The Modern Marketplace
description
Transcript of The Modern Marketplace
The Modern The Modern MarketplaceMarketplace
& “The New Advertising”& “The New Advertising”
Session Objectives:Session Objectives: Review Chapter 2Review Chapter 2
The Modern MarketplaceThe Modern Marketplace & “The New Advertising”& “The New Advertising”
This is a difficult chapterThis is a difficult chapter Not all stories have easy answers Not all stories have easy answers or or
happy endingshappy endings It covers complex business issuesIt covers complex business issues
Then, Questions & DiscussionThen, Questions & Discussion
The Modern MarketplaceThe Modern Marketplace How Advertising Changed How Advertising Changed Why Advertising ChangedWhy Advertising Changed
&& “The New Advertising”“The New Advertising” The New World of “MarCom” or “IMC” The New World of “MarCom” or “IMC”
Integrated Marketing Communications Integrated Marketing Communications
A New World for Advertising A New World for Advertising
Why This is Important to Why This is Important to You!You!
““1984”1984” More than a good More than a good
TV commercialTV commercial A new way of A new way of
thinking about thinking about advertisingadvertising
Total Marketing!Total Marketing! Marketing Public Relations: Marketing Public Relations: Computer Computer
Magazine Reviews, Major Media CoverageMagazine Reviews, Major Media Coverage
New Media Products: New Media Products: MacWorld, MacWeekMacWorld, MacWeek
Sales Promotion: Sales Promotion: In-store materialsIn-store materials
And more . . . And more . . .
““1984”1984” More than a good More than a good
TV commercialTV commercial A new way of A new way of
thinking about thinking about advertisingadvertising
Total Marketing!Total Marketing! Marketing Public Relations: Marketing Public Relations: Computer Computer
Magazine Reviews, Major Media CoverageMagazine Reviews, Major Media Coverage
New Media Products: New Media Products: MacWorld, MacWeekMacWorld, MacWeek
Sales Promotion: Sales Promotion: In-store materialsIn-store materials
And more . . . And more . . .
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How Advertising Changed:How Advertising Changed:
Financially-Driven Agency Mergers & Financially-Driven Agency Mergers &
The Rise of “Mega-Agencies” The Rise of “Mega-Agencies”
Agency/Client RelationshipsAgency/Client Relationships
Effectiveness Questions Effectiveness Questions
Lower Budgets. More Competition. Lower Budgets. More Competition.
The Rise of Regional Agencies The Rise of Regional Agencies
Financially-Driven Mergers:Financially-Driven Mergers:
From eighteen big agencies to eightFrom eighteen big agencies to eight Saatchi & Saatchi’s Big IdeaSaatchi & Saatchi’s Big Idea
P/E Ratios - London vs. New YorkP/E Ratios - London vs. New York Why is this important?Why is this important?
Who is this man?Who is this man?
Financially-Driven Mergers:Financially-Driven Mergers:
From eighteen big agencies to eightFrom eighteen big agencies to eight Saatchi & Saatchi’s Big IdeaSaatchi & Saatchi’s Big Idea
P/E Ratios - London vs. New YorkP/E Ratios - London vs. New York Why is this important?Why is this important?
Martin Sorrell Martin Sorrell - buys- buys WPP WPP ((Wire Plastic Products)Wire Plastic Products)
WPP = JWT + O&M + ...WPP = JWT + O&M + ...
Y&RY&R and more… and more…
Agency/Client Relationships:Agency/Client Relationships: A Shift of PowerA Shift of Power
Once, ad agency AEs usually madeOnce, ad agency AEs usually mademore more $$$$ than Ad Managers than Ad Managers
Now, Ad Managers usually make Now, Ad Managers usually make more more $$$$ than ad agency AEs than ad agency AEs
Client MergersClient Mergers A Maturing IndustryA Maturing Industry
Cost PressuresCost Pressures Compensation PressuresCompensation Pressures but...but...
Agency/Client Relationships:Agency/Client Relationships: Example: “Unbundling”Example: “Unbundling”
Once, Agencies controlled both media and creative within “full-Once, Agencies controlled both media and creative within “full-service agencies” service agencies”
Now, Clients may assign creative and media separately - forcing Now, Clients may assign creative and media separately - forcing agencies to “unbundle”agencies to “unbundle”
With each review, clients squeeze fees for both. With each review, clients squeeze fees for both. Result #1: Media AgenciesResult #1: Media Agencies
Mega-agencies spun off their media departments into free-Mega-agencies spun off their media departments into free-standing “media agencies.”standing “media agencies.”
Result #2: Client Purchasing InvolvementResult #2: Client Purchasing Involvement Now client Purchasing Departments are becoming involved in this Now client Purchasing Departments are becoming involved in this
significant business decision. Agencies have even less control.significant business decision. Agencies have even less control.
Effectiveness Questions:Effectiveness Questions: Sales Promotion Sales Promotion
a Growing Costa Growing Cost Particularly for Particularly for
Consumer ProductsConsumer Products Here’s how it adds Here’s how it adds
up w. up w. all costsall costsAdvertising 20%
Consumer Promo 22%
Trade Promo 58%
Source: Nielsen 7/98
Integrate!Integrate!
Incentives or Incentives or Persuasion?Persuasion?
It’s better when you It’s better when you do it together...do it together...
Media Efficiency (CPM)Media Efficiency (CPM) Costs more to reach same # of peopleCosts more to reach same # of people
Category MaturityCategory Maturity Experience makes consumers Experience makes consumers
harder to persuadeharder to persuade Consumer Message OverloadConsumer Message Overload
Unlimited messages. Limited attention.Unlimited messages. Limited attention.
Advertising’s 3 Big ProblemsAdvertising’s 3 Big ProblemsEffectiveness Questions:Effectiveness Questions:
Lower Budgets. Lower Budgets. More Competition. More Competition. ““A smaller piece of a bigger pie.”A smaller piece of a bigger pie.” Survival of the Fittest means . . .Survival of the Fittest means . . .
Tougher Competitors!!!Tougher Competitors!!! More Marketing Choices:More Marketing Choices:
Sales PromotionSales Promotion “ “MPR” (Marketing Public Relations)MPR” (Marketing Public Relations) Event Marketing/SponsorshipEvent Marketing/Sponsorship and now The Internet!and now The Internet!
Rise of Regional Agencies: Rise of Regional Agencies: ““The Bernbach Factor”The Bernbach Factor” Downloading of TechnologyDownloading of Technology
Graphics and Video ProductionGraphics and Video Production “ “Intellectual Software”Intellectual Software”
New Major ClientsNew Major Clients LA - Japanese CarsLA - Japanese Cars
Rise of Regional Agencies: Rise of Regional Agencies: ““The Bernbach Factor”The Bernbach Factor” Downloading of TechnologyDownloading of Technology
Graphics and Video ProductionGraphics and Video Production “ “Intellectual Software”Intellectual Software”
New Major ClientsNew Major Clients LA - Japanese CarsLA - Japanese Cars SF - Silicon ValleySF - Silicon Valley
Rise of Regional Agencies: Rise of Regional Agencies: ““The Bernbach Factor”The Bernbach Factor” Downloading of TechnologyDownloading of Technology
Graphics and Video ProductionGraphics and Video Production “ “Intellectual Software”Intellectual Software”
New Major ClientsNew Major Clients LA - Japanese CarsLA - Japanese Cars SF - Silicon ValleySF - Silicon Valley “ “Nike, Wal-Mart, etc.Nike, Wal-Mart, etc.
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California
California CoolerCalifornia Cooler““One more reason to hate California”One more reason to hate California”
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California Creativity + CaliforniaCreativity + California + Terrific Talent + Terrific Talent
Lee Clow Lee Clow Surfer, Executive Creative DirectorSurfer, Executive Creative Director
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California Creativity + CaliforniaCreativity + California + Terrific Talent + Terrific Talent
Steve HaydenHelped create “1984”(Steve now handles IBM)
Pioneer Car Stereo
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work Taco Bell
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work
Holland American
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work Nissan
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work
Public Service
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work
Apple Computer
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work
Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work Account PlanningAccount Planning
BritishBritish consumer insight approachconsumer insight approach Jay ChiatJay Chiat imports imports Jane Newman Jane Newman Chiat\Day becomes 1st US agency Chiat\Day becomes 1st US agency
with account planningwith account planning
Example: Chiat/DayExample: Chiat/Day Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work
Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work Account Planning Account Planning
Creativity + CaliforniaCreativity + California + Terrific Talent+ Terrific Talent + Terrific Work+ Terrific Work Account PlanningAccount Planning “ “Agency of the Decade”Agency of the Decade”
Example: Crispin Porter Example: Crispin Porter
+ Bogusky+ Bogusky
A New ApproachA New Approach less bothered by less bothered by
controversycontroversy A Search forA Search for “Social “Social
Tension”Tension” “ “post-modern”post-modern”
creative attitudecreative attitude Example: IKEA Example: IKEA (if (if
we can get we can get the the PowerPointPowerPointto work)to work)
Example: Crispin Porter + Example: Crispin Porter + BoguskyBogusky IKEAIKEA
ProblemProblem – – people keep people keep furniture long furniture long after they’re after they’re
tired of it. tired of it. CP+B’s CP+B’s
award-winning award-winning solution. solution.
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Example: Crispin Porter + Example: Crispin Porter + BoguskyBogusky MiniCooperMiniCooper
ProblemProblem – – introduce a introduce a very small car very small car with a very with a very small budgetsmall budget
Answer: High-Answer: High-impact print impact print and outdoor and outdoor and more…and more…
Example: Crispin Porter + Example: Crispin Porter + BoguskyBogusky MiniCooperMiniCooper
Example: Crispin Porter + Example: Crispin Porter + BoguskyBogusky MiniCooperMiniCooper
Example: Crispin Porter + Example: Crispin Porter + BoguskyBogusky And then… And then…
VW!VW!
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Goodby Silverstein & Partners Goodby Silverstein & Partners (San Francisco)(San Francisco) Superb Design Superb Design
(Silverstein)(Silverstein) A Search for A Search for
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Goodby Silverstein & Partners Goodby Silverstein & Partners (San Francisco)(San Francisco) Superb Design Superb Design
(Silverstein)(Silverstein) A Search for A Search for
Story (Goodby)Story (Goodby) Got Milk?Got Milk?
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“ “Got Milk?” CampaignGot Milk?” Campaign
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California Milk Processor BoardCalifornia Milk Processor Board Halted decline in milk consumptionHalted decline in milk consumption Unique “deprivation” researchUnique “deprivation” research
Got Milk?Got Milk?““Aaron Burr”Aaron Burr”
Goodby Silverstein & Goodby Silverstein & Partners (San Francisco)Partners (San Francisco)
Goodby Silverstein & Partners Goodby Silverstein & Partners (San Francisco)(San Francisco) Superb Design Superb Design
(Silverstein)(Silverstein) A Search for A Search for
Story (Goodby)Story (Goodby) Got Milk?Got Milk? Excellent Digital Excellent Digital
Capabilities Capabilities (H-(H-P/Comcast)P/Comcast)
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Goodby Silverstein & Partners Goodby Silverstein & Partners (San Francisco)(San Francisco) Excellent Digital Capabilities Excellent Digital Capabilities Example: ComcastExample: Comcast
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OK, enough fun.OK, enough fun.
Now it’s time Now it’s time to to talk about…talk about…
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Why Advertising Changed: Why Advertising Changed:
Media Evolution Media Evolution Consumer Changes Consumer Changes Globalization and World Globalization and World
BrandsBrands Competitive Competitive
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Media Evolution: Media Evolution: FragmentationFragmentation
Smaller audiencesSmaller audiences
Sidewalk Stencil for Bamboo Sidewalk Stencil for Bamboo Lingerie Lingerie
More Media ChoicesMore Media Choices
Media Evolution: Media Evolution: FragmentationFragmentation
More Media ChoicesMore Media Choices Smaller audiencesSmaller audiences
Media MergersMedia Mergers
Cost & Clutter Cost & Clutter
CBS/Viacom, NBC/UniversalCBS/Viacom, NBC/Universal The Entertainment Economy The Entertainment Economy
“ “Entertainment Brands”Entertainment Brands”
Media Revolution: Media Revolution: The InternetThe Internet
InteractivityInteractivity Audience ControlAudience Control
New Media CompaniesNew Media Companies Google, Facebook, YouTubeGoogle, Facebook, YouTube
New Media Solutions New Media Solutions Now Now everyoneeveryone needs an online needs an online
or a digital strategy. or a digital strategy. Everyone.Everyone.
Consumer Changes: Consumer Changes: Changing Loyalties Changing Loyalties Savvier ConsumersSavvier Consumers More Store Brands More Store Brands Some Brands Some Brands
Having a Tough Having a Tough Time of It…Time of It…
Consumer Changes: Consumer Changes: Changing Loyalties Changing Loyalties Savvier ConsumersSavvier Consumers More Store Brands More Store Brands Some Brands Some Brands
Having a Tough Having a Tough Time of It…Time of It… Campbell’s SoupCampbell’s Soup
Good economy =Good economy =bad business.bad business.
but then…but then…
Consumer Changes: Consumer Changes: Changing Loyalties Changing Loyalties Savvier ConsumersSavvier Consumers More Store Brands More Store Brands Some Brands Some Brands
Having a Tough Having a Tough Time of It…Time of It… Campbell’s SoupCampbell’s Soup
A bad economy isA bad economy isgood business for good business for soup!soup!
Consumer Changes: Consumer Changes: Changing Loyalties Changing Loyalties Savvier ConsumersSavvier Consumers More Store Brands More Store Brands Some Brands Some Brands
Having a Tough Having a Tough Time of It…Time of It… LevisLevis
World Brands and Globalization: World Brands and Globalization: Multinational Markets = Multinational Markets = GlobalizationGlobalization
Example: Wal-Mart comes to GermanyExample: Wal-Mart comes to Germany
World Brands and Globalization: World Brands and Globalization: Multinational Markets = Multinational Markets = GlobalizationGlobalization
Example: Wal-Mart comes to GermanyExample: Wal-Mart comes to Germany
World Brands = Worldwide CompetitorsWorld Brands = Worldwide Competitors Growth of Marketing Worldwide could Growth of Marketing Worldwide could
mean Worldwide Opportunities for mean Worldwide Opportunities for You!You! Help Wanted Worldwide: U.S. Ad Grads Help Wanted Worldwide: U.S. Ad Grads
Competitive Changes:Competitive Changes: Global Agency NetworksGlobal Agency Networks Retailers as MarketersRetailers as Marketers
UPC and RetailersUPC and Retailers
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New Information about New Information about markets markets = New = New Opportunities for New Opportunities for New BrandsBrands
Competitive Changes:Competitive Changes: Global Agency NetworksGlobal Agency Networks Retailers as MarketersRetailers as Marketers
UPC and RetailersUPC and Retailers Information = Increased PowerInformation = Increased Power
More Information > FasterMore Information > Faster
A More Competitive WorldA More Competitive World
It all adds up to…It all adds up to…
The New World forThe New World for
Marketing Public RelationsMarketing Public Relations
Publicity Photo for Richard Publicity Photo for Richard Branson & Virgin Branson & Virgin
Marketing Communications: Marketing Communications:
The New World for The New World for Marketing Communications: Marketing Communications: Marketing Public RelationsMarketing Public Relations Direct Marketing Direct Marketing
Direct Mail for Cadillac Direct Mail for Cadillac Cetera Cetera
The New World for The New World for Marketing Communications: Marketing Communications: Marketing Public RelationsMarketing Public Relations Direct Marketing Direct Marketing
Sales PromotionSales Promotion
Sales Promotion for SONY Credit Sales Promotion for SONY Credit Cards Cards
The New World for The New World for Marketing Communications: Marketing Communications: Marketing Public RelationsMarketing Public Relations Direct Marketing Direct Marketing
Sales PromotionSales Promotion Event Marketing Event Marketing
and Sponsorship and Sponsorship More and more, More and more,
“Marketing is “Marketing is Everything” Everything”
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Advertising: Advertising: The New World forThe New World for
More Communication OptionsMore Communication Options Marketing Communications =Marketing Communications = MarCom MarCom
A Wider Range of ClientsA Wider Range of Clients Example: Professional Services Example: Professional Services
New Ad Agency Opportunities New Ad Agency Opportunities
New Media ThinkingNew Media Thinking
More MarCom Options: More MarCom Options: Greater Sophistication in... Greater Sophistication in...
Sales PromotionSales Promotion PR & Event MarketingPR & Event Marketing Example: Sports MarketingExample: Sports Marketing
Smarter Marketers doing Smarter Marketers doing Smarter MarketingSmarter Marketing
Example - StarbucksExample - StarbucksQuickTime™ and a
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More MarCom Options: More MarCom Options: Greater Sophistication in... Greater Sophistication in...
Sales PromotionSales Promotion PR & Event MarketingPR & Event Marketing Example: Sports MarketingExample: Sports Marketing
Smarter Marketers doing Smarter Marketers doing Smarter MarketingSmarter Marketing
Example - McDonald’sExample - McDonald’s Example - Apple iPhoneExample - Apple iPhone
A Wider Range of Clients: A Wider Range of Clients: New Marketing CategoriesNew Marketing Categories
HealthcareHealthcare “ “Dot Coms” & Internet ServicesDot Coms” & Internet Services Entertainment BrandsEntertainment Brands Media Products (including digital)Media Products (including digital)
New Marketing NeedsNew Marketing Needs Services: Dentists, Lawyers…Services: Dentists, Lawyers… Local retailers and mediaLocal retailers and media New Ventures New Ventures
New Advertising Agency New Advertising Agency Opportunities: Opportunities: Growth of the Media FunctionGrowth of the Media Function More Marketing ServicesMore Marketing Services Account PlanningAccount Planning Computer-based ServicesComputer-based Services
In-house DepartmentsIn-house Departments Improved Target MarketingImproved Target Marketing The Internet The Internet
Problems for established firms = Problems for established firms = Opportunities for bright new companies Opportunities for bright new companies
New Media Thinking: New Media Thinking: Consumer Aperture Consumer Aperture
The best “window” for messages. The best “window” for messages. Personal Media Network (PMN)Personal Media Network (PMN)
Your own media choices Your own media choices Brand Contacts Brand Contacts
All the ways you connect with brandsAll the ways you connect with brands Database Marketing Database Marketing
Connecting with people one at a timeConnecting with people one at a time Making communication “interactive”Making communication “interactive”
This is Important To This is Important To You!You! Change is Permanent and ContinualChange is Permanent and Continual
The Speed of Change is IncreasingThe Speed of Change is Increasing
Opportunities growing WorldwideOpportunities growing Worldwide
Understanding and Managing Change Understanding and Managing Change will be will be
a Key Factor in Your Success a Key Factor in Your Success So...So...
Stay Alert!! Stay Alert!!
Questions & DiscussionQuestions & Discussion