In advertising, why is every year more volatile than the one before? The simple answer is that in industries as diverse as radio and real estate, detergents and telecommunications, the forces that reshape their operating environments also impact the advertising agencies that they employ. The irony is that while advertising is under pressure to be more marketing oriented, marketing companies are under the gun to become more creative.

Treading on each other's territory generates friction: ad agencies set up marketing units and flaunt strategic planners, while marketing firms have ‘MarCom’ people on their roster working directly with a freelance designers or media houses. One thing is certain. There is a whole lot of momentum going on.

THE CREATIVE LANDSCAPE  As we hurtle into the next century, advertising people and marketers are fully aware of how much power they wield. The challenges they face will come not from client briefs, but the need to integrate more services to remain in business. To some it feels like crunch time. To others it has never been a better time to do business because clients are more prepared to experiment with (translated: allocate more money to) creative exercises outside the Press-Radio-TV trinity. If indeed we are in a recession, observes Mike Masilamani of Masters Advertising, it is also true that we have been required to raise the bar of creative –a challenge he welcomes. He believes we already have begun to infuse more creativity, citing the House of Fashion campaign by Q&E Advertising as an exercise in taking a me-too product category and giving it identity. There was also the Eveready campaign from Phoenix O&M that showed how an international brand could be localized without loss of excitement, he observes.

Then there is technology to consider. Advertising agencies stand on the cusp of the technology era that will change the way they conduct their business whether they take advantage of it or not. The century closes with some stark realities. Every agency is wired --at least every desktop is networked-- and both Creatives and account executives have access to the Net. Art directors are digitally savvy, using a mouse as deftly as they did the airbrush just five years ago. The use of ‘typesetting houses’ is virtually obsolete, which means that paste-ups can be done in real time. Indeed the word ‘paste-up’ itself will soon be obsolete, as visuals and art-works are becoming 100% digital. "All our Sri Lankan ads are done entirely digitally, and shipped (the foreign markets) on zip drives", says Creative Director Russell Miranda of McCann-Erickson. It won’t be long, he says, before that process too will be short-circuited no sooner ISDN costs become attractive. Photography (and those tedious photo-shoots) has adapted to the new time frames of digitization. Commercials can be shot in one country, edited in another and aired in a third within less time than it used to take to do a model search a few years back.

For many years, ad agencies have felt the contradictory pressures of shrinking budgets and new product launches, shifting accounts and multinational alliances, research-based media planning, and ‘killer’ media buys of the tactical kind. 1999 was a landmark year. With AOR (Agency of Record) status getting more play in business circles, it has introduced the much-needed ground rules for partnership, and long term relationships. Lintas acquired 53% of the Unilever account (JWT holds 36% and McCanns 11% according to JWT Media Director, Deepthi Senanayake), McCann-Erickson lost Shell to JWT, but now has the entire Reckitt & Colman account. We saw one more big-ticket multi-national agency, Leo Burnett, being added to what seems like a crowded market. (OK, so Leo Burnett is making a ‘second coming’) with an eye on P&G, McDonald’s and Heinz. Creating the usual angst and anticipation, the Air Lanka account moved once again, followed by a huge re-branding exercise. And then we saw the advent of unapologetic political advertising in the sense that it was no longer a covert operation done on the pretext of a PR exercise using freelance creatives. Was it PA vs UNP or Bates vs O&M? A significant event this year was the re-grouping of the Association of Accredited Advertising Agencies (the 4A’s), that had disbanded about eight years ago. A total of 33 agencies have joined –more than those taking part in the SLIM awards.

Maturity in the ad industry brought with it a more pragmatic approach to how competition is regarded. The reality is that accounts will change hands, trained people will cross over, and even when the unthinkable account-split happens, agency heads have to accept co-existence and collaboration for the collective good of the client. Also, the tension that was felt around this time last year over some independent media units’ (e.g. Lintas’ Initiative Media, and the JWT and O&M entity called MindShare) ability to take away parts of an account is not proving to be a sticky issue. Some are realizing that the real threat to an agency’s business is not from one’s competitors, but from the inability to introduce and integrate new communication tools into the mix. Collaboration rather than conflict underwrites the goals of the 4A’s whose brand new constitution enables teaming up to do the positive things. Says it’s new president, Nimal Gunawardena, "we asked the agencies what they wanted, and came up with four priority areas (a) Professional Standards & Practices (b) Training & Education (c) Media Issues & Relations and (d) Fellowship. These are being addressed by four committees".

At this year’s SLIM Awards we see the rather belated recognition given to Web Design as a marketing and design skill. In 1999, the verdict about E-commerce was that clients were not ready for it. They did not see value in paying for what seemed no more than an extravagant electronic brochure. The result was for non-ad agencies to offer it to clients even at the grass-roots level. A Company called WebMasters International, designs sites for the often overlooked small business. Beginning as a design outfit, they quickly identified the knowledge gap and are now providing training in addition to E-commerce. The message is that it’s never too early, and no company is too small to add more venues to the marketing mix. Today it’s not only the private sector that is exploring all E-commerce options. Fully aware that in the accelerating pace of communication and commerce, anyone from the Foreign Ministry to the Fisheries Corporation (incidentally both have Web sites) and everyone in-between must find ways of resonating with their ‘customers’, whether they are visitors, prospects or loyal consumers. Just this year, Q&E Advertising launched a design and engineering unit called Affno to step into this vacuum. The concept is to bring knowledge of E-commerce to organizations that have never considered brand building outside the mainstream media mix. In a world where everyone and his brother-in-law offers Web design, it is refreshing that Affno is not hung up on design, but function. More important, E-commerce is not being treated like an add-on to an agency’s services. It is a separate set of marketing skills that the client can have access to, outside of his advertising budget.