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 fullservice 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 persuad 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