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Initiative’s Mat Baxter: ‘The media industry needs to stop being lazy and get off the drug of reach’

The ‘laziness’ of media and adverting agencies could spell the industry’s downfall in the face of  consumers’ changing brand expectations, the global CEO of Initiative has said.

Speaking at Mumbrella360 Asia on the role of culture in a consumer-centric world, Mat Baxter suggested that agencies that simply prioritise reach over relevance will be left competing for survival. 

He said brands are realising that a true connection with audiences is more important than vanity metrics that make client reporting easier.

“Reach is bloody easy, any idiot, with all due respect and I am one of those idiots, can build a plan that delivers reach because all you need is money,” Baxter argued. “It is much harder to architect and build a plan and strategy that creates relevance with an audience. The way to do it is by building a bridge through culture. Culture is what makes something matter to the consumer.”

Laziness is killing the industry, Initiative global CEO Mat Baxter, suggests

Baxter, the former CEO of UM Australia before moving to New York to take up a global position within IPG Mediabrands, suggested the only thing holding the industry back from focusing on reach over relevance was laziness.

“Why we can’t build our business on that simplicity boggles me,” he said. “Maybe it’s because reach is like a comfortable pair of slippers. It’s an easier and more comfortable conversation for us as an industry to have with clients. Talk about relevance and we usually discuss having a long way to go. The simple answer: I think we’re lazy.”

He likened reliance on reach metrics to a drug the industry had to get off and also parked part of the blame for this reliance on brands.

“Get off the drug of reach, get off the drug of ratings and unique users, if they didn’t give a crap about what you are doing, it doesn’t matter, it’s waste of money. If we can have that conversation as an industry, we will be in a much better place.

“Let’s go back a step, we still have clients putting GRP, brand awareness and reach as their number one priority on a plan. To me, that is a massive challenge that we all have to tackle. I don’t have the answer, I am being an antagonist on purpose to get the conversation started.”

The issue of relevance over reach has become significantly greater in light of shifting consumer trends, Baxter suggested, with traditional advertising techniques no longer providing the cut through required to move a brand forward.

Instead, brands needed to get into the consumer psyche and create culturally relevant content, something that was infinitely harder to achieve.

Despite this, Baxter was adamant the work was worth the effort. “Brands that do well are brands like Google, Microsoft, Nike, Apple and Facebook. Brands with a high cultural velocity, one standard deviation above the mean, have 61 per cent higher revenue growth than the standard pool,” he said. 

Brands like Microsoft are getting cultural connections right, suggests Baxter

He went further to suggest that this was intrinsically linked to the devaluation of the advertising industry, as agencies fought to undercut each other and at times work for free, something that wouldn’t be necessary if what they were offering to clients was of higher value.

“When you are sitting in the room and a client is arguing with you, or normally a pitch consultant, about driving price down another 5 per cent and everyone gets their knickers in a knot and everyone is throwing things all over the place, different offers from different agencies etcetera, there is 61 per cent sitting on the table available to optimise and grow the client’s actual business through smarter planning,” Baxter said.

“Moving away from being so reach driven to being relevance driven is key. The answer isn’t ‘let’s do it cheaper,’ or ‘let’s give our business away for free for a year’. The answer is ‘let’s be smarter’. Let’s use what’s available to us. The science is in and it’s there. Let’s use this to power our client’s brands.”

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