OPINION: State we’re in: an industry view. Graham Hinton replies to Stefano Hatfield’s analysis of our industry in the 90s

It was delightful to luxuriate in the ocean of nostalgia and half-forgotten creative brilliance accompanying Campaign’s 30th bumper birthday issue last week. But our enjoyment must not obscure the difficulties and challenges today’s advertising industry faces.

It was delightful to luxuriate in the ocean of nostalgia and

half-forgotten creative brilliance accompanying Campaign’s 30th bumper

birthday issue last week. But our enjoyment must not obscure the

difficulties and challenges today’s advertising industry faces.



I am very optimistic about the industry overall - and why not? We know

that advertising is one of the creative industries in which this country

is a world leader, a position we’ve maintained for a number of

years.



The quality of our advertising is, at its best, staggeringly good.

Advertising spend continues to rise, as do the numbers employed in the

Institute of Practitioners in Advertising’s member agencies.



But growth in revenue over the past 12 months is behind that of other

marketing services companies and, at less than 10 per cent, is below

media cost inflation. This suggests clients demonstrate more confidence

in the budgets they’re prepared to commit to buying media space than

they do in the budgets they are prepared to commit to the agencies who

fill that space. In other words, agencies are still not being recognised

and rewarded for what they do. Why?



First, as an industry we have become more and more identified with an

interest in, and an obsession with, the words and the pictures and less

and less identified with the thinking behind them. We are thought of as

an industry that sells ads rather than gives advice.



Second, without reducing the importance and value of great advertising

or the role it has to play - particularly for mature brands in mature

markets - we have failed to demonstrate that we are practitioners in

communications in its broadest sense, including direct marketing,

promotions, PR and all the new media, even though many agencies have,

and are, absorbing these disciplines. The client community has long

accepted, driven by the increasing competitiveness of the markets in

which it operates, that a consistent strategy across all communications

is the most effective way of reaching the consumer.



Third, when it comes to external presentation and selling the industry

as a serious, professional, results-orientated industry, we don’t make

the most of our case. We allow the media to sensationalise and

trivialise what we do.



As a result, we have effectively created a vacuum and into this vacuum

have stepped others who are increasingly filling the role that used to

belong to the advertising agencies.



The vacuum has been filled by consultants who provide advice on how to

achieve cost efficiency. Moreover, the agency-client relationship has

been pushed down to a less senior level within the client organisation,

with the agency often being denied access to the chairman or chief

executive, where the key decisions are now being taken. More worrying

still is the fact that clients seem prepared to pay other consultants

large sums of money for consumer insights while agencies give them away

as part of their package.



The consequence of this generosity by advertising agencies is extremely

serious. The advertising business is only as good as the people who work

within it and the inability to get paid for what we do means our ability

to recruit the brightest, most innovative and imaginative people from

university, art colleges, or wherever, is being diminished, along with

the wherewithal to invest appropriately and regularly in the training of

our people.



This, in turn, impacts on the quality of service we can deliver and the

increasing propensity of the client community to go elsewhere for

strategic advice. And yet the desire still resides within the client

community to work closely with their advertising agency. Research

undertaken for the IPA last year identified the ideal relationship that

clients want with their agency.



They want a relationship that is close, that has a sense of longevity

about it, where mutual trust is the byword and where people say what

they think.



It is a team where the two companies form a partnership and it is

perceived as the most important relationship within all the marketing

suppliers.



The agency’s role is seen as very straightforward: to provide creative

solutions to problems of communication, strong strategic thinking and

highly creative executions of those strategies.



While accepting there are very real cultural differences between the

business tribe and the advertising tribe, as they say in Oklahoma, the

farmers and the cowboys must be friends. It is time to reinforce the

image of advertising people as serious business advisers. We must show

how effective we are. The industry should be prepared to embrace a fair

criterion for payments by results.



The key measure of effectiveness is sales; however, there are a vast

number of different ways in which advertising impacts on business

success.



With this in mind, the IPA has relaunched the 1998 Advertising

Effectiveness Awards with a view to further developing our new

learning.



Above all, we must hammer home this message: advertising adds brand

equity, shareholder value, strategic thinking and consumer happiness,

all of which contributes to a return on investment. We must be as

imaginative and creative in selling our industry as we are in selling

any product. We have a unique understanding of the consumer and of the

broader business context. In a data-rich world, one that is becoming

increasingly over-supplied with facts, we bring imagination and

creativity.



I want a future where no-one quotes Lord Leverhulme any more. Where

business people believe that advertising is a powerful and

cost-effective tool for building brands. Where clients believe that only

advertising agencies can bring tougher strategic marketing thinking and

consumer understanding together with the creativity and imagination

needed to produce communications ideas that can change consumer

behaviour. I want a future where advertising is seen as an investment,

not a cost. Where the contribution of advertising agencies is more

highly valued.



Graham Hinton is the president of the Institute of Practitioners in

Advertising and the chairman of Bates Dorland



The Campaign letters page will return next week.



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