Editoial Heal thyselves

To hear advertising agency executives tell the story, the continuing stagnation in ad spending is one of those stratospheric, macro-economic things. Clients' hesitancy towards spending the way they once did in the mass media is part of a complicated web of...

To hear advertising agency executives tell the story, the continuing stagnation in ad spending is one of those stratospheric, macro-economic things. Clients’ hesitancy towards spending the way they once did in the mass media is part of a complicated web of change and, the story goes, something over which agency people have no control.

There is no doubt that dramatic and complex changes are taking place. But there is even more doubt agencies cannot do something about it.

Peter Swain, president of Media Buying Services, says agencies are at least partly to blame for the continuing slump in ad spending. Swain says they have done virtually nothing to promote the use of their product to their clients.

‘The advertising industry at large, and most especially in the advertising agency sector, should be severely censured for its apparent lack of interest in telling advertisers that advertising works,’ said Swain in a keynote speech to a sales conference organized recently by the Radio Marketing Bureau.

Swain notes that mass media expenditures dropped almost 4% in 1991, yet below-the-line advertising spending continued its steady gains over recent years, increasing by about 3.5% in 1991.

Swain concedes there are many reasons for the shrinkage in mass media advertising spending. There are fewer advertisers and less competition in the wake of mergers and business failures. Global advertisers are questioning the value of advertising in Canada, and a new dynamic between manufacturers and retailers is leading to delays and doubts about the role of advertising.

But the most profound change, according to Swain, is the dramatic increase in clients’ demands that advertising show some accountability.

‘I can’t tell you how many of our clients have personally told me that their job is on the line if the advertising campaign does not work,’ he says. ‘This is a dramatic change from 10 or 20 years ago when advertising was the badge worn by corporate executives at their clubs or on the golf course.’

Meanwhile, other marketing tools, such as direct response, have taken over, largely because they are accountable and they are known.

While Swain says he doubts direct response has the same long-term effectiveness as mass media advertising, unfortunately ‘no one is making a concerted effort to tell the advertiser’s directors or shareholders that an investment [in media advertising] would indeed pay off.’

Yes, times are tough. Many of the large, multinational agencies are still paying off huge debts accumulated during a decade of mergers and acquisitions. They find themselves caught in the squeeze between increasing demands for agility, reliability and accountability from advertisers, and the proliferation of media choice and sophistication, Swain says.

Still, that does not exonerate them from what Swain describes as the biggest indictment of all: ‘… the inability or lack of initiative of the great agency communicators to persuade advertisers that they should spend money. These are the people that profess to have a skill to persuade consumers to part with theirs.’

The agency community should heed Swain’s message and perhaps begin to take its fate into its own hands.