDOS
Alfonso Rodés argues the case for an enterprise model in which teamwork replaces the empire of the ego.
What is the assessment of the first year since the Madrid and Barcelona Havas Villages came into being?
Extremely positive. It’s a case of working together, bringing together all of our agencies and teams from different areas in a single space in order to break down barriers, communicate with each other better and make the most of everyone’s talent and be able to provide our clients with the best possible service. We have shifted from the individual gameplay of egos to one of teamwork. This means a brutal shift in mentality, but one which our business needs to take on board.
But aren’t we just talking about integration again?
Not exactly. Rather than integration, I would talk in terms of collaboration. Being really capable of working as a team is not an easy goal to achieve in a world full of egos. For me, the creative director is just as important as an expert in programmatic advertising or a marketing buff. The Messis and Ronaldos of this world are nothing without the combined power of the team. At the Havas Group, we have professionals who have been extremely important, and who continue to be so, but they have had to come to realize the importance of becoming part of the group in order to attain an objective.
Furthermore, I have an issue with what is normally understood by integration, which basically means “I like what you do, join me, I’ll eliminate you and do it myself”. My idea of integrating is “I like what you do, join me and we can do it together”. A more collaborative concept.
As well as managing egos… Was it easy to retransform the company’s talent? Do you find it hard to seek out new digital faces?
Retransforming talent has been one of our priorities for some time. There is a lot of training, a lot of coaching. A little while back we all, myself included, had to get up to speed on programmatic advertising. We need to lend a helping hand in crossing the digital bridge.
As for recruiting new faces, an important change needs to be noted. We used to look for talent in schools of communications. Now we go to faculties of Mathematics, Statistics, and Engineering. We need people with a real head for figures. At Havas Group España we hired our first statistician in 1997, and by 2000 we already had mathematicians on our staff. We are marketing people with a gift for numbers.
And in this new scenario dominated by mathematics and statistics, what place does creativity occupy?
It is vital. In such a saturated environment, with that media complexity, only really potent levels of creativity can keep you afloat. The creatives are needed more than ever, and their work has become a whole lot more complicated. It is necessary to have an increasingly in-depth knowledge of the client; you no longer plan media resources you plan audiences. Creatives are fundamental.
How would you rate the current situation of Spanish creativity?
In the light of the last Cannes festival, I would say it wasn’t bad. Personally, I expected more, a sort of creative resurgence after all these years of hard times. Something akin to what happened in Brazil or Argentina, where after their respective crises they were witness to the emergence of really inspired generations of advertising creatives. At the Havas Group we can’t complain. This has been a record-breaking year, with 41 Lions, 19 of which were won with the “Like my addiction” campaign (BETC París).
A PERFECT FIT
For Rodés, creativity is needed more than ever in a context dominated by technology and numbers.
Arnaud de Puyfontaine, CEO of Vivendi, described the recent Havas Group purchase agreement as “a perfect fit in an industry marked by a convergence between content, distribution, and communication.”
And so it is. This operation fits us like a glove. Knowing the communication industry’s movements of the past decade, you could see this agreement coming. Vivendi has followed a leadership strategy in the content, media and communications industry. It has the first two areas well covered (they own Canal + and Universal Media), so they had to reinforce their positioning in communications. And from our side of the fence, Vivendi opens up a huge gateway in the field of content, which is extremely important for the Havas Group at this time. Music, film, the production of TV programmes and gaming, these are areas in which we have increasing interest. Associating ourselves with Vivendi also gives us the economic resources necessary to tackle acquisitions in strategic sectors.
According to Infoadex, Havas Media leads the ranking of media agencies in terms of volume of investment managed. However, the group’s global results have undergone a slow-down in the first half of the year…
The Havas Group has not escaped the investment readjustment that advertisers have carried out and which the sector, in general, failed to predict. Growth has been less than we expected. Advertising investment has not matched the market’s growth patterns, and this is something new which we will have to get used to. Looking forward to the end of the year, the agencies will have to make an effort to readapt.
DIGITALIZATION: NO NEED TO GO OVERBOARD
Are you worried by the fact that Spanish companies come so low in digitalization rankings? Do you think the figures match the reality?
The figures don’t surprise me, but they don’t worry me all that much, either. There’s no need for us to go overboard about the results of these kinds of reports. What does being off the pace mean these days, with the speed at which technological changes are taking place? Two, three months? Who is top of the league at what? Every day we are witness to veritable leapfrogging exercises led by the African countries who jump to the top of the list in terms of micropayments by mobile phone, or by Asian countries leading the world in social networking. Everything is subject to change overnight.
So you don’t believe in the obstacles to digitalization that are supposed to exist in our country?
I’m not saying there aren’t difficulties, but not insurmountable obstacles. In Spain, there is plenty of talent, digital too. In fact, we export it. Some countries are ahead of us, but only because they embarked on the digital transformation process before we did and have been able to invest more. But here we aren’t sitting still by any means. We haven’t missed the train and we aren’t about to. And then there are the major companies, like Telefónica, BBVA, Santander or La Caixa, which are the digital spearheads of their respective fields.
The outlook, moreover, is encouraging. We have been growing at 3% for the past two years. We have managed to get out of the recession, the most serious one our generation has known, much quicker and much stronger than the analysts predicted. These have been difficult years, with drastic, hard and unpopular measures, but they have borne fruit. Neighbouring countries such as France and Italy are now trying to follow our example.
The Havas Group led new business activity in Spain last year, with a 34.1% share*. Accounts won by the company in 2016 include BET 365, JDE, La Liga, Loterías y Apuestas del Estado, Parques Reunidos and Prosegur. Furthermore, they retained their accounts with Agroliment, Gas Natural, Repsol, Adeslas and La Caixa.
This year Havas Group España has won accounts with Paradores, Sixt Rent a Car, Daikin, Bestinver, Andreas Stihl, Haciendas BIO, the Valencian Regional Health Ministry and the Tourist Board of Castilla y León.
As Alfonso Rodés comments, since 2009 the group has been consolidating its position by winning international clients. Contracts it has won recently include those with Michelin (global), Emirates (global), Sanofi (USA), and Bristol Myers-Squibb (USA).