This week’s Midyear Report Card and look at what may lie ahead during the second half of 2005 reflects an ever-changing marketplace. Indeed, the agencies and clients that chart a savvy course into emerging media and branded entertainment figure to have a leg up in a competition that is diversifying beyond traditional ad forms. Yet attaining a measure of success on this front is not necessarily a buffer against the trials and tribulations of a constantly evolving client/agency relationship.
For example, Fallon Minneapolis–which created arguably the most significant piece of pioneering, new breed marketing fare in recent years, “The Hire” series of BMW Films–lost the coveted car account just a few weeks ago. Exactly why Fallon declined to defend the BMW business in a recently instituted client review isn’t publicly known. Certainly there have been assorted agencies over the years that have generated great creative for clients only to later see the business depart. But on the surface at least, the irony of the situation has been cause for industry water cooler chatter–an agency that fashioned a high profile new-media killer app and helped to define the Web-based film genre no longer has the client it teamed with to break this new ground.
That may speak to the inherent longstanding perils of the ad biz and agency/client relationships. However, successfully navigating that client/agency course has become even more daunting when you add to the mix the dynamic of trying to intelligently deal with and shape a new-media landscape.
Agencies are grappling to stay relevant given the evolving nature of the biz. Several large-scale marketers are looking to smaller, creatively focused shops for brand solutions (e.g., the relationship between Dasani (part of Coca-Cola, and creative boutique Anomaly, New York). Some clients are bypassing their agencies altogether in the exploration of new forms. In a number of these cases, talent agencies are playing a more prominent role.
Underscoring the changing climate was the recent news that television advertising stalwart Procter & Gamble (P&G) is looking to reallocate a significant percentage of funds from TV to other emerging forms. Overall projections clearly point to a shift in priorities and resources. Robert Coen, senior VP/director of forecasting at media agency Universal McCann, New York, has revised his December 2004 prediction that ad spending would rise 6.1 percent in ’05 as compared to the previous year. He now sees that increase declining to about 5.7 percent, which would translate into some $278.8 billion in ad spending this year.
According to Coen, double-digit increases are in store for the Internet and cable TV–the former will go up 15 percent, while cable is slated for 12 percent growth over its performance in ’04. Meanwhile, network TV will rise a mere two percent. And spot TV will take a major hit due to an unfavorable comparison to ’04 when political advertising generated significant revenue.
Citing the ’04 Summer Olympics and the record-setting political ad expenditures during a national election year, Coen assessed, “It will be difficult for many media to post significant gains in 2005 in comparison with their high ad revenues in those months [of the third quarter] in 2005.”
Meanwhile, projecting an even more modest increase–with ad buy expenditures going up 3.4 percent this year as stacked up against ’04–is industry forecaster TNS Media Intelligence.
TITANIUM
Yet while traditional broadcast ad spending during the second half of ’04 will hardly be bullish as compared to last year, there’s plenty of room to flex one’s creative muscle in the integrated campaign arena. (See this week’s page 7 feature on Audi’s broad-based “Art of the H3ist” campaign.) The growing importance of integrated fare was underscored in part by the Integrated Titanium category, which debuted at Cannes last month. The category was formed to recognize notable creative work that successfully encompasses at least three different media or platforms.
Automobile makers drove away with all except one of the inaugural Titanium Lion honors. Mini Cooper’s “Counterfeit” package out of Crispin Porter + Bogusky, Miami, which included online, broadcast, and DVD elements, picked up a Titanium Lion. (Bryan Buckley of bicoastal/international Hungry Man directed the DVD and broadcast elements of the package.)
Honda Diesel’s “Grrr,” package, which in addition to its award-winning TV spot–that picked up the film Grand Prix–also included other integrated elements, and earned a Titanium Lion. A package for Volvo, out of Fuel, Amsterdam, won Titanium. The work included Web-based short films and trailers that featured conversations between people in Volvos. One such conversation was with Bethany Hamilton, the surfer who lost her arm in a shark attack.
Chairing the jury for the Titanium category was Jeff Goodby, co-chairman of Goodby, Silverstin & Partners, San Francisco. Goodby noted that he and his fellow jurors wanted to maintain the high standard of looking for ideas “that point the way forward” when awarding the Titanium honors. “We went back to original intention of the award–of showing the way forward” said Goody. He added that they looked for work that people would turn to as “redefining the way we engage people.” No Grand Prix was awarded this year, related Goodby, because although good work was entered and honored, “none of the pieces were at that level.” He also pointed out that the type of work honored by the Titanium Lions represent the future of both advertising and the Cannes Festival, and would one day become one of the most coveted advertising honors.
Goodby noted that simply being an integrated campaign–i.e. across multiple channels–wasn’t enough to garner a Titanium Lion, and in fact some of the non-winning entries were more integrated than what was awarded.
Titanium jury member Daniel Morel, chairman/CEO of Wunderman, New York, said that one of the trends present in the Titanium work was that it showed that “the consumer is very much in command, and intimacy [between the brand and the consumer] was created through the work.”
Titanium judge Robert Greenberg, chairman/CEO/chief creative officer of R/GA, New York, noted that the make-up of the Titanium jury itself points to the future of the industry, of how it must collaborate to create groundbreaking work. The 10-member jury comprised senior level people from multiple disciplines, including direct marketing, media, creative and filmmaking, although he cautioned that integration alone wasn’t enough to create a Titanium-winning piece of work.
On the presence of multiple winning campaigns from automakers, Greenberg related that car companies “were one of the first to develop a great consumer experience” online, and it was natural for them to take the lead in moving forward.
TRADITION
However, effective advertising can still be rooted in traditional fare–and at times doesn’t require glossy, ambitious creative. And a mainstay automaker, General Motors, a perennial leading ad spender, exemplifies this in its GM employee discount campaign, which–while it may not garner any creative awards–is helping to generate major business, something the faltering auto giant needs.
The creative strategy has caused the competitive vehicle sales sector to take notice. So much so that Ford and Chrysler have since taken up similar “employee discount”-type incentives to drive biz to their showrooms.
The GM employee-discount-for-everyone promotion boosted its U.S. vehicle sales in June by a whopping 47 percent over June ’04. Indeed June ’05 is the best month GM has had in 19 years. Still the jury is out in some respects. For example, critics contend the run on GM vehicles in June will be offset by lower sales during the second half of ’05. However, others claim that the program could prove to be a long-term success as a viable means to bring new customers into the GM fold–customers who otherwise might not have considered buying a GM product.
The major jumpstart that’s sprung from the strategy, though, clearly underscores the power of mass traditional media–most notably the ability of major broadcast buys to help bring the promotion to the attention of prospective consumers throughout the country. This was in turn supported by GM’s Web site, to which TV, radio and print ads drove traffic.
Clearly integral to successful advertising are great creative, great filmmaking and great creative strategy. The latter, though, often gets short shrift–even with the results generated by the GM promotion.
In that vein, Cheryl Berman, chairman/chief creative officer of Leo Burnett USA, made her case for the Effies being a leading awards show in that those honors are based on the effectiveness of advertising. In her keynote address at the awards ceremony last month, Berman observed, “The Effies are not the best award show in the business. And my point is they should be. This business has changed, and like it or not, we will all be judged on results, and this award show is positioned to be all about results. Our clients seem to understand that, and celebrate that. Our clients already recognize the importance and relevance of these awards in today’s world.
“But, at the end of the day, the questions become are we awarding just the result, or are we rewarding the result of great creative? I believe this show is about–should be about–awarding the results of brilliant creative, the effectiveness of brilliant ideas and execution in the marketplace. This is what we should all strive for.”
SMALL SCREENS, VIDEO GAMES, BROADBAND
Clearly, though, effectiveness is beginning to encompass a mix of traditional and emerging ad platforms. Cell phone screens, PDAs, broadband and video games all made inroads in ’05 into the advertising industry consciousness. Cell phone and PDA applications were discussed in detail during last month’s PROMAX & BDA confab in New York (SHOOT, 7/1, p. 1).
Meanwhile, in-video game advertising provider Massive is slated to start deploying 10-second spots for clients this month. Plans call for game players to see short animated spots in natural game settings, such as when characters pass by a TV set that is on. This will diversify the ad options beyond the static billboards that have become more visible within games.
Online advertising is becoming increasingly attractive as well, with the numbers drawing a wider range of interested clients. According to a recently released PricewaterhouseCoopers study on the growth of global entertainment, broadband penetration in the U.S. is expected to reach 39 million households this year–that’s about half of all online households.
This penetration is reaching a level enabling advertisers to more easily justify investments in the medium. High-speed access to the Internet also opens up more video advertising opportunities. Furthermore, projections are that the number of households will rise to 62 million in ’09. By that time, it’s estimated that advertisers will be spending some $54.2 billion annually on online.
