ANALYSIS: Advertising - Should agencies take their own medicine? Few ad agencies put their sermon into practice by running house campaigns

To advertise or not to advertise when sales head for the ditch? It all depends on who is doing the talking. If it's an advertising agency speaking, nine times out of ten, the likely message would be: stay on course with the advertising. Sounds like a self-serving spiel from agencies? Hardly. There's plenty of documented evidence showing that the biggest names in business - Coca-Cola, IBM and Intel - got to where they are partly by keeping the marketing taps on even when economies headed south. What if the shoe was on the other foot? Shouldn't the preacher also put his gospel into practice? Shouldn't agencies run ads in regional business titles or television spots to reach potential clients? In a word: no, say agencies. Indeed, house advertising campaigns by agencies are few and far between in Asia, whether the economy is in rude health or slumping. Not that this is any different elsewhere in the world - save for maybe South Africa, where a business title pulls in regular campaigns from the agency fraternity. Among the small minority that have tooted their horns with advertising are Saatchi & Saatchi, M&C Saatchi Hong Kong, and, to a lesser degree, D'Arcy, though the latter did so to court a particular client. Under Saatchi's former regional chief Pete Watkins, it ran ads asking: "Can an agency change the world?" Watkins had a clear mission for doing so. Saatchi was then a new face in a region where its international rivals had been operating for about 20 years. Seven years on, Saatchi is again trumpeting its offer with full-colour pages in a regional business title. Instead of an image campaign, Saatchi is talking up its capabilities in China, positioning itself as one that understands Chinese consumers on the strength of a 20-city research it regularly conducts. Pitcher says the agency chose to highlight China because it presents the biggest marketing opportunity and Saatchi is the mainland's top-billing agency. Far more surprising is the route M&C has taken for a three-phase campaign to underline its development. It headed outdoors, a strategy helped by having a client which runs one of Hong Kong's biggest outdoor networks. But rivals have questioned the effectiveness of doing so. However, M&C's chief executive Ian Thubron says the campaigns ran in financial, commercial and premier residential sites to reach the business community. "We're advertising where they work and where they live," he says, adding that the campaigns was created to dispel perceptions of M&C as a "gweilo boutique", showing it as a full-fledged agency. For the first phase, the creative showed the M&C name among the many property and services-style advertising stuck on city blocks and store fronts around older, urban neighbourhoods. Says general manager Janice Chan: "We wanted to show that M&C has become part of the fabric of the local community and that we understand local consumers." This was followed by the mid-year Inspiration campaign, with agency staff talking about the lengths they will go to for clients, culminating in a series of executions positioning M&C as a challenger agency. In one, a man pokes his tongue out with the tagline: "Does your agency speak to your consumer or insult them?" Critical of most house efforts, which Thubron feels are done to win awards, he says there was a clear strategy and message behind M&C's efforts. That may be the case, but rival agencies still believe they have compelling reasons for not putting their sermon into practice. Top of the list is the high wastage factor advertising incurs. Agencies essentially fish for business in a very small pond. Ogilvy & Mather's regional chairman Miles Young says advertising to reach regional clients is "unbelievably wasteful" since client conflict issues limit the target audience agencies could approach for new business. O&M's founder, the late David Ogilvy, was a firm believer in house campaigns. In his book on advertising, he wrote of being puzzled why so few agencies took their own medicine. Perhaps it was because the partners could not agree on what to say, he surmised. Worse yet, he wrote of copy writers and art directors doing house campaigns to impress their peers. During his time with the agency, Ogilvy wrote a series of classic ads to tell potential clients about the agency's wide-ranging expertise. Pointing out that these were run in the early years, Young, however doubts advertising will offer O&M as much value today because of the awareness it now enjoys. Even those without this level of awareness see criticism, stemming from agencies' reluctance to advertise as a sign that they don't believe in advertising, as misguided. Grey Asia-Pacific president Eric Rosenkranz said he tried and was disappointed with the results of a campaign he ran a decade ago in Japan. The phone didn't ring after Grey ran a print campaign, positioning it as the agency which brought big Western brand names into Japan. Neither has the phone been ringing off the hook for Saatchi or M&C. Says Pitcher: "We haven't had a big multinational company call and hand us a piece of business. That was not really the intention. The intention was to provide an understanding of Saatchi." But Rosenkranz argues that agencies are being very intelligent when they don't advertise. "We're practicising what we preach. One of the critical things is to understand who your target audience is, the choose your media vehicle to effectively go after that target." Leo Burnett regional managing director Richard Pinder say agencies cannot be compared with their clients simply because they are communicating to other businesses and not to consumers. Which means a more appropriate bait than advertising is needed to reach the target audience, a group that goes beyond prospective client companies. The very nature of agency operations these days means agencies need to position themselves within the industry for recruitment purposes, to existing clients as well as financial analysts. "It's a very focused business-to-business communication and while there is a role to consider for advertising, it's far more cost efficient and targeted to do so with direct marketing," Pinder says. The larger international agencies say they spend significant sums on initiatives that go directly to the target audience, from direct mail shots and credential brochures. On top of this, PR activities, speaking engagements at international business events and client seminars rate higher when it comes to positioning agencies to the local business community. It's a route that appears to strike a chord with client companies. A handful of clients media spoke to say house efforts are unlikely to sway them. Nike Hong Kong's marketing director Rosanna Hon, who has an agency background, says: "Ads won't make me want to include an agency on the pitch list." If anything, house campaigns potentially carry a greater risk - clients say they'll be quicker to write off agencies if their campaigns are only slightly less brilliant. In assembling a pitch list, Hon says the first thing she normally does is check out an agency's latest work and talk to people she knows within the industry for a general perception of the agencies. "What people say about an agency can tell you a lot about internal morale and that in itself is a factor that affects an agency's output." As for creative awards, agencies see them as a morale boost for staff, but clients say they provide a barometer of an agency's creative abilities. "I would rather agencies let their work speak for them rather than agencies talking up themselves through advertising," says Coca-Cola China's non-carbonated beverage brand director Joanna Mobley. It also boils down to budgets which put advertising a distant second to direct marketing in an agency's communications arsenal. There's also the issue of timing. Pinder notes: "Advertising's expensive and for agencies to do so in the current climate it's like the MD buying a new car while he's laying off staff."

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