CAA Embraces Authenticity to Help Align Clients With Brands

Getting the message out in this rapidly changing world requires an intimate understanding of today’s consumer and a whole new set of skills.

Steve Hasker, the newly named chief executive officer of Creative Artists Agency Global, said that since joining the talent and sports agency in January, he has been able to put into practice many of the lessons he learned from his previous role as chief operating officer of Nielsen.

“Consumer behavior around what they buy has fundamentally changed over the last several years,” he said. “And it’s not going to reverse — in fact, it will accelerate.”

This dramatic shift is felt most sharply by larger companies whose reach has been eroded by social media and e-commerce.

Hasker said that in 2013, the average American spent about 64 hours a week consuming media. This includes everything from listening to the radio, playing video games, reading news on their phones and interacting on social media.

This year, that number has risen to almost 80 hours a week, most of it coming from mobile. “And the most important driver is increased consumption of video,” he said. “It turns out consumers like video a lot more than they like to read, and they like professionally produced video.”

That phenomenon has impacted traditional ad-supported television the most, he said. For the last 50 years, companies turned to television to launch their brands and reach potential consumers. But today, this medium is “under enormous pressure” as every age group — with the exception of those 55 and older — have cut down on their viewing of traditional television.

In 2017, TV viewership was down by 7 percent, while social media usage was up 7 percent, video up 14 percent and mobile up 22 percent, he said.

Hasker said that from 1945 to 1996, basically there were very few changes in the ad mix — “It was glacial.” But when the Internet took hold around 1996, everything changed. “The money follows the eyeballs and the eyeballs have moved to social media and iPhones and away from ad-supported TV,” he said.

And there are some relatively new, very strong competitors, namely Netflix.

Hasker said that consumers globally watch about 1 billion hours of content a week on Netflix. “It would take 12 years for one of us to sit on the sofa and watch all of that content,” he said.

Netflix and others like it are also investing heavily in their own proprietary content which is prompting a seismic shift in the broader entertainment landscape, Hasker continued.

In the past, an entertainment company would commission a particular show based on the economics it was expected to generate. “That has changed.”

Netflix is investing $13 billion in buying programming and taking it to its 125 million subscribers around the world. “In order of magnitude, that’s larger than any media company has ever invested in programming,” he said.

Add to that Apple, which is investing in video to help it sell iPhones, as well as Facebook, Snapchat, Instagram and Google, all of whom are now focused on offering quality programming to their users. “Where they may have been focused on user-generated or free content in the past,” Hasker said, “they’re now starting to come to us to ask who are the best actors, producers and shows they should get to create programming to help drive users and time spent on their services.”

And the company that will most likely cause the most upheaval in the advertising industry, he said, is Amazon. “It’s the 800-pound gorilla that is just waking up,” he said, adding that the company spends $2.5 billion in advertising revenue every quarter and no one is talking about it. This is the one to watch.”

Driving this change is the rise of the Millennials. Globally, Hasker said, they’re the largest consumer group in terms of the number of human beings, representing 1.8 billion people globally, “so it’s not a niche.”

But many people think they don’t have any money and they tend to be disloyal, so marketing to them is not going to be effective. But while they may not be loyal, they’re not poor, Hasker said. “They’re about to inherit $7 trillion over the next four years,” he said, which represents a big chunk of the global economy — around $220-$250 trillion. “This is not a consumer group you can brush aside.”

The most important thing to know about Millennials, he said, is their “bias for authenticity. This is a group of people who would prefer to see themselves kick a goal than David Beckham. They like consuming their own content. And they prefer the recommendations of their friends to branded messaging,” he said. “So that makes them extremely tricky.”

He gave an example of a prominent Millennial actress represented by CAA who was approached with a $10 million deal from a pharmaceutical company. She turned it down, even after the company doubled its offer.

When asked why she walked away from such a lucrative partnership, the actress said there were no women on its board and she didn’t support the philanthropic efforts of the company or its chief executive.

“This is representative of something: when Millennials go looking for brands, they want to understand who runs the brand, what the brand stands for, and most importantly, the essence around that brand and its associations,” Hasker said. “That’s a huge opportunity for those who have figured it out and a massive problem for everyone else.”

Five or 10 years ago if someone wanted to launch a new brand, they would associate with a large company with the financial wherewithal to pay for print and broadcast advertising. But today, that is taking a back seat to figuring out “the right set of influencers and social media strategy.” And as a result, brands can be launched “at a significantly lower cost of entry.”

The same logic holds true for retail. “In the old days, you needed real muscle to get shelf space at retail. Now, we have e-commerce,” he said. “We’ve gone from mass appeal, where a marketer can blast a message out, to a much narrower, more specific, audience-driven authentic sense of messaging.”

As an example, Hasker said in the beauty category in 2016, there were 1.5 billion beauty videos uploaded to YouTube each month and the growth in views of those videos rose 67 percent from 2015-2016. Indie brands such as Charlotte Tilbury, Anastasia and Gucci Westman have used social media to launch and grow their brands. “I think this is something that is here to stay,” he said. “If you’re an indie brand, you can get to your target consumer pretty effectively. And you might have to come up against Amazon or Alibaba, but basically it’s a great way to market and much more efficient.”

In a soon-to-be-released survey by NPD, Hasker said smaller brands grew four times faster in 2016 and 2017 and digitally native brands that go straight to the market are growing three times faster than department stores.

This trend is also translating into some big numbers. Hasker said that Kylie Jenner’s beauty empire is now worth $460 million in revenues and Fenty by Rihanna $400 million. “That’s a real business, it’s not a sideline. This is where the real money is, it’s not a cool hobby.”

As a result, CAA is embracing all of these market shifts in order to find the best fits for its clients.

Hasker said the company recently created CAA Intell, a new data analytics tool, to ensure its celebrity roster is partnered with the best brands.

The way it works is that CAA starts by asking its clients what interests they’re most passionate about and what they want the world to know about them. It then looks at a client’s social reach engagement, public perception of likability, audience demographics, and the likes and interests of that audience. CAA then puts that up against potential brands to find the ones that would be the best fit.

But what’s different with this formula, Hasker said, is CAA incorporates actual purchase data “because there’s a difference between what I might like and what I might buy and this reconciles that.”

Hasker said that while the mathematics of this formula is complex, its message is simple: “Think on a much smaller scale and never take for granted this link to authenticity.”

Related stories

Retail's 'Pricing Perception' Disconnect

The Newsette, Twitter Partner on Female Career Series

Luka Sabbat Being Sued for Not Fulfilling His Sunglasses Deal

Get more from WWD: Follow us on Twitter, Facebook, Newsletter