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The Modern Marketplace

This session revisits Chapter 2, focusing on the complexities of the modern marketplace and the evolution of advertising. It explores the emergence of integrated marketing communications (IMC) and how advertising has evolved due to financial pressures, agency mergers, and increasing competition. Attendees will engage in discussions on why these changes matter, the shift in agency-client relationships, and the rise of regional agencies. We will address key challenges facing advertisers today, including budget constraints, media efficiency, and consumer message overload, providing insights for adapting to a changing landscape.

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The Modern Marketplace

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  1. The Modern Marketplace & “The New Advertising”

  2. Session Objectives: • Review Chapter 2 • The Modern Marketplace & “The New Advertising” • This is a difficult chapter • Not all stories have easy answers or happy endings • It covers complex business issues • Then, Questions & Discussion

  3. The Modern Marketplace • How Advertising Changed • Why Advertising Changed &“The New Advertising” • The New World of “MarCom” or “IMC” Integrated Marketing Communications • A New World for Advertising • Why This is Important to You!

  4. “1984” • More than a good TV commercial • A new way of thinking about advertising • Total Marketing! • Marketing Public Relations: Computer Magazine Reviews, Major Media Coverage • Sales Promotion: In-store materials • New Media Products: MacWorld, MacWeek • And more . . .

  5. “1984” • More than a good TV commercial • A new way of thinking about advertising • Total Marketing! • Marketing Public Relations: Computer Magazine Reviews, Major Media Coverage • Sales Promotion: In-store materials • New Media Products: MacWorld, MacWeek • And more . . .

  6. How Advertising Changed: • Financially-Driven Agency Mergers & The Rise of “Mega-Agencies” • Agency/Client Relationships • Effectiveness Questions • Lower Budgets. More Competition. • The Rise of Regional Agencies

  7. Financially-Driven Mergers: • From eighteen big agencies to eight • Saatchi & Saatchi’s Big Idea • P/E Ratios - London vs. New York • Why is this important? Who is this man?

  8. Financially-Driven Mergers: • From eighteen big agencies to eight • Saatchi & Saatchi’s Big Idea • P/E Ratios - London vs. New York • Why is this important? • Martin Sorrell - buys WPP (Wire Plastic Products) • WPP = JWT + O&M + ... • Y&R and more…

  9. Agency/Client Relationships: Cost Pressures • Compensation Pressures • A Shift of Power • Once, ad agency AEs usually made more $$ than Ad Managers • Now, Ad Managers usually make more $$ than ad agency AEs • Client Mergers • A Maturing Industry but...

  10. Agency/Client Relationships: • Example: “Unbundling” • Once, Agencies controlled both media and creative within “full-service agencies” • Now, Clients may assign creative and media separately - forcing agencies to “unbundle” • With each review, clients squeeze fees for both. • Result #1: Media Agencies • Mega-agencies spun off their media departments into free-standing “media agencies.” • Result #2: Client Purchasing Involvement • Now client Purchasing Departments are becoming involved in this significant business decision. Agencies have even less control.

  11. Effectiveness Questions: • Sales Promotion a Growing Cost • Particularly for Consumer Products • Here’s how it adds up w. all costs • Incentives or Persuasion? • It’s better when you do it together... • Integrate!

  12. Effectiveness Questions: • Media Efficiency (CPM) • Costs more to reach same # of people • Category Maturity • Experience makes consumers harder to persuade • Consumer Message Overload • Unlimited messages. Limited attention. Advertising’s 3 Big Problems

  13. Lower Budgets. More Competition. • “A smaller piece of a bigger pie.” • Survival of the Fittest means . . . Tougher Competitors!!! • More Marketing Choices: • Sales Promotion • “MPR” (Marketing Public Relations) • Event Marketing/Sponsorship • and now The Internet!

  14. Rise of Regional Agencies: • “The Bernbach Factor” • Downloading of Technology • Graphics and Video Production • “Intellectual Software” • New Major Clients • LA - Japanese Cars

  15. Rise of Regional Agencies: • “The Bernbach Factor” • Downloading of Technology • Graphics and Video Production • “Intellectual Software” • New Major Clients • LA - Japanese Cars • SF - Silicon Valley

  16. Rise of Regional Agencies: • “The Bernbach Factor” • Downloading of Technology • Graphics and Video Production • “Intellectual Software” • New Major Clients • LA - Japanese Cars • SF - Silicon Valley • “Nike, Wal-Mart, etc.

  17. Example: Chiat/Day California Cooler “One more reason to hate California” • Creativity + California

  18. Example: Chiat/Day • Creativity + California • Creativity + California • + Terrific Talent Lee Clow Surfer, Executive Creative Director

  19. Example: Chiat/Day • Creativity + California • Creativity + California • + Terrific Talent Steve Hayden Helped create “1984” (Steve now handles IBM)

  20. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Pioneer Car Stereo

  21. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Taco Bell

  22. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Holland American

  23. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Nissan

  24. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Public Service

  25. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Apple Computer

  26. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work • Creativity + California • + Terrific Talent • + Terrific Work • Account Planning • Britishconsumer insight approach • Jay Chiat imports Jane Newman • Chiat\Day becomes 1st US agency with account planning

  27. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work • Creativity + California • + Terrific Talent • + Terrific Work • Account Planning • Creativity + California • + Terrific Talent • + Terrific Work • Account Planning • “Agency of the Decade”

  28. Example: Crispin Porter + Bogusky • A New Approach • less bothered by controversy • A Search for “Social Tension” • “post-modern” creative attitude • Example: IKEA (if we can get the PowerPoint to work)

  29. Example: Crispin Porter + Bogusky • IKEA • Problem – people keep furniture long after they’re tired of it. • CP+B’s award-winning solution.

  30. Example: Crispin Porter + Bogusky • MiniCooper • Problem – introduce a very small car with a very small budget • Answer: High-impact print and outdoor and more…

  31. Example: Crispin Porter + Bogusky • MiniCooper

  32. Example: Crispin Porter + Bogusky • MiniCooper

  33. Example: Crispin Porter + Bogusky • And then… • VW!

  34. Goodby Silverstein & Partners (San Francisco) • Superb Design (Silverstein) • A Search for Story (Goodby)

  35. Goodby Silverstein & Partners (San Francisco) • Superb Design (Silverstein) • A Search for Story (Goodby) • Got Milk?

  36. Goodby Silverstein & Partners (San Francisco) • “Got Milk?” Campaign • California Milk Processor Board • Halted decline in milk consumption • Unique “deprivation” research Got Milk? “Aaron Burr”

  37. Goodby Silverstein & Partners (San Francisco) • Superb Design (Silverstein) • A Search for Story (Goodby) • Got Milk? • Excellent Digital Capabilities (H-P/Comcast)

  38. Goodby Silverstein & Partners (San Francisco) • Excellent Digital Capabilities • Example: Comcast

  39. OK, enough fun. Now it’s time to talk about…

  40. Why Advertising Changed: • Media Evolution • Consumer Changes • Globalization and World Brands • Competitive Changes

  41. Media Evolution: Sidewalk Stencil for Bamboo Lingerie • Fragmentation • More Media Choices • Smaller audiences

  42. Media Evolution: • Fragmentation • More Media Choices • Smaller audiences • Media Mergers • CBS/Viacom, NBC/Universal • The Entertainment Economy • “Entertainment Brands” • Cost & Clutter

  43. Media Revolution: • The Internet • Interactivity • Audience Control • New Media Companies • Google, Facebook, YouTube • New Media Solutions • Now everyone needs an online or a digital strategy. Everyone.

  44. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Some Brands Having a Tough Time of It…

  45. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Some Brands Having a Tough Time of It… • Campbell’s Soup • Good economy = bad business. but then…

  46. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Some Brands Having a Tough Time of It… • Campbell’s Soup • A bad economy is good business for soup!

  47. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Some Brands Having a Tough Time of It… • Levis

  48. World Brands and Globalization: • Multinational Markets = Globalization • Example: Wal-Mart comes to Germany

  49. World Brands and Globalization: • Multinational Markets = Globalization • Example: Wal-Mart comes to Germany • World Brands = Worldwide Competitors • Growth of Marketing Worldwide could mean Worldwide Opportunities for You! • Help Wanted Worldwide: U.S. Ad Grads

  50. Competitive Changes: • New Information about markets = New Opportunities for New Brands • Global Agency Networks • Retailers as Marketers • UPC and Retailers

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