Mondelez global media innovations director Pete Mitchell on why agencies must be more transparent with client fees, and why the company is shifting marketing budgets to messenger platforms such as WeChat.
Publicity matters, so we make a song and dance about what we do. At Mondelez, we are fortunate in that we have global budgets to do the extraordinary, and it’s an important part of our job to tell the world about it. Some of the great stuff we have done – like Trending Vending’ at SXSW last year and 3D-printed cookies – is part of a cultural shift, to get people in our industry to stop thinking corporately and to go and think like a start-up.
We have a culture where we ask for forgiveness; we don’t ask for permission.It is down to people like my boss Bonin Bough [?vice president of global media and consumer engagement], our new CMO Dana Anderson, and also Josep Hernandez [senior director of communications planning]. We are new, a start-up ourselves, only just over two years old. We have an internal culture which is very much trying not to be Kraft, and therefore we have a different outlook which is about being part of the now, and making sure our brands resonate in popular culture. We like to be a thought-leader and a first-mover, and it is one of the main reasons I joined.
It is not about 360-degree communications planning, but rather finding the right 36 degrees. We are trying to do something in a way that it has not been done before, and we have latitude to do that because behavioural habits have changed so much. It’s not just a case of adopting all channels – 360-degree planning is just an opportunity for creative agencies for produce an asset for everything and make loads of money.
We’re all spending more money – media is an increasing industry, year on year, and we’re spending it in more areas than we used to. TV is generally losing revenue, and is streamlining itself. Digital and social are obviously increasing massively. From our perspective, we believe there is going to be a lot more money going into the bigger platforms such as Facebook, Google, Twitter and WeChat in China.
It is quite scary what Facebook is going to become. It does the job of media, as well as everything as well. And it’s not expensive, not compared to other media. Here was something that came along as a social network and it grew and grew. All the naysayers say it has plateaued, and every time you say that it grows again. With that many users accessing their page on average 14 times a day, you become bigger than mass-reach TV, and that is interesting when you know who every single person is on your platform and everything about them.
Programmatic is here to stay, we know that. It is increasing in importance and there is no reason why you wouldn’t buy all your media programmatically. We’re just in a transitional base between the old way of doing it and the new way of doing it. And clients start to sit up and take notice when a lot of digital spend it being bought programmatically, and certain buying agencies are working in undisclosed margins.
If agencies work on a margin of 40% to 60% and don’t tell their clients, that is where lying starts. Don’t get me wrong, media agencies have been forced to do this because clients have been screwing them down on costs for a long time, and that is something we have to solve. A race to the bottom is not the right thing to do. But, where we at the moment, we need to be in a position where we understand what margin is, and to work out a fair rate for what they are doing. You can’t be an agent working on behalf of a client if you work on undisclosed terms – that is tantamount to fraud. It’s shouldn’t be 50%; it should be more like 20%.
We have gone from websites to portals, then to social, and now we’re moving to messenger platforms. LINE and WeChat are making huge strides in terms of where messenger platforms are headed. In the case of WeChat, it has become transactional, as you can make purchases with a virtual currency. Purchase through social is where it is going to go next, with an awful lot of regulation yet to come. We’re going to do a lot less in social networks, as we used to call them, and a lot more in messaging platforms.
Pete Mitchell, global media innovations director at Mondelez International, is chair of the judges for the Festival of Media Asia Pacific Awards 2015