Arguing that global brands need more Canada in divisive times, the Institute of Canadian Agencies has created a new manifesto it believes has the potential to add billions in revenue and create thousands of new jobs within the Canadian agency sector.
More than just a manifesto, however, the ICA has created a multi-pronged plan to transform Canadian advertising built around four key pillars: Increasing global recognition; attracting more global business; attracting new talent both locally and globally; and using tax incentives to coax brands into creating more work here, reducing our overreliance on work adapted from other markets while simultaneously pumping more money into the Canadian agency sector.
The plan includes four key objectives:
- Increase year-over-year opportunities for Canadian agencies to pitch global business;
- Increase year-over-year net revenue to Canadian agencies from global new business;
- Crack the top three at Cannes (overtaking France, the United Kingdom and Brazil); and
- See Toronto supplant New York as the top-ranked city in the North American Effie Index.
The timeline for this undertaking? Six years.
“It is ambitious, but why the hell not?” says ICA president and CEO Scott Knox. “Why do we all get out of bed in the morning? To just do the same thing every day? Let’s be ambitious.” The ICA has also hired a leading lobbying firm to help make inroads with governments and regulators.
And while the objectives may be ambitious, they’re not unattainable, says Knox. Toronto topping the Effie Index, for example, means putting just 10 more agencies into the top 100. And breaking into the top three in Cannes, where Canada finished fifth last year with 48 Lions, means first overtaking France (which had 55 Lions in 2023) and then setting its sights on the UK and Brazil, which had 84 apiece last year. “It’s not a big leap,” says Knox. “We’ve only got to add 35-36 [Lions].”
The bigger challenge, he admits, will be for Canadian agencies to compete for more global assignments. “Let’s be honest, winning awards is great, and showcases what we’re capable of, but does it generate new business? That’s really the heart of what this is about.”
The manifesto came together around a proposal that was brought to the ICA by board member and Mass Minority founder Brett Channer to lobby for tax credits for advertising produced in Canada. “This was a 15-minute pitch to the ICA board, and it was a slam-dunk,” he says. “I’d really like to see our industry have more of a hand in defining and shaping our culture.”
At its core, it would see marketers utilize government programs similar to the Scientific Research and Experimental Development (SR&ED) tax credit, a business assistance program administered at both the federal and provincial level that encourages businesses to conduct research and development.
According to Channer, Bam Analytix, an offshoot of Mass Minority, has used the program multiple times in the past, and he calls SR&ED the “gold standard” for fostering industry growth.
According to a 2022 House of Commons report, it provides tax breaks worth about $3 billion a year for the Canadian technology industry, but those breaks return $188 billion in annual sales and contributes to nearly 800,000 jobs. (It’s important to note here that those are broad numbers, encompassing the impact across the wider economy).
According to Channer’s calculations, providing $500 million in tax credit incentives to marketers for made-in-Canada work could “easily” lead to an additional $3.75 billion to Canada’s estimated C$22 billion marketing industry.
But beyond the financial benefits, Channer says incentivizing more made-in-Canada content—an important distinction, since it goes beyond simple advertising to include everything from experiential activations, websites, etc.—will result in a broad array of content that reflects Canadian culture, values, and beliefs.
One reason the government might be willing to engage on a proposal of this nature, he says, is the sizeable discrepancy between U.S. and Canadian ad spend—US$360.4 billion versus US$17.7 billion in 2023, according to GroupM data. (This gap was a starting point for Campaign’s “Made in Canada” feature story just published today.) “We have a real gap to grow the business,” says Channer.
But Knox says the manifesto goes beyond incentivizing brands to do more made-in-Canada work, and encouraging them to consider letting a Canadian agency lead their creative, with inherent Canadian traits serving as an enticement. “It’s about bringing the brands here, because of how we think and what we do,” he says.
And it’s not inconceivable that companies like Apple or Coca-Cola could make Canada a key hub for their global or North American marketing, says Knox. He points to Unilever’s recent decision to make Toronto the headquarters for its AI Horizon3 Lab, which will accelerate the generation of AI concepts, designs and projects that can be scaled and shared across its global business.
One of the key considerations for brands should be that moving a knowledge-based function like marketing to Canada is a “relatively easy shift,” he says. “The easiest thing for a global brand to move is its ad business, because it’s less about infrastructure,” he says.
That, coupled with key Canadian advantages like cost-effectiveness, a diverse and welcoming society, and a strong talent base, can suddenly make our country very appealing, he argues.
But for that to happen, says Knox, Canada will need to shed its inferiority complex. “We need to stop resting on our laurels and just being happy with doing adapt in the Canadian marketplace. That’s not what we’re good at,” he says. “We should be leading the account [because] we’re capable of delivering at the top end of that.”
Beyond the possibility of tax credits, Knox says the ICA’s new lobbying firm has also proposed other methods centred around programs that could yield “lower-hanging fruit” and “quick wins on the journey to the bigger win.”
The ICA also plans to enlist government support to help market the Canadian agency sector internationally, embarking on what Knox calls “export journeys” to sell international clients on its capabilities.
Knox points to his native U.K. as an example of how the agency sector has traditionally worked hand-in-hand with government to further its objectives through programs such as Creative Britain and the UK Advertising Association’s Front Foot initiative, which sought to demonstrate the impact the industry has on the economy.
Ten years ago, the ACA and WFA found that at a time when an estimated $12.7 billion was spent on advertising in Canada, the GDP impact was $81 billion, and the GDP multiplier was 6.37.
But unlike in the UK, where a relationship between the government and marketing industry had already been established, those conversations with government in Canada are starting from scratch. At the moment, says Knox, the Canadian agency sector currently has “zero” connection to government.
Here, too, the ICA has laid crucial groundwork for establishing those relationships. Its new board chair, BHLA/Lifelong Crush co-founder and chief business officer Bev Hammond, has extensive experience within the political realm, including advisory roles with the former Minister for International Trade and the Minister for Small Business, Science & Tourism, as well as provincial MPPs and outsider advisor to Ontario Premier Mike Harris.
Beginning next month, the ICA also plans to begin surveying agencies on how many global and North American assignments they’ve had the opportunity to pitch on, and provide a breakdown on revenue from those assignments.
“That’s our line in the sand,” says Knox. “And we’ve just got to keep pushing that up.”
The ultimate objective is to present the Canadian agency sector as a viable option for global clients. Knox says he wants to get “right in the faces” of the pitch consultants leading U.S. pitches. “What we need to do is ensure that we brief and enlighten their thinking on why they should ensure Canadian agencies are on the lists they are putting forward for the U.S. clients,” he says.
The selling point will be Canadian agencies’ ability to create work that works, as evidenced by the country’s rise in the Effie rankings. It’s also about showcasing their distinctive approach to creative that might be beyond the capabilities of U.S. agencies.
But that’s going to mean poaching clients away from U.S. agencies, already operating in a fiercely competitive market.
Is the Canadian industry prepared for the type of fight such actions might entail? “It has no choice,” Knox contends. “I am aware that elbows up, get stuck in and let’s fight for this piece of business is maybe not naturally how Canadians do business, but there are those that do.
“I’m not saying that Canadian agencies need to be as arrogant as us Brits or those Americans, but if we know what we’re capable of, and what is at the heart of how we authentically think and behave, brands need it.
“If that’s the case, it’s not about fighting with U.S. agencies to say, ‘We can do this just because we feel like it,’ it’s about ‘We can do this, because we’ll bring something different to the table that we don’t think you’re as good at thinking of as we are.’”
