Increasingly, decision-making is occurring on the regional level, say the majority of respondents to a groundbreaking survey of international advertising decision-makers sponsored by Advertising Age International and conducted this spring by New City, N.Y.-based SIS International Research.
This telephone survey, the first of its kind, studied 158 respondents and has a margin of error of two percentage points. The survey found that the trend toward regional decision-making manifests itself in everything from the advertising concept and funding to media placement. Significantly, the embrace of regional decision-making parallels new developments in regional media, particularly TV.
In effect, this means that marketers consider single-country decision-making too local, preferring to go the regional route-except, that is, for the automotive industry and consumer products.
Across all industries surveyed-airlines, automotive, consumer products, high tech/telecommunications, hotels and luxury goods-there is a desire to project a global theme. Yet, most international marketers significantly empower their regional or individual marketing heads when it comes to budgetary decision-making.
The old adage, "think globally, act locally" seems to be holding true-with a slight revision: "think globally, but act regionally."
"The regional offices have total autonomy," said John Masters, marketing director in the Staines, England, office of Lotus Development Corp. and one of the survey respondents. "We use mostly print media for advertising purposes. And each regional office will decide the most suitable individual titles [for ad campaigns]. The money is there for each office to use it as it sees fit."
"A primary concern of advertising and marketing directors is in creating a consistent global marketing theme while appealing to a very diverse mix of marketers with differing needs and cultures," said Jessica Saban, research manager at SIS International. Analyzing the data results, she noted that "no one method of advertising coordination is dominant. Corporations utilize different approaches to advertising worldwide products and services in budget allocations, campaign development and the role of worldwide headquarters."
More than 50% of respondents indicate their companies' worldwide headquarters plays a dominant role in determining their international advertising message. A full 27% said their headquarters determines the message so it is consistent worldwide, while 37% recommend a major theme that can be adapted for local areas. Only 27% allow each region to determine its own messages.
Conversely, according to respondents, only 20% of their headquarters offices control the budget directly. A higher percentage, 28%, said each individual market has a different strategy with a different means of funding advertising budgets.
For any given brand, the international ad campaign, according to respondents, is designed to run either market-by-market (37%), regionally (30%), worldwide (28%) or a combination of all three (5%).
At Kenya Airlines, John Muthuri Makathimo, superintendent of advertising and publicity in Nairobi, Kenya, said regional managers, some based in Australia, London and Rome, are responsible for determining which medium is most appropriate for local needs. However, to standardize the corporate image at home and abroad, he said, managers refer to a corporate manual.
"We've just undergone a change in [brand] image because we are on the threshold of privatization," added Mr. Makathimo. For this reason, the airline is launching its first TV campaign in six years, starting this month. "It is a long-term corporate campaign that will run for the current financial year. Even if we launch new ones in the meantime, they will run alongside this one." Kenya Airlines advertises mainly in national newspapers and direct mail.
The importance of global images is reinforced by another survey respondent, Bob Austin, director of marketing communications at Volvo Cars of North America, Rockleigh, N.J., in evaluating a global advertising campaign for the first time.
"What we will try to do is develop a truly global campaign and test it to see if the economies through centralizing production and media will outweigh any individual drawbacks because of cultural differences," he said.
Anders Hesselbom, manager-communications, Volvo, Goteborg, Sweden, noted that the company has run a mix of local and worldwide advertising, but regional ads have been "particularly heavy in southeast Asia."
Advertising strategies are, amazingly, being re-examined-for the most part-although Nicolas Ricat, VP-marketing at Sofitel International, Paris, said his hotel chain conducts a mixture of local and corporate campaigns, adding, "I don't see it changing anytime soon."
Survey results indicate nearly 40% of the respondents believe international advertising decisions-in terms of running campaigns globally or locally-will change in the next two years. The industries that have the largest expectation for change are, not surprisingly, the high-tech and telecommunications sectors.
Those respondents who expect change in international advertising decision-making see themselves becoming more globalized. Still, the respondents who expect to have more regional input in decision-making see that input occurring in the areas of campaign development, concept development and translation of ads.
One of the more astounding instances of worldwide headquarters' influence is on media choices. One-third of the respondents report that their headquarters are involved in media placements. On the other hand, ad agencies only influence media placement in one-fifth of the cases.
The international media choices are changing so dramatically that the individual countries or markets must be heavily involved in media choices-and our study shows 69% are.
But overall, only 38% of the respondents expect their media choices to change in the next two years. When categorized by media type, survey respondents expect more changes in the use of:
Pan-regional business press (25%)
Pan-regional TV (32%)
Local newspapers (22%)
Local TV (32%)
National publications (33%)
Outdoor advertising (18%)
Overall, respondents reflect a growing sophistication in the variety of media they use, increased reliance on their local or regional offices and a willingness to use more local-language media.
Also contributing to this story: Juliana Korenteng, Bruce Crumley and Judann Pollack.