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Published in
Jan 2000

SO, IMAGE ISN'T EVERYTHING?

The Marketing Vs Advertising debate will hit the ad industry with a tsunami force this century. The rush to re-engineer advertising seems like trying to retrofit tyres on a speeding highway.

 


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A story is told of two executives on a high-speed train to a mountain resort. One is the president of a company, and the other is the CEO of his advertising agency. The client, complaining that his company has spent far too much money on advertising, announces that he is thinking of stopping the present campaign to watch what happens to his sales figures.

At which the ad man asks to be excused and makes his way to the front of the train. "Where are you going?" asks the client, knowing his fellow passenger is miffed. "I’m going to speak to the engine driver", replies the ad man. "I want to see if we can make it to the next station if he detaches this carriage from the rest of the train".

The experience is universal. Many marketers, trained to be suspicious of advertising, tend to see it as an expense, not an investment. After all, advertising is only one part of an area of marketing activity that sustains (and catalyses) sales, and no one ---let alone the ad agency—knows how to measure accountability. There is that niggling feeling that nothing serious could happen to the work in progress by cutting back on an ad here and a media channel there. That is exactly what a recent survey of 1,800 presidents, chief executive officers and chief financial officers in the United States revealed. The study by the American Advertising Federation (AAF) finds only 43 percent of Corporate executives believe that the importance of advertising will grow. Image marketing, they believe, will take a back seat, while more money will be thrown at product development, strategic planning and public relations.

More specifically, only 54 percent of executives with ad budgets of $10 million or more said advertising will be more vital in the future. Just to put things into perspective Nestle, in 1997, spent 460 million dollars on advertising. IBM in 1998, pumped over $28 million on Internet advertising alone. Nestle had increased its ad spend of 13% over 1997, and IBM's online effort was upped by 58.6%. But this must not be mistaken for a trend. Other big brands such as McDonald's, Unilever and Levi's show cutbacks in overall ad spending, representative of the 46% of companies not convinced about the role of advertising. This has set many ad agencies scrambling, not just to evangelize the power of advertising, but to refurbish the services that they offer outside of advertising.

DESPARATE TIMES...

Patrick Mc Grath and group of concerned Madison Avenue types launched what was known as the "Umberto initiative". It was a desperate attempt to address an universal problem that can be summed up as the following:

* Ad Agencies are not high enough on the feeding chain
* Clients view Agencies as vendors not partners
* Ad Agencies have resorted to being executors, not strategists
* Ad agencies are out of touch with modern technology

* Ad Agencies are considered dinosaurs

How did this come about? How can the people who gave life to brands like Marlboro, Maytag, Mr. Whipple, Macintosh and MTV be considered expendable, out of touch or irrelevant? They identified many ‘perpetrators’ such as short term thinking clients, consultants, "big, bad CEO’s driven by Wall Street and interested in short term profits", and brand managers (and ad managers) obedient to those CEOs. Last but not least, they found that some Ad agencies ("who sometimes perform strange cannibalistic rites at the altar of new business") are also to blame. Keep in mind this was from a group of Ad people performing a self-diagnostic test on their profession. Certainly, this is not a ‘Madison Avenue’ problem, but a global malady.

Faced with this scenario the ad men who met over Pastrami (Umberto’s turns out to be an Italian restaurant in New York) came up with a plan on how to market themselves, to inspire confidence among their ranks, and to ‘tell the truth about our business". One of the tools they have chosen is to place on record –on video- testimonials from eminent marketing people from across many industries. The series would then be published in a magazine, and possibly be turned into a book. But how will this prop up the confidence index of marketers?

As Shelly Lazarus, Incoming Chairman of 4A’s put it, because of the speed of change driving the ad industry, it’s like having to change tires on the Autobahn at 100 miles an hour. For a long time advertising has chosen to be reactive rather than proactive: the side that executes (rather than dreams up) the client’s marketing plan; the division that creates the solutions not the department that identifies the problem. A change of direction has been long coming. "In a brand-building world", says Lazarus, "we don't follow so much as lead…We produce the stimulus that drives behavior. That is not our client's business. That is not what the media does, that's not what consultants do. That is what we do." The Marketing Vs Advertising debate that’s still not more than a tropical storm in the Madison Avenue corridor, will hit the ad industry with a tsunami force this century. The marketing people want to be keepers of the flame. Coca-Cola’s former marketing czar Sergio Zyman, never a cheerleader for the traditional ad agency (see Dateline America Sept ‘99), has argued that ad agencies have diluted their core business by attempting to be ‘owners of the strategy’. "The agencies are never going to have as much insight or information about a company as its managers. The fact is that the agencies can never make smart, fully informed decisions because they are never going to be fully informed." This kind of thinking means only one thing: trouble.

copyright: angelo fernando