Chapter Two The Modern Marketplace and "The New Advertising”
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Transcript Chapter Two The Modern Marketplace and "The New Advertising”
The Modern
Marketplace
& “The New Advertising”
Session Objectives:
The
Modern Marketplace
& “The New Advertising”
Not all stories have easy answers
or happy endings
Complex business issues
Questions
& Discussion
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!
“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 . . .
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
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?
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 + ...
and now . . . Y&R!
Agency/Client Relationships:
A Shift of Power
Once, agency AEs made more $$
than Ad Managers
Now, Ad Managers make more $$
than ad agency AEs
Client Mergers
A Maturing Industry
Cost Pressures but... Compensation Pressures
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.
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!
Advertising 20%
Consumer Promo 22%
Trade Promo 58%
Source: Nielsen 7/98
Effectiveness Questions:
Advertising’s 3 Big Problems
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.
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!
Rise of Regional Agencies:
“The Bernbach Factor”
Downloading of Technology
Graphics and Video Production
“Intellectual Software”
New Major Clients
LA - Japanese Cars
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
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.
Example: Chiat/Day
Creativity + California
California Cooler
“One more reason to hate California”
Example: Chiat/Day
Creativity + California
+ Terrific Talent
Lee Clow
Surfer, Executive Creative Director
Example: Chiat/Day
Creativity + California
+ Terrific Talent
Steve Hayden
Helped create “1984”
Example: Chiat/Day
Creativity + California
+ Terrific Talent
+ Terrific Work
Pioneer Car Stereo
Example: Chiat/Day
Creativity + California
+ Terrific Talent
+ Terrific Work
Taco Bell
Example: Chiat/Day
Creativity + California
+ Terrific Talent
+ Terrific Work
Holland American
Example: Chiat/Day
Creativity + California
+ Terrific Talent
+ Terrific Work
Nissan
Example: Chiat/Day
Creativity + California
+ Terrific Talent
+ Terrific Work
Public Service
Example: Chiat/Day
Creativity + California
+ Terrific Talent
+ Terrific Work
Apple Computer
Example: Chiat/Day
Creativity + California
+ Terrific Talent
+ Terrific Work
Account Planning
British consumer insight approach
Jay Chiat imports Jane Newman
Chiat\Day becomes 1st US agency
with account planning
Example: Chiat/Day
Creativity + California
+ Terrific Talent
+ Terrific Work
Account Planning
“Agency of the Decade”
Example: Crispin Porter
+ A NEW APPROACH
+ MORE “IMC”
+ “post-modern”
attitude in creative
+ Bogusky
Example: Crispin Porter
+ Bogusky
MiniCooper
Problem –
introduce a
very small car
with a very
small budget
Answer: Highimpact print
and outdoor
and more…
Example: Crispin Porter
+ Bogusky
MiniCooper
Example: Crispin Porter
+ Bogusky
MiniCooper
Why Advertising Changed:
Media Evolution
Consumer Changes
Globalization and World
Brands
Competitive
Changes
Media Evolution:
Fragmentation
More Media Choices
Smaller audiences
Sidewalk Stencil for
Bamboo Lingerie
Media Evolution:
Fragmentation
More Media Choices
Smaller audiences
Media Mergers
AOL/Time-Warner, CBS/Viacom
The Entertainment Economy
“Entertainment Brands”
Cost & Clutter
Consumer Changes:
Changing Loyalties
Savvier Consumers
More Store Brands
Brands Having
a Tough Time:
Consumer Changes:
Changing Loyalties
Savvier Consumers
More Store Brands
Brands Having
a Tough Time:
Campbell’s Soup
Consumer Changes:
Changing Loyalties
Savvier Consumers
More Store Brands
Brands Having
a Tough Time:
Campbell’s Soup
Levis
Consumer Changes:
Changing Loyalties
Savvier Consumers
More Store Brands
Brands Having
a Tough Time:
Campbell’s Soup
Levis
World Brands and
Globalization:
Multinational Markets = Globalization
Example: Wal-Mart comes to Germany
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
Competitive Changes:
Global Agency Networks
Retailers as Marketers
UPC and Retailers
Competitive Changes:
Global Agency Networks
Retailers as Marketers
UPC and Retailers
Increased Power
Competitive Changes:
Global Agency Networks
Retailers as Marketers
UPC and Retailers
Increased Power
The Speed of Competition
means…
A More Competitive World
The New World for
Marketing Communications:
Marketing Public Relations
Publicity Photo for
Richard Branson
& Virgin
The New World for
Marketing Communications:
Marketing Public Relations
Direct Marketing
Direct Mail for
Cadillac Cetera
The New World for
Marketing Communications:
Marketing Public Relations
Direct Marketing
Sales Promotion
Sales Promotion for
SONY Credit Cards
The New World for
Marketing Communications:
Marketing Public Relations
Direct Marketing
Sales Promotion
Event Marketing
and Sponsorship
More and more,
Now Appearing
“Marketing
is
at a Mall near you
The New World for
Advertising:
More Communication Options
Marketing Communications = MarCom
A Wider Range of Clients
Example: Professional Services
New Ad Agency Opportunities
New Media Thinking
More MarCom Options:
Greater Sophistication in...
Sales Promotion
PR & Event Marketing
Example: Sports Marketing
Smarter Marketers doing
Smarter Marketing
Example - Starbucks
Examples - Dell & Gateway
A Wider Range of Clients:
New Marketing Categories
Healthcare
“Dot Coms” & Internet Services
Entertainment Brands
Media Products
New Marketing Needs
Dentists, Doctors, Lawyers
Local retailers and media
New Ventures
New Advertising Agency
Opportunities:
Growth of the Media Function
More Marketing Services
Account Planning
Computer-based Services
In-house Departments
Improved Target Marketing
The Internet
New Media Thinking:
Consumer Aperture
The best “window” for messages.
Personal Media Network (PMN)
Your own media choices
Brand Contacts
All the ways you connect with brands
Database Marketing
Connecting with people one at a time
Making communication “interactive”
This is Important To You!
Change is Permanent and Continual
The Speed of Change is Increasing
Opportunities growing Worldwide
Understanding and Managing Change
will be a Key Factor in Your Success
Questions & Discussion