Led down the garden path...  ( October '28,2002, BS)

Companies must demand that agencies credibly demonstrate what they’re getting for the advertising buck and ignore the sales spiel

Too many people — including most advertising execs and agency heads — don’t even know what advertising is. I’m perfectly serious. Think about it for a second. How do you define advertising? I know I’ve said it before, but the first thing that pops into most people’s mind is that advertising is commercials and that’s the problem.

Yes, sometimes television ads are important, but sometimes they’re a waste... Given another minute or so to think about it, some people might add that advertising also includes radio spots and print ads in newspapers or magazines. A few might throw in billboards and bus-shelter posters. That’s about it.

Those definitions form only a small portion of what advertising is all about. My definition is that advertising is everything. Yes, it’s those television ads that are the darlings of the ad industry. And yes, it’s those radio and print ads, too.

Plus, it’s the way your product is packaged, the spokespeople you use — or don’t use — to endorse it, the way you treat your employees and the way they, in turn, treat your customers, your annual reports, the events you sponsor, and even the way you handle unexpected business successes and failures. In short, everything you do communicates something about your brand to your customers and prospective customers.

It all influences the way people view your company and your products, and it all influences whether anyone will buy what you’re selling.

...Trying to reach every potential customer out there with a television ad would be insanely expensive — that’s assuming it was even possible. No matter how much television people watch, they can’t possibly see every commercial.

Advertisers and agencies put the whole industry on life support by refusing to let go their idiotic belief that television commercials are all there is to advertising. But what is advertising all about?
Simply put, the goal of advertising is to sell more stuff to more people more often for more money. Get used to that sentence because you’re going to see it a lot in this book.

Now, as much as I’d like to claim that idea as my own, it’s not really all that original. When companies first started advertising, the whole purpose was to help them sell more of their products or services. And back in the beginning, it did exactly that. Somewhere along the line, though, something went terribly wrong.

Instead of focusing on their clients’ consumers, ad agencies and advertising executives at companies fell in love with themselves. And instead of trying to help their clients increase sales, they hid behind their creativity, shrouding themselves in mystery and concentrating on coming up with award-winning ads that end up more as works of art than works of communication.

The cult of creativity, or “the emperor’s new ad agency”

This whole thing reminds me of a story I used to read to my kids when they were little: “The Emperor’s New Clothes.” You know the story, right? A couple of scam artists come to a country where they’ve heard that the emperor is obsessed with clothes.

They manage to get an audience with the emperor and they convince him that they’re the best tailors in the world and that they’ll make him the most beautiful set of clothes anyone has ever seen. They get the commission, demand a huge deposit, order tons of gold and silver cloth, and then proceed to do absolutely nothing.

When the king’s advisors come to see how the new outfit is coming along, the con men show them an empty loom and tell them that the fabric is visible only to people who are qualified to do their job. In other words, stupid people can’t see it. Naturally, no one wants to admit that they can’t see anything, so they rush back to the king raving about how great the fabric looks.

The same thing has been going on in the advertising industry for decades. Ad agencies and ad execs lure companies in with promises that they’ll come up with the best ad campaigns anyone’s even seen. They collect big fees, and whenever anyone questions what they do, these “creatives” act offended and basically say the same thing that the emperor’s con men did: “Advertising is an art and only artists and creative people get it. Stupid people won’t be able to understand what we do.”

And just like the emperor’s advisors, the clients don’t want to admit that they’re ignorant. So they they keep sending money and the ad agencies keep working on some mysterious thing behind closed doors.

Toward the end of the story, the king gives a big bonus to the fake tailors, puts on his nonexistent new suit, and heads a procession through town to show it off. In much the same way, ad execs eventually trot out their finished campaign and announce that it’s brilliant. As proof, they show off the Addies and Clios they won for creative genius.

In the final scene, a little kid shouts out the obvious, that the emperor is naked. Well, when it comes to advertising, I guess I’m that kid, shouting out that advertisers are basically being stripped bare by ad agencies whose ads aren’t doing what they’re supposed to do: sell more stuff to more people more often and for more money.

Just as the emperor should have been more than a little suspicious when he didn’t see any fabric, advertisers should be suspicious when they don’t see any return on their investment. No matter what anyone else says, the truth is that advertising is not an art. It may involve some artistry, but in the final analysis it’s science whose results are 100 per cent measurable.

...I’m not saying that creative people shouldn’t be rewarded. Of course, they should. But only when they come up with something creative that gets people to buy more stuff more often for more money. They should be scared to death to come out of their secret rooms until they’re ready to face the music just like everyone else in the company, just like the tailors who scammed the emperor.

Hey, David Ogilvy and Dan Weiden got it and so did Jay Chiat. Why doesn’t anybody else? Really and truly, though, the emperor wasn’t just a hapless victim. He brought his problems on himself. And the same goes for a lot of advertisers. Burger King, for example, has changed agencies so many times that consumers have completely lost track of what the company’s value proposition is in the first place.

Still, Burger King keeps looking for that silver bullet that will magically make people line up at their restaurants, but there’s no such thing. It’s about steady communication and establishing a value proposition that appeals to heavy users first and the rest of the consumers second. The agency frenzy is as much the fault of the untrained client as it is the fault of the opportunistic agency.

The myth that advertising doesn’t work to sell product

Okay, back to the emperor. After the most embarrassing moment of his life, the emperor probably ran back to the palace, put some pants on, and got back to work. But advertisers aren’t nearly as willing to accept that they made a mistake. They sit there and watch sales drop.

Rather than say, “We’ve been idiots not to have insisted on measurable results from our advertisements. Let’s change things,” they decide that the way to stem their losses is to slash their advertising budgets.

In fact, advertising is often one of the first expenses that companies cut when they’re having tough times... Big mistake. As Bruce Barton, who founded BBDO, said, “In good times people want to advertise; in bad times, they have to.”

But not everyone’s as smart as Bruce. Let me give you a few quick examples of companies that were going through tough financial times but made the mistake of not following his advice — and have hurt themselves even more as a result:

Samsung decided in 2001 to eliminate “unnecessary” costs. A spokesperson said, “The company is seeking ways to reduce travel, traffic, advertising, and miscellaneous expenses.” I’m sorry, but if you’re the kind of company that puts advertising in the same sentence as miscellaneous expenses, you deserve what you get.

WorldCom cut ad spending by more than a third, saying they wanted to get more for their money by promoting long-distance and local phone services in the same ads.

Worried that earnings might suffer, Bristol-Myers cut advertising by 14 per cent and raised R&D by 10 per cent. Three of the five top-selling drugs at the company are losing their monopolies.
Overall, in 2001, when recession was probably the most commonly heard word in business circles, ad spending dropped almost 16 per cent from the previous year. On the other hand, the handful of major advertisers who bucked the trend and spent more money on ads than the year before were able to increase sales.

AOL-Time Warner raised advertising spending by almost 12 per cent, while Ford was up 5.4 per cent. When Home Depot increased their ad budget, sales jumped 16 per cent and net income rose 10 per cent.

It always strikes me as funny that when agencies pitch a client they start by showing their reel. Wouldn’t it be better if they showed results? And whenever clients make presentations, they always refer to their ads: the Chihuahua, those people singing “I’d like to buy the world a Coke” on a hilltop, Mean Joe Green, the sock puppet. Oh boy...