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The Modern Marketplace

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.

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The Modern Marketplace

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  1. The Modern Marketplace & “The New Advertising”

  2. Session Objectives: • The Modern Marketplace & “The New Advertising” • Not all stories have easy answers or happy endings • Complex business issues • Questions & Discussion

  3. 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!

  4. “1984” • Marketing Public Relations: Computer Magazine Reviews, Major Media Coverage • More than a good TV commercial • A new way of thinking about advertising • Total Marketing! • Sales Promotion: In-store materials • New Media Products: MacWorld, MacWeek • And more . . .

  5. 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

  6. 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?

  7. 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!

  8. Agency/Client Relationships: Cost Pressures • Compensation Pressures • 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 but...

  9. Agency/Client Relationships: • Example: “Unbundling” • Once, Agencies controlled both media and creative within “full-service 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.

  10. 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!

  11. Effectiveness Questions: • Media Efficiency (CPM) • Costs more to reach same # of people • Category Maturity • Experience makes consumers harder to persuade • Consumer Message Overload • Unlimited messages. Limited attention. Advertising’s 3 Big Problems

  12. 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!

  13. Rise of Regional Agencies: • “The Bernbach Factor” • Downloading of Technology • Graphics and Video Production • “Intellectual Software” • New Major Clients • LA - Japanese Cars

  14. 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

  15. 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.

  16. Example: Chiat/Day California Cooler “One more reason to hate California” • Creativity + California

  17. Example: Chiat/Day • Creativity + California • Creativity + California • + Terrific Talent Lee Clow Surfer, Executive Creative Director

  18. Example: Chiat/Day • Creativity + California • Creativity + California • + Terrific Talent Steve Hayden Helped create “1984”

  19. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Pioneer Car Stereo

  20. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Taco Bell

  21. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Holland American

  22. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Nissan

  23. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Public Service

  24. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work Apple Computer

  25. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work • Creativity + California • + Terrific Talent • + Terrific Work • Account Planning • Britishconsumer insight approach • Jay Chiat imports Jane Newman • Chiat\Day becomes 1st US agency with account planning

  26. Example: Chiat/Day • Creativity + California • + Terrific Talent • + Terrific Work • Creativity + California • + Terrific Talent • + Terrific Work • Account Planning • Creativity + California • + Terrific Talent • + Terrific Work • Account Planning • “Agency of the Decade”

  27. Example: Crispin Porter + Bogusky • + A NEW APPROACH • + MORE “IMC” • + “post-modern” attitude in creative

  28. Example: Crispin Porter + Bogusky • MiniCooper • Problem – introduce a very small car with a very small budget • Answer: High-impact print and outdoor and more…

  29. Example: Crispin Porter + Bogusky • MiniCooper

  30. Example: Crispin Porter + Bogusky • MiniCooper

  31. Why Advertising Changed: • Media Evolution • Consumer Changes • Globalization and World Brands • Competitive Changes

  32. Media Evolution: Sidewalk Stencil for Bamboo Lingerie • Fragmentation • More Media Choices • Smaller audiences

  33. Media Evolution: • Fragmentation • More Media Choices • Smaller audiences • Media Mergers • AOL/Time-Warner, CBS/Viacom • The Entertainment Economy • “Entertainment Brands” • Cost & Clutter

  34. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Brands Having a Tough Time:

  35. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Brands Having a Tough Time: • Campbell’s Soup

  36. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Brands Having a Tough Time: • Campbell’s Soup • Levis

  37. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Brands Having a Tough Time: • Campbell’s Soup • Levis

  38. World Brands and Globalization: • Multinational Markets = Globalization • Example: Wal-Mart comes to Germany

  39. 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

  40. Competitive Changes: • Global Agency Networks • Retailers as Marketers • UPC and Retailers

  41. Competitive Changes: • Global Agency Networks • Retailers as Marketers • UPC and Retailers • Increased Power

  42. Competitive Changes: • Global Agency Networks • Retailers as Marketers • UPC and Retailers • Increased Power • The Speed of Competition means… • A More Competitive World

  43. The New World for Marketing Communications: • Marketing Public Relations Publicity Photo for Richard Branson & Virgin

  44. The New World for Marketing Communications: • Marketing Public Relations • Direct Marketing Direct Mail for Cadillac Cetera

  45. The New World for Marketing Communications: • Marketing Public Relations • Direct Marketing • Sales Promotion Sales Promotion for SONY Credit Cards

  46. The New World for Marketing Communications: • Marketing Public Relations • Direct Marketing • Sales Promotion • Event Marketing and Sponsorship • More and more, “Marketing is Everything” Now Appearing at a Mall near you

  47. The New World for Advertising: • More Communication Options • Marketing Communications = MarCom • A Wider Range of Clients • Example: Professional Services • New Ad Agency Opportunities • New Media Thinking

  48. More MarCom Options: • Greater Sophistication in... • Sales Promotion • PR & Event Marketing • Example: Sports Marketing • Smarter Marketers doing Smarter Marketing • Example - Starbucks • Examples - Dell & Gateway

  49. A Wider Range of Clients: • New Marketing Categories • Healthcare • “Dot Coms” & Internet Services • Entertainment Brands • Media Products • New Marketing Needs • Dentists, Doctors, Lawyers • Local retailers and media • New Ventures

  50. New Advertising Agency Opportunities: • Growth of the Media Function • More Marketing Services • Account Planning • Computer-based Services • In-house Departments • Improved Target Marketing • The Internet

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