On Advertising & Getting What You Pay For

Blitz Magazine, November 2002

payfor

This issue is the 5-year anniversary issue of this magazine; here’s hoping that readers may look forward to more Blitz pages. Osama’s attacks and corporate corruption didn’t just rock the stock market—they knocked the wind out of magazine ad sales. You have, no doubt, noticed that every magazine you pick up is a lot thinner than in previous years. As for me, if all the people who gush about how much they love Blitz don’t start supporting it, I’m going to pitch my publisher’s hat into the Pacific.

The experts keep telling us that the Canadian economy is the envy of the G7, that we’re perfectly stable and thriving and bla bla. ‘Problem is, Canadian businesses don’t appear to believe that. The response of many has been to cut advertising budgets.

This is most unfortunate, because it is an inviolate rule of business that the uncertain, or down, times is when advertising is crucial. You can advertise when you have gobs of cash coming in—but you must advertise when it seems like you can’t afford to. Otherwise, you’ll sink.

Some recent examples: In an effort to maintain earnings, Bristol-Myers cut advertising by 14%; three of its five top-selling drugs are now losing their monopolies. Buy.com thought that cutting ad spending would save the company; sales immediately dropped by $20 million. Samsung decided to eliminate “unnecessary” costs. A spokesperson said: “The company is seeking ways to reduce travel, traffic, advertising and miscellaneous expenses.” To this, Sergio Zyman responds: “If you’re the kind of company that puts advertising in the same sentence as ‘miscellaneous expenses’, you deserve what you get.”

Zyman is the former chief marketing officer at Coca-Cola and the author of the newly-released The End of Advertising As We Know It. His point is that, in an effort to capture the attention of information-overloaded consumers, ad agencies have had to find increasingly inventive ways to reach audiences. Which is fine, except that the focus on brand awareness has shifted. Now, everybody seems to want to use every technical tool available—just because it’s there, to create hip portfolio pieces and win awards. When the focus should be on sales results, i.e. the actual goal. Zyman cites K-Mart as a perfect example: huge awareness, but it’s in bankruptcy. Remember the Taco Bell Chihauhua commercials? The ads won awards, the client’s sales tanked.

Over the last five years, I’ve had hundreds of calls from ad agencies and pr firms. The conversations rarely vary:

Caller: “We’ve done a terrific campaign for ABC Widgets and we think it would make a great article.”

Me:      “Well, the campaign isn’t newsworthy. The results are newsworthy.”

Caller: “Huh?”

Me:      “Once the campaign is well under way, or complete, the increase in sales figures would make it a story.”

Caller: “I don’t understand….”

Me:      “Your agency, and ABC Widgets, will track the campaign’s results, right?”

Caller:  “Uh…”

Me:      “So, in four months, or whenever, you should be able to tell me that, as a result of this campaign, the client’s sales went from ‘here’ to ‘here’. That they increased by ‘this much’. Then the campaign could be a cover story.”

Caller:  “But it’s a great campaign. Why isn’t that worth writing about?”

Me:      “Because it’s not a great campaign if you can’t show increased sales.”

Caller:  “Oh. OK. As soon as we have those results, I’ll call you back.”

No one has ever called back. And as it’s not likely that they passed on the chance for a cover story, I have to assume that I didn’t hear from them again because their campaigns didn’t generate results. They may have won awards, and the teen-agers producing them thought they were really cool and were able to persuade the client of same, but the work didn’t work.

It should be obvious to everyone that if anything a business does doesn’t contribute in some way to increased profits, it shouldn’t be done. To that end, marketing directors have to say to ad agencies: “This is the plan, this is what it has to achieve, I’m going to pay for your ideas on how to best achieve this. Once I, and the rest of my staff, agree that your ideas are likely to increase sales, I’m going to pay you to provide the required services.”

Marketing directors and company owners should not say: “This is the company whose products represent my life’s work. These are the products whose sales support the jobs of dozens of employees. I’m putting all of our prospects in your hands. I hope you can pull it off.”

payfor1At the same time, a marketing director or company president who expects a certain result, and who’s confident that what his agency recommends will work to increase sales, but who then balks at the cost of the work, is doomed. Ditto with company owners who think that flash-in-the-pan campaigns will produce results. This is especially true with print campaigns, where advertisers often cancel a campaign if one or two insertions didn’t generate immediate results. You want results, you have to commit for the long haul. You want more revenue, you have to open your wallet. You get what you pay for.

I thought everyone knew this. Zyman says that that is most definitely not the case. And that it’s time for everyone to think again. Because, he says, advertising is a science. And those who fail to master that science, and properly practice it, are going to go out of business—along with their clients.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s