CLOSE-UP: LIVE ISSUE/ADVERTISING’S IMAGE; How can advertising demonstrate that it works?

The ad industry has yet to win client financial chiefs over. John Tylee asks why

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



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