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SO, IMAGE
ISN'T EVERYTHING? |
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| 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. "Im 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 agencyknows 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
CEOs 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 (Umbertos 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 4As put it, because of the speed of change driving the ad industry, its
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 clients 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 thats 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-Colas 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.
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