Advertising industry: a troubled decade ahead?

June 30, 1991|By Neal Lipschutz



Martin Mayer.

Little, Brown.

269 pages. $22.95.

The advertising business probably doesn't rank with America's most popular occupations. We often think of cynical manipulators urging us to buy things we don't need and filling the air waves with inane commercials.

On the television program "thirtysomething," ad types recently were portrayed as willing to wrap themselves in Gulf War-inspired patriotism in order to sell beer, and then firing an actor because he exercised his constitutional right to protest the war.

Longtime business writer Martin Mayer has no such anger toward the advertising business. He cites the "creation of perceived value through advertising" as an "American specialty" needed in an increasingly competitive world economy, and says it's an activity that increases incentives to maintain or improve product quality. He says: "However much one may dislike specific ads or commercials or even advertised products, a continuing decline of advertising as a factor in the American economy would be harmful to the national interest."

And he dismisses the notion of advertisers as manipulators who create artificial wants in people. "The wants are already there," he writes. "It's just that until the product was made and advertised, consumers had no notion that these wants could be validated."

What Mr. Mayer does find, visiting an area he explored more than 30 years ago in another book, "Madison Avenue, U.S.A.," is an industry in some trouble as the 1990s unfold, its stature diminished in the eyes of its consumer product-producing clients and grappling with new technology that has fragmented audiences.

Mr. Mayer, who has written lucidly on banking and financial markets, among many other topics, shows a sure knowledge of the world of advertising agencies. Indeed, at least a casual acquaintance with industry and general business trends of the past decade is desirable to appreciate the book.

Mr. Mayer harks back to the postwar "glory days" of advertising, when agencies planned campaigns with the involvement of the chief officers of America's consumer goods companies. Advertising played a key role in the creation and maintenance of national brands (each product as a distinct entity, not an interchangeable commodity to be judged solely on price) and blossomed as it linked up with that saturation-marketing medium, network television.

Advertising still is big business, accounting for about one-third of the $120 billion or so spent annually on selling and promotional activities, but Mr. Mayer finds it much humbled from the Madison Avenue circa 1960, when the fabled street "stood for elegance and power, gray flannel suits, but also a certain roguishness . . ." and creativity.

What happened? Many things, among them "new technologies for gathering and processing information cast doubt on the effectiveness of advertising as a sales tool. The mass audiences that had made advertising efficient began to fragment with the spread of cable television and the arrival of the VCR. . . ." More weight was given to price promotions, where the impact on sales presumably could be better measured.

Mr. Mayer quotes an ad executive as saying some manufacturers stopped trying to make their brands different or better, and even good advertising can't sell declining products. Bureaucracy increased at the agencies and client corporations, and many ad agencies went public, making them "much less flexible in their ability to respond to the changing economic environment." Agencies' role in researching consumer buying habits and influencing product development diminished.

As Mr. Mayer catalogs the problems and challenges advertising agencies face in the 1990s, he maps a world of gigantic databases that will spew out spending patterns on a household-by-household basis, more in-store advertising and a spectrum of television choices that will allow a viewer to choose the type of commercials he wants to see, or bypass them altogether (for a fee). Mr. Mayer doesn't dwell much on the "Big Brother" aspects of this coming world, but it's likely also to contain some very public debate on privacy issues.

The book is divided into sections on research, media, the international scene and the like, but Mr. Mayer sometimes piles on too many quotes and short anecdotes, obscuring his major points. Things come together better in a final chapter on the outlook for the industry. The book is a valuable update for those with a serious interest in advertising, and a stark reminder to those practicing the craft that the 1990s will be a difficult decade.

Mr. Lipschutz is a writer living in New York.

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