The Fall of Advertising and the Rise of PR

Chapter One

Advertising and Car Salesmen

Not long ago, four New York City nurses were killed when they drove off the top of a motel's five-story parking garage. The story made all of the New York papers, including the front page of the New York Post. Sixteen hundred mourners attended the funeral at St. Patrick's Cathedral, and one of the speakers was Mayor Giuliani. Typical newspaper headline: "Angels Take Wing As 1,600 Say Goodbye."

Nurses are nurses. Advertising executives are advertising executives and are not likely to get the same reception -- in life or in death. If four advertising executives had died driving off the Brooklyn Bridge after a three-martini lunch, the media would have treated the story quite differently. "Hucksters Go to Hell in a Honda."

Face reality. In a recent Gallup poll on the honesty and ethics of people in thirty-two different professions, advertising and advertising practitioners ranked near the bottom, right between insurance salesmen and car salesmen. (Shown at left is an abbreviated list with the percentage of respondents who felt people of each profession were honest.)

If you don't believe what an insurance or a car salesman tells you, why would you believe what you read in an advertisement? Both sources have the same degree of credibility.

Not only does advertising have an external problem with the public, but it also has an internal problem.

Advertising's Problem Inside the Corporation

"What strategy does your advertising agency suggest?" we recently asked the CEO of a large client.

"We never ask our agency what to do," he replied. "We tell them."

The advertising era is over. Today clients seldom trust their ad agencies to help them make all-important strategic decisions. What used to be a marketing partnership has degenerated into a client/vendor relationship. (A Patrick Marketing Group study of senior marketing executives found that only 3 percent of those interviewed claimed to have delegated the responsibility for establishing their brand identities to their advertising agencies.)

A recent survey of eighteen hundred business executives by the American Advertising Federation (AAF) shows that public relations is more highly regarded than advertising. The executives were asked which departments were most important to their company's success. Here are the results:

• Product development -- 29 percent
• Strategic planning -- 27 percent
• Public relations -- 16 percent
• Research & development -- 14 percent
• Financial strategies -- 14 percent
• Advertising -- 10 percent
• Legal -- 3 percent

Only the legal department ranked lower than advertising in the AAF survey. Advertising might account for a substantial share of a company's budget, but in the eyes of management its stature has been seriously eroded.

So what did the AAF do to counter the low score the advertising department received? They did what many companies do when they find themselves in trouble. They launched an advertising campaign to improve advertising's perception in the business community. Theme: "Advertising. The way great brands get to be great brands."

But if you believe that product development, strategic planning, public relations, research and development, and financial strategies are more important than advertising to a company's success (and that is what the survey shows), then why would you believe an advertisement that boldly states, "Advertising is the way great brands get to be great brands"?

It's a classic case of cognitive dissonance. You can't hold advertising in low esteem and also believe an ad that says advertising builds great brands. Except, of course, if you don't believe that great brands are important. Which would mean that the American Advertising Federation now has two problems: advertising and brands.

The weakest link in any advertising program is its credibility. An advertising message has little believability with the average person. Advertising is taken for what it is -- a biased message paid for by a company with a selfish interest in what the consumer consumes.

Advertising's Golden Era

It wasn't always so. After World War II, advertising was the rising star in corporate America. At Procter & Gamble, Hershey's, Coca-Cola, Campbell's, and many other consumer goods companies, it was the advertising people that ruled the roost.

In Hollywood, they even made movies where advertising people were the heroes. The Hucksters, starring Clark Gable and Deborah Kerr, was a notable example. Also, The Man in the Gray Flannel Suit starring Gregory Peck. (People assumed that anyone who wore a gray flannel suit was in the advertising business, but Peck actually played the role of a PR person.)

Helped by the introduction of television after World War II, advertising volume exploded. By 1972, the annual per capita expenditure on advertising was $110. Today, the comparable number is $865. Truly we live in an overcommunicated society and it's not getting any quieter. (Adjusted for the effect of inflation, the 1972 figure would have been $465.)

What happens when the volume of almost anything begins to soar out of sight?

Volume Up, Effectiveness Down

The rise of advertising volume coincided with a decline in advertising effectiveness. Every advertising effectiveness study shows the same results. The more advertising in a given medium, the less effective each individual advertisement is.

An advertisement in a thin magazine will generally be seen and read by more people than an advertisement in a thick issue of the same publication. A commercial on a television show with few commercials will generally be noticed by more people than a commercial on a TV show with many commercials.

Not only has advertising volume risen, but advertising costs have risen even faster. In 1972, for example, the price of a thirty-second Super Bowl commercial was $86,000 and it reached 56,640,000 people. Cost per thousand: $1.52.

Last year a thirty-second Super Bowl commercial cost $2, 100,000 and reached 88,465,000 people. Cost per thousand: $23.74 or nearly 16 times as much. (To be fair, if you figure in inflation, the cost today is 3.7 times as much. On the other hand, a 270 percent increase in three decades is a big increase indeed.)

In addition to the media cost, there's also the cost of production which is not cheap either. According to the American Association of Advertising Agencies, the average cost to produce a thirty-second TV commercial is currently $343,000.

Some categories are even more expensive. The average production cost of a thirty-second soft drink or snack commercial is $530,000. For apparel and clothing the average cost jumps to $1,053,000.

The Fall of Advertising and the Rise of PR. Copyright © by Al Ries. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.