Bob Wehling of Procter & Gamble Co. opened the door to a major overhaul in P&G ad agency compensation when he said pay schemes should be "media neutral." The idea, he said, "is to reach consumers in the most effective way possible."
What P&G wants to do, Mr. Wehling said during a panel session, is to "surround the consumer" by "blending the various media" into a harmonious mix.
The only way you can make compensation "media neutral" is to abandon the commission system altogether, not just tinker with it. So is Procter gearing up to put its agencies on a fee system so that they won't have an incentive to favor one medium (i.e. network TV) over others?
He contended agencies "need to lead clients in a period of dramatic changes." What he's looking for are "poets, psychologists, anthropologists, people who come to the consumer from varying perspectives."
So what agencies now need to find are a few good poets and anthropologists? That ought to be worth a boost in their newly negotiated fees.
I got the distinct impression that all is not sweetness and light between the Four A's and its advertiser counterpart, the Association of National Advertisers. ANA has always been a hard-liner on supporting the advertising rights of tobacco companies, but Burtch Drake, president of the Four A's, implied (at least to me) that there are limits to his endurance. Tobacco advertising, he said, "has seriously challenged the credibility of the industry." He said Four A's would continue to defend the First Amendment rights of cigarettes, but "we will do so with our eyes, ears and minds carefully tuned to new developments." I say toss 'em to the wolves, Burtch, even if ANA continues to dig in its heels.
I'm not trying to start a feud, but I also noticed that Burtch was less than pleased about the lack of support ANA gave Four A's guidelines on ad consultants, and I read in the papers where ANA put a quick kibosh on Burtch's half-hearted proposal for a joint Four A's-ANA annual meeting.
I know I sound like a conspiracy theorist here, but was it more than a coincidence that Burtch called for a holding company to oversee organizations such as the Advertising Council, the National Advertising Review Council and a little-known body called the Advertising Education Foundation at the same time NARC President Wally O'Brien, a couple of days later, was saying that the industry's self-regulatory process was all but dead in the water?
Self-regulation, Wally told the Four A's meeting, is "beset by inertia and is in danger of becoming marginalized." The head of the Federal Trade Commission has said that national advertising is much more truthful than it was 20 years ago, thanks in large part to industry self-regulation. Yet NARC is funded not by the ad groups but by the Council of Better Business Bureaus.
Here's what I think is shaping up: Wally wants the ad groups to fund self-regulation. But where does the money come from? As it so happens, the Advertising Education Foundation, one of the groups Burtch wants to put under a holding company, has more money than all the other ad associations put together -- about $10 million.
Its money was raised by former agency executives Al Seaman and Gene Kummel, and its mandate is to provide stipends for visiting ad professors when they intern at corporations during the summer. But most companies pay the professors' salaries themselves, so AEF gets along easily on the interest from the $10 million nestegg.
By tapping into some of that AEF money, the ad industry could take over self-regulation funding (and a whole lot more).
So was Burtch's offhand suggestion about forming a holding company and Wally's call to arms on the self-regulation front the opening shot to pry loose some of that AEF stash?
My next question is: Who runs the holding company?