Three months on from officially taking on the top job at Zenith, Jason Tonelli has set out the proposition. It’s ‘ROI³’ – with investment, imagination and insight making up the three Is, updating the agency’s now 20-year old maxim as ‘the ROI agency’.

But what is Zenith actually going to do that other agencies aren’t? “Media,” said Tonelli. “Really well.”

A punchy statement of intent, given the rolling programme of reinvention and diversification across other holdco-owned rivals, but it seems to be landing. Tonelli said the back to the future approach is market and marketer-driven, with pitch consultants noting a market gap – and client demand – for a media agency focused squarely on media.

“That was an ‘aha moment’ for the leadership team,” per Tonelli. “We’ve just got to do media bloody well, because that’s what clients want.”

Modibodi is the next sizeable win Zenith is announcing under the new regime, following the Brisbane operation’s RAC Queensland win in March. It’s a worldwide remit for the period pants firm (which also makes other non-leakage wear), with global media to be handled out of Sydney by Zenith, meaning billings are comfortably eight figures.

Tonelli claimed there are another three account wins since the start of the year that he can’t talk about. It’s not clear if one of those includes Adobe, which he welcomed to the Publicis family last month. Word is the business, split between Publicis and Wavemaker globally, is being handled by Zenith locally. Tonelli won’t confirm it, stating only that it is a Publicis ‘power of one’ solution.

Insight in, consulting out

Either way it’s the group capability that enables Zenith to concentrate squarely on media, and Tonelli suggests brands have appetite for simplification amid increasing complexity. The so-called ‘power of one’ model – essentially a single P&L – means the agency can pull in specialist capability from across the Publicis Groupe rather than keep bolting-on services.

“Yes, we have data and analytics [capability within Zenith]. But if people want digital consultancy, I can call on Sapient, Balance Internet, Digitas, Razorfish – I’ve got four options. If I had to spend money to go and build a team like that rather than make a phone call, that is not good corporate citizenship," said Tonelli. "It’s also silly, because I could make better use of that money elsewhere – insight, investment, strategy, whatever. We’ve got a group play here ... It means I don’t have to reinvent the wheel.”

Where Zenith has increased investment since Tonelli took the helm is research and insight. It launched a 1,000-strong rolling consumer panel last November, which now feeds its four-strong in-house research team headed up by Kim Xavier.

He claims it’s one of the few in-house research units within Australia’s media agency landscape – and it underlines Tonelli’s back to the future shift. Until superseded by digital metrics over the last 10-15 years, media agencies used to hang their hat on consumer insights. That approach, alongside more contextual planning and buying, and a simplification of metrics towards the things that actually matter, may yet return to prominence amid platform and privacy shifts and the knock-on effects on digital tracking and targeting.

Shopping, streaming shifts

Tonelli said the consumer panel provides ongoing ability to track consumer sentiment, currently running negative. “Right now, the number one worry is food prices,” he said, which will likely fuel growth for the likes of Aldi but signals pain for FMCGs, as consumers look for cheaper alternatives.

Cost of living pressures could also affect publishers: The panel is throwing up data that suggests ad-funded streaming could become a significant Australian market as consumers look for ways to save money.

Research presented by Ampere Analysis at the Future of TV Advertising conference in Sydney earlier this month suggested that 8.5 per cent of Australian households would take up ad tiers across Disney+ and Netflix. In contrast, Tonelli said Zenith’s latest panel data finds that up to half of streaming households may be open to ads on their streaming services if they get a discount.

Per its consumer panel data:

• 37 per cent are happy to watch adverts for a cheaper monthly subscription cost
• 53 per cent are more likely to consider the service that offers a cheaper option
• 39 per cent would downgrade their current subscription to the cheaper option.

“We know from the data that [as many as] half of Australians will consider an ad-funded [streaming] package,” said Tonelli. But that doesn’t mean they will all convert, he acknowledged.

“Will it be 50 per cent across the market or will they try an ad-funded model on one of the five streaming packages they have currently? That’s what we are working through. But at the moment, according to our data, [as many as] half of Australians are willing to test ad funded models, which we think will drive volume.”

Tonelli also thinks streamers launching with lower ad loads in a bid to seed ad-funded business models and attract higher levels of attention may be onto something. The firm is hedging its attention bets by working with both Amplified Intelligence and Playground XYZ.

“Adloads plus attention will be a hot topic for the next six to 12 months,” per Tonelli and could get hotter, depending on what happens with privacy reforms, should the Attorney General hold firm on mooted rule changes that will crimp the ability to track and target.

Back to brand

Another marketer-agency hot topic is brand versus demand or performance marketing. Tonelli sees a swing back to brand investment underway as marketers realise it can also drive performance, i.e. short-term sales.

“The brand-performance dichotomy is one of the hot conversations we’re having with marketers. People are looking for efficiency on lead generation, but at the same time, because we've been doing that a while, those leads are drying up a bit, so there is an increasing role for brand.”

He pointed to Cashrewards as an example of a client increasing brand investment to refill the performance bucket.

“I spoke about this at the Programmatic Summit last month with Nicole [Bardsley, Cashrewards CMO]. We’ve worked together and actually reduced performance spend while increasing brand spend – and it’s generating better outcomes from a performance perspective,” said Tonelli.

“Cashrewards has an in-house performance team, so we’ve been able to quantify business outcomes from the brand investment to leads, sales and acquisition,” he added. “That’s one example, but it’s a hot topic. You have to be able to measure that brand investment [in terms of its revenue contribution], but we are starting to see that swing into brand [investment over performance].”

Is that brand swing likely to continue into the second half?

“I think so. There is cautious optimism,” said Tonelli. “People are doing some modelling and some scenario planning … but we haven’t yet seen the contraction.”