Alan VanderMolen's 2019 Industry Predictions

— Alan VanderMolen, Former President, International & WE+ 

Communicators – whether in-house or at agencies – have had a wild few years of accelerated change.  Some good. Some less good.

We’ve seen the steady decline of the mainstream media business model, resulting in less real estate for the craft of earned media. We’ve witnessed the rise of paid social platforms simultaneously giving us a growing channel while yielding the authority of so-called public relations to those more adept at managing media budgets. We’ve seen the advent of content marketing providing a space for innovation, while also placing disproportionate power in the hands of performance marketing models. We’ve witnessed the preceding have a chilling impact on both growth and margins at large and small agencies. We’ve seen earnings pressure on marketing services holding companies force consolidation. We’ve seen a trend towards appointing lawyers or political operatives into Chief Communications Officers (CCO) roles resulting, in some instances, in an anti-communications bias and, in others (thankfully), a push towards greater engagement and transparency. We’ve continued seeing senior communicators become subservient to senior marketers in many consumer brand organizations, while witnessing the opposite in many business-to-business plays.

I could go on…but, I won’t. Instead I will turn to what I see as 2019’s coming Communicators’ Renaissance.

Our world – and therefore the public sector, the private sector and NGOs – is faced with thorny and very real threats to what I will call the operating environment. We must conduct the business of the day against a backdrop of rising nationalism, fake news, a crisis of credibility for sources of news and information, trade tensions, ideological polarization, a simultaneous demand for, and fear of, technological innovation and the depersonalization of engagement (ie, platform dependence over human interdependence).

It is this mix of pressures and realities that gives rise to The Communicators’ Renaissance. A massive opportunity for us all to be actively engaged in impacting the direction of our organizations and/or our clients while making positive impact on the stakeholders they touch.

Never have the skills, sensitivities and competencies of an enlightened breed of communicator been greater. A breed which understands the craft of credible, 3rd-party validated communications. A breed which understands the art of respectful and informed dialogue. A breed cut from the diverse parts of society which make up the stakeholders critical to the success of our organizations. A breed which has the substance and gravitas for the much-discussed and endlessly sought-after seat-at-the-table with other ‘C-Suite’ executives. And, finally, a breed equipped with insights and analytics leading to more focused, effective and timely creation of branded, engagement-enabling content.

Against that backdrop and with the opportunity for The 2019 Communicators’ Renaissance, here are my predictions for our practice and our industry this year.


1. The Re-Emergence of the CCO

Following years of tug-of-war with CMOs for CEO favor and/or an ability to influence or manage paid budgets, the CCO will re-emerge this year to a position of corporate and boardroom prominence. The aforementioned environmental factors make engagement and stakeholder-sensitive decision making organizational core competencies. Dispersion of authority and the complete crumbling of top-down, authoritative media models have combined with unprecedented technologically-driven change, making modern communications and engagement central to organization and societal success.

2. A Communications Troika

Globalization and democratization of information and communication platforms means that organizations can no longer have corporate communication, marketing communication and policy communication in silos. The notion of separate and distinct stakeholder groups for diverse subject areas related to one organization have given way to stakeholder demand for transparency and access across organizations, and relative to topics spanning issues, products and policies. 2019, therefore, will see the globalization of a trend I am seeing in emerging markets of corporate communications, marketing communications and policy communications coming together to work closely to drive organizational agendas across functions.

3. New Competencies

To varying degrees, communicators – again, in-house and at agencies – have given lip service to the twin needs of understanding the technologies that are driving commercial and societal innovation, and the technologies that are enabling communication platform innovation. In 2019, driven largely by data privacy and security concerns, and increasing AI and machine learning capabilities, communicators will aggressively acquire technology and emerging platform competencies. Not only are those competencies required to enable communicators’ understanding of the operating environment, but more to the point, the competencies are required to provide informed and adept advice to both sponsors and clients.

4. Private Equity and/or MBOs at an Agency Near You

Coming off of roughly 18 months of holding company consolidation, one thing is clear to me: It is not going to slow down. The multi-branded, multi-disciplined holding companies will continue to struggle with how they put clients and talent at the center of their models. And, while this is starting to look like it is taking some shape (see the shareholder package from WPP’s investor day in December), there is still much shakeout to come. To that end, I see opportunities for PE and/or MBOs in the communications space in the coming year. Taking communications brands private, alleviates pressures on holding companies to deliver on (unreasonable?) short-term investor expectations while simultaneously allowing investment in the craft, the clients and the talent.

5. Sector Growth

While growth pressure will remain intense on communications agencies sitting above the roughly US$400 million or so mark in revenue, I do see high-single digit growth returning to the sector in 2019. Most of that growth will come to agencies in the US$50 million to US$200 million range, with multi-market footprints and with clearly differentiated offers. Part of the malaise the industry has witnessed in recent years can be attributed, in my view, to the struggle for big agencies to clearly define what they sell and to whom they sell it. Mid-size agencies – and privately-held ones – are largely immune to that particular challenge.

Have a great 2019.

And, please do let me know what you think.