Jack Myers noted today that for several decades advertising's share of the total marketing communications mix has declined. From 1963 - 2007 advertising revenue growth has averaged 5%. Total marcom has averaged 17% growth. Jack Myers says advertising has become less relevant than other marketing forms. I disagree.
We simply don't know how relevant advertising is compared to other marketing communications choices. We do know there are more choices but I don't believe fragmentation of message distribution is the cause of advertising's stunted growth. The fact is that advertising agencies have sold out.
In the case of agencies I'll focus on media and describe it this way. An agency holding company promises a client the best media efficiencies based on clout. Smaller agencies promise the same in order to compete and will find ways to achieve low cost. Keep in mind that "value" doesn't count in this equation. Soon, price of media is commoditized and the agencies undercut each other on fees. (Remember the days of 15% commission?) The agency value proposition became "Hire me. I work cheap".
Clients took the bait but truth is they are smarter than we think. If agencies work cheaply, their thinking must not be very valuable. Think about that. Agency product is ideas but they've demonstrated their ideas aren't worth much. Clients hire consultants with Ivy League MBAs who, by the way, never discount their ideas. There you have it. Advertising professionals (especially on the media side) have become paper pushers. Clients take guidance from marcom-neutral consultants. Advertising loses.
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