Click the image to learn more As the year ends, everyone seems to be feeling down. Today, I won't talk about methodologies or knowledge points, but rather share my views on the future of the marketing industry, hoping to give everyone some confidence. Hang in there, friends. I firmly believe that the golden age of China's marketing industry is about to arrive. In the past six months, I've chatted with many people—some agency owners, some client-side executives, and some business owners. Overall, everyone is a bit gloomy. Clients are anxious, unable to find a company in the advertising circle that can solve their problems. Most can do creative and execution, but they can't solve practical issues or tell clients where they should go. Agencies are increasingly lacking a sense of achievement. In the past, agencies were the teachers of clients, guiding them on what to do. Now they're just "ad dogs," mostly doing creative execution work, with little sense of accomplishment. In industry news, this year we no longer discuss whether 4A agencies are dead or not. Y&R and JWT, two global old-school 4A agencies, have truly lost their decades- or century-old reputations, and no one dares to say whether they count as dead. The focus of self-media discussions has shifted to when advertising professionals will lose their jobs. In the second half of the year or next year, layoffs or unemployment—no one can say for sure. Among my traditional advertising friends, some who have reacted quickly would rather take a pay cut and demotion to jump to the client side, just to expand their capabilities first. Others have been interviewing all year, no longer caring about the city, having interviewed across Beijing, Shanghai, Shenzhen, and Hangzhou, only to return to advertising agencies in disappointment. Friends still holding on at 4A agencies have also noticed that their efficiency is really a bit slow. After all, the advertising industry is still a service industry. As clients find it increasingly hard to make money, marketing budgets will inevitably shrink. Looking beyond the advertising circle, the overall environment remains gloomy: private enterprises are struggling, internet companies have stopped hiring or even started laying off, the capital market is out of money, and the golden age of entrepreneurship is over. 2018 is a turning point. In such a gloomy environment, is the marketing industry really doomed? Are there still opportunities? My view is that the current Chinese economic environment and the historical progression of the advertising and marketing industry are both in a transitional period. It's tough for everyone, and difficulties exist, but the future is bright. I believe that within a few years, once this transition passes, our advertising industry will usher in another golden age. The Second Half of China's Economy To see the future of the marketing industry clearly, we must first look at the future of Chinese enterprises: whether they have marketing needs, whether they are willing to allocate budgets for marketing, and whether brands are important. Let's look back a few decades to see how Chinese brands and consumers built the consumer market. The market economy and private economy have only been around for a few decades, developing very rapidly. In this rapid development, both brands and advertising agencies have benefited from the development dividend. That is, as the market scale expanded, advertising was always effective, and brands needed to advertise as much as possible to capture a larger market. Yes, in the past few decades, the most important thing for Chinese enterprises was to capture a larger market, become the industry leader, and then leverage scale and influence advantages to make more money. Before the reform and opening-up, China was a wasteland, with blank markets everywhere in business; as long as you produced a product, you could sell it. The successful methodology of the past few decades relied mainly on three points: first, identify a blank market; second, secure distribution channels so people could buy the product; third, advertise on CCTV so people knew the product existed, and then you could just sit back and count money. Looking at it this way, both enterprises and advertising fees in the Chinese market were too easy to earn. There were vast blank markets and huge advertising demand. Now, it's fair to say that the rigid demand market is saturated, blank markets are basically gone, and consumers' basic needs are met. We need to move to the next stage. Many concepts proposed in recent years are almost all attempts at solutions: the "Internet+" a few years ago, then "consumption upgrade," and at the national level, destocking, deleveraging, and then "supply-side reform." From the grassroots to the government, everyone is seeking a way out to the next stage. There is still a remedy, and the direction is clear, but the pain is inevitable. Overall, our economic development is about to enter the second half. The first half was about meeting rigid demand and filling market gaps; the second half is about supply-side reform, manufacturing good Chinese products, and building good Chinese brands. The recent years happen to be a transitional period, where the previous path has come to an end, and the next path is still being explored. But it's certain that in the second half, we still have significant room for growth; the gap between China and developed countries is the growth space. The core competitiveness of Chinese enterprises in the second half mainly consists of three points: innovation capability, organizational management capability, and brand marketing capability. The above macro trends are mostly existing views; I've just summarized them very broadly. I've said all this to lead to the point that in the second half of China's economy, brand marketing will be a very important part. The true golden age for brand marketers is in the future—at least in China, at least I firmly believe so. Because marketing in the first half was not brand thinking at all; it was positioning and enclosure thinking—positioning a blank market and seizing as much market share as possible before others occupy it. This includes the several major internet entrepreneurship trends in recent years, all of which followed this thinking. From O2O to ride-hailing to bike-sharing, these were all newly discovered blank markets. The capital market injected large amounts of money, and regardless of profitability, the priority was to grab more users first; making money could wait. Meituan, Didi, and Mobike, the eventual winners, indeed did this. This thinking suits the first half. But in the second half, this logic no longer holds. First, almost all industries are no longer new markets or blank markets. Second, consumers have seen the world; they are no longer fooled by brands claiming "this is a good gift." Third, the entire consumer market is upgrading, and almost all industries are globally competitive. So in the second half, the strongest competitive barrier is the brand, and all enterprises need to start building brands. In the first half, Chinese enterprises did two things at the marketing level: awareness and influence, but neither counts as a brand. Next, they need to transform into brands. A brand is something consumers can follow and form a solid consensus with. The Transition Period of the Marketing Industry Above, I discussed the transition period of China's economy, which will be somewhat tough in the coming years. Next, I'll talk about the transition period of the advertising and marketing industry, which is also tough. Note that the transition period of China's economy and the transition period of the marketing industry are not causally related. Although they influence each other, these two transitions are independent, with different reasons. Finally, we'll look at these two transitions together, but for now, let's discuss them one by one. The transition period of the marketing industry is more palpable. Let me first explain what this transition is. In one sentence, it is: the traditional advertising and marketing theories developed from the industrial age are transitioning and upgrading to an information-age marketing system based on internet communication. From the industrial age to the information age, the business model, communication environment, and the way people connect have all changed, and marketing, which is attached to the business and communication environment, must undergo disruptive changes. The current situation is that the methodologies accumulated by the 4A system over a century are becoming increasingly inefficient, but new marketing theories and systems have not yet been established. The brave are feeling their way across the river, while the lazier ones firmly believe that old 4A theories still apply to the new environment. The result is that agency marketing companies are getting further and further away from business. Think about the new brands that have risen in the last decade. They have had no involvement from agency marketing companies. From BAT to TMD to new brands in traditional industries, whether old 4A or new hot shops, they have had almost no presence in the rise of these brands. These brands must have used some marketing thinking and done some right marketing events, but all of this seems unrelated to advertising agencies. Everything in the future is unknown. How long will this transition last? What will the next era look like? Will clients and agencies still collaborate as they do now? Trend: Through the Winter to the Golden Age I am not a person who is very certain about the future. I am in awe of the future and do not believe anyone can predict it. But can we find our coordinates in time and space from historical logic, and through the current coordinates, glimpse a possible direction for the future? Perhaps we can. From a temporal perspective, marketers are experiencing two transitions: one is the transition of China's economy, and the other is the transition of global marketing changes. Both are tough, and it's inevitable to feel lost and fearful about the future. But as long as we know that this transition will eventually pass, China's economy will enter the second half, and the marketing model will also enter the second half. When China's economy enters the second half, a very important core task is to build brands. Whether a company has brand power will be a key indicator of its survival in the second half. Therefore, in the second half of China's economy, brand marketing will be a very important and core task, more than ten times more important than in the past few decades. Then the question arises: if China's economy enters the second half, can our marketing capabilities keep up? Can marketers meet the needs of enterprises to build brands? During the transition period of the marketing industry, the efficiency of past systems and methodologies is declining. Can we quickly explore a marketing system and methodology suitable for the information age? Can we make marketing budgets more efficient? Can we promptly meet the huge demand of Chinese brands? This is also a question. From a spatial perspective, looking at the differences between the Chinese market and the global market, in terms of economic stage, the growth space in Europe and the US is relatively limited, especially in developed European countries where growth has stagnated—recently, Parisians have taken to the streets. Africa is still solving food and clothing problems, and India is another large market but still lagging behind China in early growth. Only the Chinese market is in a stage of transformation and upgrading, from extensive filling of gaps to refined operational upgrades. From a spatial perspective on the marketing industry, China is now developing in sync with the world. First, 4A agencies are globally synchronized; the 4A marketing system is no longer leading in China. Second, the internet is globally synchronized; both China and the world face the changes in the communication environment brought by the internet revolution, both in a transition period, which is global. In the transition period of the marketing industry, China has countless new brands for us to experiment and explore, while Europe and the US mostly have old brands. The problem with old brands is that they are not so bold or brave in trying new things. I once briefly served some luxury brands and found that they are mostly very cautious. Their brand strategies and tones have formed solid consensus, making it hard to change or try new things. Every step is very careful, with little room for trial and error. But China's new brands are a completely different story. So, I boldly guess one direction of the tide: the next golden age of the marketing industry, the next industry leader, and the next marketing system will emerge in the Chinese market, explored by us—the ones reading this article. Marketers in the Chinese market are very likely to lead the next generation of global marketing systems because we have a huge marketing market, countless startup brands needing our services, and unlimited room for trial and error to explore. If so, the next WPP is likely to be born in China, and the next Ogilvy will be one of us. The era we hope for will eventually come. I wish my friends can all usher in their own golden age. Source: Yang Bu Huai (ID: yangbuhuai01)