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[scottsdale, ariz.] Offering a road map for the next several years, American Association of Advertising Agencies President-CEO O. Burtch Drake outlined 12 ad industry problems that need to be addressed.

Speaking at the Four A's annual meeting, Mr. Drake zeroed in on TV talent payments; network integration fees; magazine bleed charges; electronic data interchange; media measurement; tobacco advertising; the need for increased diversity; the value of advertising; search consultants; agency compensation; talent; and the annual meeting itself.


Noting that since 1986 the number of members and guests attending the Four A's annual meeting has declined from 751 to 440 -- due, he said, to recession, tax law changes and agency consolidation -- Mr. Drake suggested the group combine its annual meeting with that of the Association of National Advertisers.

"This is one that will probably never happen on my watch, but I lay it out there for your consideration and ANA consideration," he said.

That might be a realistic assessment, considering the reaction of advertiser executives in attendance at the meeting, some of whom privately said they believe they'd be hounded for business by every agency in attendance.

ANA President-CEO John Sarsen, who attended the Four A's meeting, said afterwards that prospects for early action on such a joint convention were not good.

"In the short term, given the different agendas, it's not going to happen," Mr. Sarsen said.

Further addressing finances, Mr. Drake called on the industry to make good on its promise to tie TV talent compensation to the value of audience delivered, which so far has resulted in "some talk and no action."

He also cited a need to do away with network TV integration fees, a charge not for airtime but for physically putting an advertiser's commercial on the air. CBS, NBC and ABC currently charge such fees; no other broadcast or cable network does.


Mr. Drake said agency guidelines for dealing with search consultants are having an impact, although he said he's disappointed ANA hasn't done more to support the guidelines.

"What's not good is what we heard from a number of search consultants about how agencies comport themselves in the compensation phase of the process," he said. "They were quick to point out that agencies are often their own worst enemy because they are too quick to give in and are poor negotiators. We need to fix that."

Agency executives in attendance echoed Mr. Drake, saying agencies too often succumb to unrealistic client demands.

"If the top 15 agencies don't take a strong line, if they keep rolling over, then everybody will roll over," said Bates North America CEO Bill Whitehead.

Other news from the Four A's meeting:

nPatrick McGrath, president-CEO of Jordan, McGrath, Case & Taylor, New York, was elected chairman, succeeding Ralph Rydholm, CEO, Euro RSCG Tatham, Chicago. Shelly Lazarus, chairman-CEO, Ogilvy & Mather Worldwide, New York, was elected vice chairman, and Sally Minard, partner, Lotas Minard Patton McIver, New York, secretary-treasurer.

nCliff Freeman & Partners took first place in the 1998 O'Toole Creative Awards for agencies with billings of more than $30 million; DeVito/Verdi, New York, won for agencies with billings of less than $30 million. Large-agency runners-up were BBDO Worldwide, New York, tied with Lowe & Partners/SMS, New York. Borders, Perrin & Norrander, Portland, Ore., was the small-agency runner-up.

Contributing: Pat Sloan, Laura Petrecca, Judann Pollack.

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