Perry’s case for advertising

Is advertising the hidden persuader or a benign economic necessity? Exclusive extracts taken from Sir Michael Perry’s speech to ministers

Is advertising the hidden persuader or a benign economic necessity?

Exclusive extracts taken from Sir Michael Perry’s speech to ministers

It’s rather ironic that I’m discussing this topic. It means that

advertising hasn’t managed to convey what it does and how effectively it

does it to a key group of opinion formers. Advertising hasn’t advertised


The inevitable result is that around the world advertising is under

attack - I don’t need to tell you that a lot of unbelievers have it

unbelievably wrong. Let me nail my flag firmly to the mast. My own

company, Unilever, believed in advertising to the tune of pounds 127

million in the UK alone in 1994 and almost pounds 1.27 billion

worldwide. That’s nearly 6 per cent of our total costs, so you can see

we believe it’s a valuable investment.

It started almost 100 years ago, when William Ewart Gladstone, the

surprising ‘father’ of British advertising, did two things in his budget

of 1850 that bring us here today.

The factories that sprung up in the Industrial Revolution were churning

out products and providing jobs. But they also provided a coat of

industrial grime on the faces and clothes of the workers. With soap

being a luxury not a necessity, the Great Unwashed were christened.

Gladstone repealed the tax on soap, which gave William Lever - the

founder of my company - the incentive to mass produce it to a guaranteed

standard of quality that was previously unknown. He called it Sunlight

Soap. But he had to tell people what he’d done and this is where

Gladstone’s second measure came in handy. He also repealed the tax on

paper and advertisements. And that created the popular press, which gave

William Lever and others the means to communicate with - and virtually

create by doing so - today’s ‘mass audience’.

So the marketing model that applied ever since was sketched out there

and then. You make the best quality product you know how. You put your

name on it - you brand it - to guarantee the reliability of its quality.

Then you use mass media to tell as many people as possible what you’ve

done. This hopefully creates demand, so that you can keep the individual

price unit low, which encourages people to buy; which gives you the

money to invest in research and development, so that you can continue to

improve it with new technology; which encourages people to go on buying

it and keeps it ahead of its competitors - all of whom are doing

precisely the same thing. That’s the marketing spiral that we follow to

this day.

The whole purpose of a brand is to create a long-term relationship with

the consumer and advertising is simply one way - the most efficient way

we’ve yet devised - to conduct a dialogue with that consumer.

When William Lever started his dialogue, it was a pretty simple message

- ‘trust me’. Today that element of trust a successful brand represents

is much subtler, more multi-layered.

Brands - the brands the consumer has adopted as his or her own - are a

small and important exception. They’re ‘friends’ and friends don’t let

you down, because they’re always the same. Ironic, but as society has

degenerated, so brands have regenerated. Because we can and do control

how they perform and how they speak for themselves - through


So why do advertising’s opponents feel the need to attack it so fiercely

and so often? Perhaps the best way I can explain it is to deal with the

most frequent criticisms.

Critics talk about advertising as if we’re only in it for today’s fast

buck and let tomorrow take care of itself. If, indeed, we approached our

business that way, there wouldn’t be a tomorrow. Unilever can trace its

origins back 100 years and advertising was at the heart of our business

from the beginning. We’re still here and we’re doing quite nicely, thank

you. We still believe in advertising.

Ah yes, say the critics, it’s all very well to create the demand but you

charge too much. You could sell your products cheaper. Yes, we could -

if the consumer came to us and said that a particular product would do

just fine the way it was until Doomsday. Don’t go to the trouble of

inventing the fountain pen, the quill will do just fine. Detergents?

Don’t bother - we’re used to rubbing our clothes with hard old bar soap.

The examples are legion. Many, if not most of the products in your homes

today that you take, quite rightly, for granted, came out of some

manufacturer sensing and trying to answer a latent need. It was not the

consumers storming the barricades, shouting: ‘give us cornflakes!’ or

‘we demand instant coffee!’

Let me not sound na•ve here. This was not social benevolence at work.

This was competitive business acumen, the competitive edge you achieve

by coming up with the better mousetrap, detergent, personal computer or

sports shoe. If a manufacturer doesn’t make enough money so that he can

put some of it into making the next, improved product and then have the

means - advertising - to communicate what he’s done and so start the

next cycle of the process, he will have no incentive and no means to do

it. And the consumer will be the loser.

Product innovation is directly dependent on the availability of

advertising. Existing brands that give reassurance and credibility to

product innovation are important. And in the cycle of which innovation

is a part, so are a number of other things.

If you can’t tell people what you’ve done, they’re not likely to buy

many of what you’ve made. So you won’t go on making them. You’ll close a

factory or two and a lot of people will lose their jobs. Without

innovation driving it forward, perhaps your business stagnates - perhaps

you go out of business and a lot more people lose their jobs.

If you’re not making so much, you don’t have to tell people. You don’t

advertise so much, so the media - which are largely subsidised by

advertising - suffer. Unless Rupert Murdoch decides to give it away, the

cost of the Times without advertising would be several times what it is


So, what have we got? Better products at lower prices, affordable media

and a great number of jobs, all depending on the fact that advertising

is a vital part of a mixed economy. And something else. You could argue

- and I do - that advertising is a synonym for consumer choice.

The Americans - as you might expect - are very eloquent on this issue.

They’ve even extended the principle of freedom of speech to include

freedom of commercial speech. Their argument being that, if it’s legal

to make and sell a product, then the maker of that product should have

the right to tell the public what he’s made. Allowing for the jargon, I

can’t see too much wrong with that.

Ah yes, say the critics - but freedom can so easily turn into licence.

There’s so much bad advertising around. And there, for once, I do agree

with them - although not for the reasons they might imagine. There are

far too many ads that are commercially inept, too many that are in

questionable taste.

And it’s just because advertising mistakes are so public and so readily

criticised that the advertising industry in so many countries - led, I

might add, by this one - has responded to the need to be responsible. As

head of the Advertising Association - as well as a major advertiser - I

know how much sustained effort has gone into the system of self-

regulation the industry has had in place for many years.

Perhaps the most dramatic recent example of the voice of the consumer

being heard and being decisive was last year in the US, when public

pressure led to Calvin Klein withdrawing its advertising for jeans using

young models who looked under age.

Klein could talk until he was blue in the face - and he did - about

reflecting the new spirit of freedom, a self-aware generation glorying

in its own individuality, all of which is perfectly true. But the public

said: ‘No, you’re exploiting these young people - and us - and we’re not

having it.’ The public won, as it always will and should. So I reject

the criticism that advertising is irresponsible.

I’ve sketched out very briefly the rationale for it as an integral part

of the mixed market economy in which we choose to live and I doubt that

I need to pursue that particular point further. What I would like to

throw into the discussion, though, is one endorsement that was totally

unexpected. When the Berlin Wall came down, the first thing the East

Berliners did was to rush into the Western stores to buy the brands

they’d seen advertised on the TV shows that had been hopping over the

wall for years.

Now, that’s a small example in itself but it turned out to be a

microcosm or ‘test market’ in which the competition was between two

quite different kinds of economy - what we might call ‘market-driven’

(our version) and ‘command-driven’ (the Communist version).

Consumers were deserting the one in droves because it had failed them

and rushed to embrace the other - once they had the choice.

There’s another example I find pleasing. The word ‘advertising’ tends to

bring out a certain, shall we say ‘intellectual prejudice’ in many of

its critics. I suppose it’s got to do with the rather homely nature of

some of the items that are most heavily advertised. I know - we make a

lot of them. ‘Detergent advertising’ has become a phrase that lumps a

lot of things together. And if someone wants to be really dismissive,

they talk at election time of ‘selling a politician like a packet of

soap powder’. Now, I could argue that if the average politician received

as much thought and skill in the shaping of his communication as does

the average packet of soap powder, he might come across very much better

to his consumer, the electorate. But I won’t press the point.

Instead, take a look at government advertising. The government has for

many years been one of the very biggest advertisers in this country.

Ah, yes, say the critics, but that isn’t advertising...

What nonsense. Of course, social advertising, public-service advertising

- whether it’s social benefits, Aids or public information of any kind -

is advertising and often state-of-the-art advertising at that. It takes

the proven techniques, techniques of simplification, dramatisation, and,

more importantly, personalisation and applies them to the way we live


To summarise, advertising makes the mass market possible. It fosters

competition, which keeps prices low and encourages product innovation.

It provides the choice of product that allows us all to express our

individuality. It is the key element in creating the confidence that

leads to continuity in manufacture and that stability secures continued

and increased employment in the long run. It makes a free press


I should also add that a lot of advertising fails. It is an imperfect

tool but, until someone thinks of something better, it is the best we

have at our disposal and I wish more people would take the trouble to

understand that and help us to correct its imperfections.

If there is one general truth I have observed after 40 years in global

business it is this: the world belongs to the consumer - whether she (or

he) happens to be going under the title of citizen, customer or voter.

And business will depend more and more on its understanding of what is

happening in that consumer’s heart and mind and how the changes in

society are affecting it. Not only is there no way back but the way

forward will only accentuate that need.

One of our current preoccupations in business is the rapid emergence of

the ‘new’ electronic media - the Internet, CD-Rom, the spread of cable

and satellite TV and, before long, interactive TV. The bottom line, as

the Americans say, is this: all of these new technologies will make it

possible to conduct a more personal dialogue with the consumer. And once

that’s possible the consumer will expect it.

Some people in our business find the complexity of the new scenario

disconcerting. I personally see it as the most exciting development

since I’ve been in the business. I just wish I were starting out all

over again.

Extracts taken from a speech by Sir Michael Perry CBE, the chairman of

Unilever, to a ministerial meeting organised by the Advertising

Association and the Department of Trade and Industry. Perry led the

delegation as president of the Advertising Association, a post he has

held for three years which is taken up by George Bull of Grand

Metropolitan this week. The full text of the speech is available from

the Advertising Association, 0171-828 2771