Brand Recall

There is a raging debate going on following JWT’s withdrawal from a pitch for UPS, stating,

UPS is a big business with a very big problem to tackle,” JWT Chairman-CEO Bob Jeffrey wrote in an e-mail to colleagues. “They need to treat us or any agency as a partner, and it doesn’t seem that is in their culture. We’ve invested significant time and energy in pitching this business, so we are not taking this decision lightly.

One of the client types has commented,

Advertising needs to do what it was meant to do – increase sales (not just awareness). Getting back to those basics just might be a good exercise.

Since this is a notion that many of my friends in India would also share, I thought I would point out some obvious fallacies in the argument propounded above and weigh in with my own two-bits worth!

1. Sales is a behaviour that is dependent on the brand being available at the time the consumers want the product, at the price they are willing to pay for the incremental value they associate with the brand of the product, made by the manufacturer who is the agency’s client.
2. The incremental value associated with the brand stems from manufacturers offering something incremental (tangible or intangible, but perceived) with the product they make and making known to consumers the availability of the bundle, ie the brand. Depending on the incremental product, the brand can be a banal me-too, a superior offering or a spectacular game changer …
3. Advertising can announce the brand to the market and set the stage for consumers to be willing to give their client’s brand a chance, ie it can provide the justification to consumers to pay more for the bundled brand than just the manufacturing cost … in other words it can soften the consumers’ resistance to  manufacturers’ products.
4. But, all this is to no avail if manufacturers are not available when consumers are willing to give their brands a chance. Obviously, out of sight = out of mind = no sale … so why blame the poor fellow who created the advertising.
5. Moreover, advertising can only augment the manufacturer’s incremental efforts … if your advertising runs ahead of your brand, you can rest assured that your brand will reach an early end … there are many graves that mark this, but, if the incremental effort is specatcular, spectacular advertising can provide exponential results… there are many flags that fly as a result. In either case, advertising has only gilded the lily, and it can’t help if the lily is tarnished or lustrous! No point in shooting the messenger.

It is high time advertiser’s understand this and start heeding the partnership an advertising agency brings to the table.

Nonetheless some more last words …

To my advertiser friends going after the agency to cut costs is an oxymoron. Have you realised that 80% + of your advertising cost is in media. Just look at the math a 10% reduction in the cost of media will yield significantly higher than than even a 30% reduction in the cost of compensation of the agency. While the former (8% of your advertising cost), will give you real savings, the latter (5% of your advertising cost) will only lead to an early demise of your brand!

To my advertising friends … moaning about cost cutting by advertisers isn’t going to help unless you arm your marketing counterparts with strong weapons to allow them to justify the value you are bringing to the table. If we cannot prove that we have created a brand that adds sustainable value to our clients, then, I am afraid all of us will be treated like vendors rather than valued partners!

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