The ad industry has yet to win client financial chiefs over. John Tylee asks why
When it comes to convincing top clients that advertising actually works,
Britain’s ad industry must feel like it’s pounding a treadmill - one of
those machines on which you run hard and get nowhere.
Never more so than last week when the Institute of Practitioners in
Advertising and the consultancy company, KPMG, published a depressing
set of results showing how advertising and marketing are perceived in
company boardrooms in general and among finance directors in particular
(Campaign, 17 May).
Almost three years after Chris Powell, the then newly installed IPA
president, set in motion a major initiative to convince a sceptical City
of advertising’s value, the new survey suggests the extent of the task
Despite long and loud trumpeting of its advertising effectiveness
programme, it’s obvious that advertising and marketing remains a still
small voice at the highest level within many client companies.
Of the 100 finance directors taking part in the survey, fewer than a
quarter say their marketing chief is a board member. They also indicate
that advertising budgets are soft targets when times are tough and make
little secret of the low esteem in which they hold their marketing
staff. What’s more, financial chiefs reveal that when it comes to
handing out the company’s money, advertising is likely to be well
towards the back of the queue.
It all serves to underline the scale of the job facing this Thursday’s
meeting of the Marketing Council led by Sir Michael Perry, the Unilever
chairman, at which representatives of the IPA, the Advertising
Association and KPMG will attempt to lay the foundations for a
universally agreed standard of ad effectiveness.
‘The survey confirms our fears that while finance directors pay lip-
service to the value of advertising and marketing they don’t take it
seriously as a long-term investment,’ Hamish Pringle, chairman of the
IPA’s Advertising Effectiveness Committee, says.
To make matters worse, finance directors are among the most influential
figures on client company boards and are quite likely to be the chairmen
and the managing directors of the future. As they climb the company
hierarchy, they take with them their memories of Armani-clad agency
showmen whose effectiveness can’t be tested in conventional ways.
Chris Whitworth, the Publicis-FCB group financial director and veteran
of many a fee negotiation, says he has found no outright animosity to
advertising among his client counterparts, although scepticism is
sometimes barely concealed.
‘They see agencies working out of expensive premises and staffed by
highly paid people,’ he points out. ‘You can tell that, at the back of
their minds, they think we’re wasting their money.’
It is the recurring difficulty of measuring the return on advertising in
the same way as the investment in new machinery that lies at the heart
of the battle between the bean counters and agency types.
The result - as the survey shows - is that distrust of advertising by
finance directors often extends to having a poor regard for their own
marketing departments, which are sneered at for their ‘financial
The fact that the professional standing of the financial director is
rarely matched by that of the marketing director only widens the gulf
between the disciplines. A marketing degree doesn’t have the prestige of
a hard-earned accountancy qualification.
‘There’s a dearth of strong and talented marketing people and it’s not
just to do with the status of the qualification,’ Bob Willott, a
partner at the accountancy firm, Willott Kingston Smith, says.
‘Companies which don’t understand marketing or pay for it will always
attract low-grade talent.’
Undoubtedly the difficulties encountered by the IPA in convincing
clients of the link between advertising investment and commercial
success have been exacerbated by the massive cost-cutting carried out
across industry over the past four years.
This belt-tightening has been followed by a significant reduction in
adspends by packaged goods businesses, where marketing has always
enjoyed high status, and presaged a rise of other companies, especially
those in the financial services sector, whose own financial directors do
not spring from marketing cultures.
Unsurprisingly, Powell predicts it will take ten years to push home the
effectiveness message successfully. Not that anyone is suggesting there
should be any let-up in the initiative. Whitworth, in particular, points
to an emergent breed of more broadly trained accountants who have been
taught not to look at balance sheets in isolation to the rest of the
Nevertheless, there is a belief that fundamental issues need to be
addressed before the ad industry can evangelise with confidence. This is
particularly so in the wake of last year’s Saatchi affair, which many
senior advertising figures believe undid much of the progress made by
the industry since the recession.
‘Advertising has been all too effective at convincing people that it’s
all about champagne, cocaine and Porsches,’ Chris Clark, the Bates
Dorland managing director, remarks. ‘What’s often forgotten is that big
company chairmen and finance directors are likely to react more like
consumers than business professionals when faced with advertising