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The Modern Marketplace

The Modern Marketplace. & “The New Advertising”. Session Objectives:. Review Chapter 2 The Modern Marketplace & “The New Advertising” This is a difficult chapter Not all stories have easy answers or happy endings It covers complex business issues Then, Questions & Discussion.

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The Modern Marketplace

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  1. The Modern Marketplace & “The New Advertising”

  2. Session Objectives: • Review Chapter 2 • The Modern Marketplace & “The New Advertising” • This is a difficult chapter • Not all stories have easy answers or happy endings • It covers complex business issues • Then, 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” • 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 . . .

  5. “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 . . .

  6. 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

  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? Who is this man?

  8. 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 + ... • Y&R and more…

  9. Agency/Client Relationships: Cost Pressures • Compensation Pressures • A Shift of Power • Once, ad agency AEs usually made more $$ than Ad Managers • Now, Ad Managers usually make more $$ than ad agency AEs • Client Mergers • A Maturing Industry but...

  10. 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.

  11. 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!

  12. 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

  13. 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!

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

  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

  16. 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.

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

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

  19. Example: Chiat/Day • Creativity + California • Creativity + California • + Terrific Talent Steve Hayden Helped create “1984” (Steve now handles IBM)

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

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

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

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

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

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

  26. 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

  27. 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”

  28. Example: Crispin Porter + Bogusky • A New Approach • less bothered by controversy • A Search for “Social Tension” • “post-modern” creative attitude • Example: IKEA (if we can get the PowerPoint to work)

  29. Example: Crispin Porter + Bogusky • IKEA • Problem – people keep furniture long after they’re tired of it. • CP+B’s award-winning solution.

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

  31. Example: Crispin Porter + Bogusky • MiniCooper

  32. Example: Crispin Porter + Bogusky • MiniCooper

  33. Example: Crispin Porter + Bogusky • And then… • VW!

  34. Goodby Silverstein & Partners (San Francisco) • Superb Design (Silverstein) • A Search for Story (Goodby)

  35. Goodby Silverstein & Partners (San Francisco) • Superb Design (Silverstein) • A Search for Story (Goodby) • Got Milk?

  36. Goodby Silverstein & Partners (San Francisco) • “Got Milk?” Campaign • California Milk Processor Board • Halted decline in milk consumption • Unique “deprivation” research Got Milk? “Aaron Burr”

  37. Goodby Silverstein & Partners (San Francisco) • Superb Design (Silverstein) • A Search for Story (Goodby) • Got Milk? • Excellent Digital Capabilities (H-P/Comcast)

  38. Goodby Silverstein & Partners (San Francisco) • Excellent Digital Capabilities • Example: Comcast

  39. OK, enough fun. Now it’s time to talk about…

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

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

  42. Media Evolution: • Fragmentation • More Media Choices • Smaller audiences • Media Mergers • CBS/Viacom, NBC/Universal • The Entertainment Economy • “Entertainment Brands” • Cost & Clutter

  43. Media Revolution: • The Internet • Interactivity • Audience Control • New Media Companies • Google, Facebook, YouTube • New Media Solutions • Now everyone needs an online or a digital strategy. Everyone.

  44. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Some Brands Having a Tough Time of It…

  45. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Some Brands Having a Tough Time of It… • Campbell’s Soup • Good economy = bad business. but then…

  46. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Some Brands Having a Tough Time of It… • Campbell’s Soup • A bad economy is good business for soup!

  47. Consumer Changes: • Changing Loyalties • Savvier Consumers • More Store Brands • Some Brands Having a Tough Time of It… • Levis

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

  49. 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

  50. Competitive Changes: • New Information about markets = New Opportunities for New Brands • Global Agency Networks • Retailers as Marketers • UPC and Retailers

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