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."
