The Modern Marketplace & "The New Advertising"
In this chapter, not all stories have an easy answer or happy ending. It covers complex business situations
"1984"
This was the name of the commercial that introduced Apple's Macintosh computer. Illusion to a classic novel called 1984. Other companies have dominated the computer market, so Apple attempts to make a splash even though they were a little late to get into the market.
Big Brother represented in the commercial was IBM [2 bubble gums!].
It was a new way of thinking about advertising, TOTAL MARKETING!
Marketing Public Relations (Computer Magazine Reviews, Major Media Coverage)
Sales Promotion (In-store materials)
New Media Products (MacWorld, MacWeek)
and more...
How Advertising Changes:
- Financially-Driven Agency Mergers & The Rise of "Mega-Agencies"
- Agency/Client Relationships
- Effectiveness Questions
- Lower Budgets & More Competition
- The Rise of Regional Agencies
Financially-Driven Mergers: Martin Sorrell
From eighteen big agencies to eight
Saatchi & Saatchi's Big Idea
- Price/Earnings Ratio - London vs. New York
+ Lower for US than it was in England...what if I go and BUY an agency in the US and then bring it to UK and absorb it into my empire in england...Buy Cheap, Sell High
Marin Sorrell buys WPP (Wire Plastic Products) WPP owned stock in the UK, so he acquired that stock?
WPP = JWT + O&M + Y&R and more!
Agency/Client Relationships:
+ A shift of Power
- One, an ad agency AEs usually made more money than Ad Managers
- Now, Ad Managers usually make more money than ad agency AEs
+ Client Mergers
+ A Maturing Industry
< INCREASE in Cost Pressures, but DECREASE in Compensation Pressures >
+ Example "Unbundling"
- Once, Agencies controlled both media and creative within "full-service agencies
- Now, Clients may assign creative and media separately - forcing agencies to "unbundle"
- With each review, clients squeeze fees for both
+ Result #1: Media Agencies
- Mega-agencies spun off their media departments into free-standing "media agencies"
+ Result 2: Client Purchasing Involvement
- Now client purchasing departments are becoming involved in this significant business decision. Agencies have even less control.
Effectiveness Questions:
- Sales Promotion a Growing Cost
- Particularly for consumer products
- Here's How it adds up:
20% Advertising
22% Consumer Promo
58% Trade Promo
(Source Nielson 7/98)
Incentives or Persuasion?
It's better when you do it together...Integrate
Advertising's 3 Big Problems
Media Efficiency (CPM)
- Costs more to reach same number of people
Category Maturity
- Experience makes consumers harder to persuade
Consumer Message Overload
- Unlimited messages. Limited Attention.
Lower Budgets. More Competition
"A smaller piece of a bigger pie"
Survival of the Fittest means.. tougher competitors!!
More Marketing Choices:
- Sales Promotion
- MPR (Marketing Public Relations)
- Event Marketing / Sponsorship
- and now The Internet!
Rise of Regional Agencies:
"The Bernbach Factor"
Downloading of Technology
- Graphics and Video Production
- "Intellectual Software"
New Major Clients
- LA - Japanese Cars [i.e. Nissan]
- SF- Silicon Vally [Apple]
+ Nike, Wal-Mart, etc
Example: Chiat/Day
- Creativity + California
Lee Clow (Surfer, Exec Creative Director
Steve Hayden helped create "1984" (then went to work for IBM)
Terrific Work
Account Planning
- British consumer insight approach [psycho graphics]
- Jay Chiat imports Jane Newman
- Chiat/Day becomes 1st U.S. agency with account planning
Chiat/Day was named "Agency of the Decade" by Ad Age in 1989.
Example: Crispin Porter + Bogusky
- A New Approach
+ Less bothered by controversy
- A Search for "Social Tension"
- "Post-modern" creative attitude
Example: IKEA
+ Problem: people keep furniture long after they're tired of it.
+ CP+B's award winning solution (crazy lamp commercial)
Example: MiniCooper
+ Problem - introduce a very small car with a very small budget
+ Answer: High-impact print and outdoor and more...
VW (Volkswagen)
- Crash commerical
Goodby Silverstein & Partners (SF)
- Superb Design (Silverstein)
- A Search for Story (Goodby)
"Got Milk?" Campaign for the California Milk Processor Board
Unique "deprivation" research ["what if you didn't have milk" research technique]
Halted decline in milk consumption
Excellent
HP
The Computer is Personal Again / Don't Boot, Play.
