In search of indispensability

Maybe cynicism grows along with every birthday cheesecake under the belt, but lately I've been even more skeptical than usual of forecasts, studies, reports - basically anything making a sweeping statement on why, when and how people react or what the future will reveal.

Maybe cynicism grows along with every birthday cheesecake under the belt, but lately I’ve been even more skeptical than usual of forecasts, studies, reports - basically anything making a sweeping statement on why, when and how people react or what the future will reveal.

Given the daily dirt on misbehaving companies and the stock market rollercoaster ramifications, many are dubious of rosy economic forecasts. Hopefully we’re dead wrong, however, some of the industry pundits contacted for ‘Ad spend outlook: ‘robust but not dramatic” (p. 1) are among the agnostics, dubious that those in control of the pursestrings are uniformly convinced that now is the time to pour on the marketing dough to stimulate product lust.

One recent study that intrigued was the Leo Burnett Worldwide Cannes presentation that demonstrated award-winning campaigns were also very effective at motivating consumers. ‘Does Award-winning Advertising Sell?’, a sequel to a previous study, found four out of five of the world’s award-winningest ads over the past three years ‘achieved positive marketplace results.’ This year’s finding of 82% effective compares to 78% in 1987, and 86% in 1994 and 1996.

Another stat that struck us as significant was the Nielsen Media Research finding that direct response grew 18% in the U.S. last year, due to an increase in infomercials. Curious, as it’s typically pretty much the opposite end of the advertising spectrum. Here in Canada, Toronto Star TV saw an increase of 55% last year in Fortune 500 companies getting into infomercials, and based on personal (painful) observations, I’ve noticed more infomercial-influenced ads creeping into regular ad slots, sometimes for name brands.

What was the last ad that made you buy?

With over 72% of PVR users skipping ads (another study, but scarily credible), perhaps the point is moot, however, the last ad that made me run out and buy something was the spot for Nestlé’s Rolo ice cream. While not award-calibre creative, it did let me know that the brand we previously chose at the million-flavour ice cream parlours was now available in my grocer’s freezer. Despite one grocery clerk who swore it didn’t exist, knowing it was somewhere out there we persisted, and have proudly motored through our first carton.

The spot that made my mom run to the ice cream section of her local food emporium was very entertaining. That would be the ad for the new Nestlé Sundae ice cream featuring the nuns with dirty wimples. So far, her Nestlé Sundae has been restocked three times (had to try different flavors).

Since two new ice cream products scored equally with our family – one with a very entertaining ad, one with a straightforward but luscious scoop product shot, it demonstrates the problem with determining motivation. The Rolo ad, while less of a clutter-breakthrough creatively, was effective because we had previously tasted the product and already knew it was criminally addictive. The nuns with spoons did grab attention, and thereby captured the initial Sundae sale, but the product’s fudge sauce/nutty goodness prompted the repeat sales.

Expanding my very informal research into ‘what marketing initiative last made you go and buy something?’ also turned up one that fell into the score-for-frequency category. The success of the Heart and Stroke Foundation’s frequent mailings to a past lottery ticket customer was attributed to wearing down the resistance, finally hitting the (non-winning) ticket buyer at the right time.

Payment by results

Assessing agency performance by looking at the bottom line is tricky – there are just too many outside factors. Beyond the formulas and logistics of this payment model (see ‘The lowdown on PBR,’ p. 1), what’s troubling is the bottom-line motivation. Does payment by results make the agency more of a partner, or more of a vendor?

If marketers perceive the agency in more of an in-this-together-for-the-long-haul light, then it has positive implications for advertising in general, as it sets the stage for more professional development opps. A spirit of greater partnership is needed to counteract the fire-the-handlers type relationships, where agencies financially are encouraged to divest themselves of infrastructure. Whenever an industry is boxed into a corner where resources and expertise are at risk, it loses power, demand and the scope of its activities dwindle.

Back in the day when commercial production companies owned cameras, trucks, studios and had a stable of cinematographers, they were necessarily indispensible. When the economy tanked last time and supporting the infrastructure became a drain, one by one the empires crumbled until only a few studio-scale biz models remained, and the indispensible part was lost. The role of the spot shops was diminished as they lost ability to negotiate based on talent and resources. Long-term fallout has been fewer resources available to invest in developing new directorial talent.

Now, with competition for consumers’ attention heading into even tougher territory, putting other levels of ad talent at similar risk is the last thing anyone needs.

In discussing the agency model and what needs changing both in the POV story this issue (p. 9) and in his Op/Ed column p. 27, new Leo B MD Michael Wood calls for a greater spirit of collaboration and contact between agencies and the upper levels of management. It is something that top agency brass here have been feeling for some time. Last year (prior to the whole Grip business), when Palmer Jarvis topper Frank Palmer was asked what the biggest challenge ahead was, he replied: ‘Agencies need to be indispensible – a preferred partner – at a higher level than most agencies are used to.’

Unless that happens – up against concerted commercial avoidance from harder-to-reach-and-impress consumers on one end, and deals the likes of OMD USA’s Disney lock on the other – marketers will be heading into uncharted territory without Sherpa guides. Maybe, given the long-term costs associated, nibbling away at agency margins and betting the farm on instant sales hikes isn’t such a clever financial tactic. It also gnaws at the infrastructure and talent base needed to build and strengthen the kind of ‘brand bonds’ cited in the Leo B study, behind the success of icon brands such as Volkswagen, Bud, Guinness and Nike.

The business climate of 2002 is no place for this kind of approach. Creativity should be focused on the advertising, not the accounting.

cheers,mm Mary Maddever, Editor