How Tag Americas' CEO Uses People And Product To Build Profit

Forbes

2 days ago

The economic uncertainty of the last few months has been difficult on brands of all kinds, but consumer products—food, beverages and personal care items—have faced the challenges faster than other industries.
Consumer packaged goods (CPGs) have relatively short shelf lives, tend to be purchased by a large proportion of consumers, and face steep competition. The fast consumer cycle makes CPGs among the first products that need to raise their prices, the first to experience new tariffs (especially because some products must be imported), and the first to fight for sales among financially squeezed consumers. EY released a report this month looking at the state of consumer products and found that, above all else right now, CPGs need to build their brands through disruptive optimism—simplifying their portfolios and experimenting with different kinds of engagement with consumers and retailers in order to rebuild loyalty.
The future for CPG brands appears pretty grim to those who work with them. Nearly four out of five retailers told EY they believe that in the long run, only one mass-market brand will remain on their shelves. The rest of the shelf space will go to private label products, premium items and niche brands. About two-thirds of CPG companies also see this future, but the retailers are the ones who control what goes on the shelves. Most consumers still want to be brand loyal, but they're looking for greater benefits. Several attempts to keep customers loyal have been unsuccessful: 78% of consumers said they've noticed package sizes getting smaller and prices staying the same, and 42% believe that product 'improvements' is just code for cost-cutting measures. Currently, over half of consumers only buy branded products when they're on sale.
The product side of these companies can help fight the negative perception drift by digging into consumer interests and needs, and looking for ways to innovate in those areas. CMOs will play an important role by telling the brand's story in an authentic way. One of the best methods for doing that, EY suggests, is employing technology like AI to create sharper consumer targeting, bring more personalized messages to customers, and create loyalty programs that meet their needs and create new repeat buyers. Discovering what consumers want out of products and making sure that message is delivered can help keep products on shelves, even as people are becoming more careful with their money.
Tag Americas has been using technology to bring innovative marketing solutions to brands, and its new CEO Stephen Kiely has plans to continue moving forward through uniting people and new innovations. I talked to him about his first few months heading the agency. An excerpt from our conversation is later in this newsletter.
VINCENT FEURAY/Hans Lucas/AFP via Getty Images
Ever since companies began to use enterprise AI, advocates have continually said that the technology wasn't out to replace jobs, and that humans would always be a necessary part of the equation. But in practice, some companies have moved toward automating everything. Meta founder and CEO Mark Zuckerberg outlined a future like this for digital advertising in an interview earlier this month with the Stratechery podcast. Zuckerberg suggests that Meta will be able to use AI so that companies can come to them with just a link to their bank account and a list of the business outcomes they want to achieve. The AI system that Zuckerberg wants to see at Meta could produce the creative, target the correct users and produce measurable outcomes. 'I think it is a redefinition of the category of advertising,' Zuckerberg said on the podcast.
Forbes contributor Kiri Masters writes that Meta isn't the only player that's considering giving the keys of advertising systems to AI. Google has been moving in that direction with PMAX campaigns, which consolidate advertising across its platforms into a single algorithm-managed campaign type—though advertisers still need to provide some creative basics. Amazon is working toward making its advertising arm a standalone business, and while it has the internal data that could provide a robust all-AI advertising platform, analysts say the company's history indicates it is more likely to pursue a more transparent approach of people working with AI.
A Target store in Jersey City, New Jersey.
Target continues to face challenges brought on by a downturn of its brand image, which comes on top of declining consumer confidence during an unpredictable economic situation. In its earnings report last week, the retailer saw its sales drop 2.8% year-over-year, with total transactions down 2.4%, basket sizes dropping 1.4%, and traffic down 4.8%, according to Placer.ai. Part of the reason is that Target has been singled out for rolling back its DEI program at the beginning of the year, and a group of Black faith leaders called for a boycott of the retailer during the 40-day Lent period leading up to Easter.
In their earnings call, Target leaders didn't mention the boycott as a reason for the decline in store traffic and sales, and instead highlighted their strategy for brand-building, pricing and value going into the rest of the year. Last Sunday, the Rev. Dr. Jamal Bryant called for another one-day boycott of Target, writes Forbes senior contributor Pamela Danziger. Sunday was the five-year anniversary of George Floyd's murder in Minneapolis, which kicked off the recent racial reckoning movement—and at the time had moved Target CEO Brian Cornell to increase the company's support for the Black community.
Players can speak with AI Darth Vader in Fortnite.
AI is being used in many places, but not everywhere. One industry that has mostly stayed away: video games, writes Forbes senior contributor Paul Tassi. With the exception of the much-hyped introduction of AI Darth Vader in Fortnite—which came through a voice rights deal with late actor James Earl Jones' estate—many publishers have steered clear of using the technology. Game developers Take-Two, EA and CDPR have all said generative AI might infringe on copyright issues, but it also could bring about 'reputational harm.'
Tassi writes that the gamer community is very defensive of the actual people who make video games: artists, writers, developers, musicians and voice actors. If AI-generated options are added to games, they run the risk of being roasted on social media as 'slop.' As AI video, music and storytelling improve, these opinions could change. But for now, gamers aren't necessarily giving the AI that is being used reverential treatment. Tassi writes that social media is full of videos of gamers making AI Darth Vader do and say silly things.
Tag Americas CEO Stephen Kiely.
Last October, Stephen Kiely was named the new CEO of Tag Americas, the full-service digital production and sourcing firm owned by international advertising powerhouse dentsu. Kiely, a marketing veteran who has worked with dentsu companies since 2016, started his time at Tag Americas with renewed strategies and commitment to technology. I talked to him about his first few months and what he sees in the future. This conversation has been edited for length, clarity and continuity.
When you became CEO of Tag Americas, what did you see as the priorities and the challenges?
Kiely: There's three priorities for me: People first [and] foremost, our product, and then there's profit—the actual business behind what we do. Our people [includes] a great collection of folks across the Americas, Brazil, United States, Canada. There was some unifying that was required, and some culture that we needed to build amongst folks. Over the last five months, we've put an emphasis on re-engineering how we get together every single month. We've branded it a Tag Up, and it's not a one-way conversation. It's us having a conversation and bringing in all aspects of the business so we can learn from each other.
We've got a lot of regularly scheduled programming, including something called a Tag Spotlight, where we're bringing in stellar partners from inside and outside of our industry so we can learn as a collective. We have launched 'Meet the Humans of dentsu.' Dentsu acquired Tag two years ago, and our strength exists in how we leverage all the best parts of dentsu along with Tag. I would say we've built a lot of community and trust amongst one another, which I think is the basis for good work.
From a product standpoint, we are on fire in all the best ways. Over the last couple years, we've invested about $50 million in really innovative technology to help our clients get to content automation at scale without sacrificing craft. We've built a tool. It will launch in the summer and it is unlike anything the world has ever seen. It's fully built [starting with] AI up. We are winning new business left, right and center. My estimation is this year we'll grow 12% through the product that we're delivering on behalf of clients versus last year. And that's huge in this economy. We're publishing work that I think is getting noticed in the world in ways that maybe it hadn't before.
We deeply believe in the spirit of co-creation with our product and that no one partner can do it alone. It's about: How do you bring in partners from media? How do you bring in partners from creative? How do you underpin all of that with data to get to communication that offers utility? Modern communication should be two-way with the audience you're looking to reach. I look at a project for tentree, we built that and we detected [more than 200] wildfires [before they became problems in] the Canadian marketplace. That's something to be proud of. It's good commerce, good brand work and being a force for good.
From a profit standpoint, we are growing in a very challenging economy. We're helping our clients figure out ways to be more efficient.
We are in challenging economic times. What does that do for Tag Americas, and what is your plan to get through it?
Tag is uniquely positioned, particularly in challenging economic times, because we are the only production partner that offers a true end-to-end solution, both content production and the sourcing part. We can blend the physical and digital worlds, and oftentimes we can realize on the sourcing side savings for our clients that can then actually fund the content side. Clients are nervous about spending money. They don't know where business is heading, and the ability to offer value without sacrificing quality is very attractive, and that is Tag's sweet spot.
Where do you see Tag Americas in five years?
Great question. We should ask AI. (laughs)
I think the marketing industry needs companies like Tag on steroids. I think production needs to be the great neutralizing force in marketing so that media agendas don't go too far on one extreme, or creative agendas don't go too far off on [another] extreme. Production and being an intellectual blood bank for clients from a production standpoint keep that pendulum right in the middle. And that's got to be the goal of production.
Oftentimes, production partners have been thought of for the last mile, and it's kind of been like an Easy-Bake Oven. A brief goes in and, ding: Three weeks later, there's content and assets and they're trafficked out. That's kind of to me [something from] yesteryear, and where it's going in five years is to be the equalizing force so that no agenda runs wild and every dollar is in check.
And then I would say that in five years, we need to be guaranteeing outcomes for the clients that we're paid to represent. We need to deeply understand what is going to change their business, what their KPIs are, and then we need to be able to model using technology work that's going to win in the world.
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