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Nike announces it's slashing
$100 million from its marketing budget and plans to re-evaluate all its ad
campaigns over the next six months. Ad agency Wells BDDP, which came up with
the legendary "I Can't Believe I Ate the Whole Thing" campaign for Alka-Seltzer
and convinced Braniff Airways to paint its planes a fluorescent fuchsia, goes
out of business after losing $100 million accounts at Bristol-Myers and Procter
& Gamble. Levi's puts its account up for review after a year of declining
sales, even though its current award-winning ad campaign is simply some of the
best television on television. And Budweiser announces that real people are
going to start appearing in its ads again, though thankfully, the lizards and
frogs will not disappear entirely.
In other
words, it's been a typical couple of weeks in the advertising industry of the
1990s.
Actually, it's tempting to say that the state of perpetual
turmoil that characterizes advertising today has characterized the industry
since the modern era of advertising began sometime in the early 1920s. After
all, the underlying theme of just about everything honest written about the ad
game is fear--fear that your creative powers are going to dry up all of a
sudden, fear that you'll be stuck doing hand-cream ads the rest of your life,
and fear that the client will pull the account. In Frederic Wakeman's 1946
novel, The Hucksters , the hero, played by Clark Gable in the film
version, is a tough-guy creative whiz who gives up on advertising as soon as he
realizes that he's genuinely afraid of losing the big soap account. And in the
1970s, legendary '60s adman Jerry Della Femina wrote simply, "Most account guys
live with fear in their hearts." So it may be a mistake to think that
advertising in the 1990s is more chaotic and stressful than it's ever been.
On the
other hand, it may not be a mistake. For while the peculiar way advertising
agencies do business--any client is allowed to fire an agency with just 90
days' notice--has not changed in the last 50 years, the willingness of clients
to take their business elsewhere has. Even in the late 1960s, the average
business stuck with its ad agency for nine years. Today, the length of tenure
has shrunk dramatically, and even long-term clients feel free to put their
accounts into review, which essentially requires their current ad agency to
compete against a host of newcomers. It's like an actor being forced to
audition over and over again in order to keep a part.
In just the last two years, Kodak, Miller Lite,
United Airlines, McDonald's, Apple Computer, Bristol-Myers, P&G, Hertz, and
Toys "R" Us (as well as a host of others) have switched agencies. At the same
time, companies have started dividing up their advertising budgets. Instead of
a single agency offering soup-to-nuts services, one will do the media buying
and another will do the creative. The creative budget is often parceled out as
well. Wieden & Kennedy, for instance, handles Nike's shoe advertising and
has given us the genuinely terrific "I Can" campaign that Nike is now thinking
of killing. But Goodby, Silverstein & Partners handles Nike's apparel and
women's sports advertising, and has given us the F.I.T. campaign, with endless
shots of the skin of athletes such as Michael Johnson and Gabrielle Reece. Big
clients, in other words, are not necessarily as big as they once were.
In some ways, this probably
isn't a bad thing, though you'd have a hard time convincing most ad execs of
that. The reason advertising is governed by fear, after all, is that most
agencies rely on just a few clients to bring in the lion's share of their
revenues. If General Motors knew that one-tenth of its sales and one-eighth of
its profits came from two companies, you can bet GM would be constantly worried
about keeping those two companies happy. Insofar as fragmented budgets make
each individual client less important to an agency's overall financial health,
then, it's better for the agency, though it does mean that more energy has to
go into finding new business.
That
search is, needless to say, a difficult one at a time when there are literally
thousands of ad agencies in the United States alone and, more importantly, when
the creative differences between agencies have narrowed considerably. Perhaps
the most curious thing about advertising today, in fact, is that agencies that
spend all their time helping companies build strong brand names and distinct
corporate identities have a very difficult time building brand names for
themselves.
This wasn't always the case. To take only the most famous
example, when Doyle Dane Bernbach came up with its brilliant ads for Volkswagen
in the early 1960s, no other agency would have made those ads. An Ogilvy &
Mather ad looked one way (usually a very boring and uptight way), and a DDB or
a Mary Wells ad looked another. And this was arguably true even through the
1980s. TBWA Chiat/Day and Wieden & Kennedy certainly exaggerated their
radicalism, as advertising people are wont to do, but the 1984 Apple ad
and the original "Just Do It" ads for Nike did look qualitatively different
from what had come before.
Today it's
far harder to tell agencies apart. Look at the "I Can" campaign, the Reebok ads
for Kobe Bryant, and the Surrealistic Levi's ads. The same people could have
made them. More troubling, from the perspective of the advertisers themselves:
Watch a sneaker ad with the sound off. It will be next to impossible to discern
which company's shoes are being pushed. Advertising, in that sense, is feeling
the impact of commoditization just as other industries are. But where companies
in other industries can resist commoditization through technological
breakthroughs, better assembly lines, and--ironically--powerful branding, ad
agencies seem at a bit of a loss.
What we'd all like to believe, of course, is
that an advertising agency is ideally placed to resist commoditization, because
its main asset is the imagination of its staff, something that cannot be
duplicated. As one hopeful exec told Advertising Age recently,
"Creativity is the anti-commodity." But while creativity may exist, it doesn't
necessarily exist over and over again. And at a time when ad people all seem to
be drawing from the same palette of colors and styles, creativity and
distinctiveness are, oddly enough, not synonymous.
In a sense, the advertising
industry is reluctantly moving toward a business model much closer to the
so-called free-agent economy than to the traditional idea of a corporation. As
advertising budgets become more fragmented, it's easy to imagine a situation in
which ad agencies serve primarily to orchestrate production teams, bringing in
art directors and copywriters for specific ad campaigns rather than keeping a
whole staff on hand. When agencies lose major accounts, they often fire nearly
everyone involved with the account. How much longer can it be before agencies
decide that operating on a free-lance basis is simply more efficient?
What keeps the older model
intact, in part, is the importance of relationships to the business.
Advertising is still a world where glad-handing and drinking with clients is
important to keeping their accounts. But the studio system in Hollywood
disappeared while studio execs remained important as deal makers, and the same
could happen in advertising. As clients grow increasingly less committed to
their ad agencies, the economics of the business will have to change. In his
immensely tiresome memoir, Confessions of an Advertising Man , David
Ogilvy wrote, "If you can make yourself indispensable to a client, you will
never be fired." No doubt. But for the ad agencies, indispensability turned out
to be a hard sell.
