'It's broken'

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Jim Stengel's harsh report card on the advertising industry's reaction to change added a powerful voice to a growing chorus of dissatisfaction with the traditional marketing model, which now seems sure to put the business at a tipping point.

"There must be-and is-life beyond the 30-second spot," the Procter & Gamble Co. Global Marketing Officer told the American Association of Advertising Agencies Media Conference in Orlando, Feb. 12. "But our systems still revolve around that. Today's marketing world is broken. ...We are still too dependent on marketing tactics that are not in touch with today's consumer."

Specifically, Mr. Stengel was grading the industry on its response to the famed call 10 years ago from former P&G Chairman-CEO Ed Artzt, for marketers to embrace and develop new media. He gave the business a C-, pointing out that although new media are now abundant, marketers and agencies aren't using or measuring them sufficiently.

But his address also tackled wider issues that have been reverberating around the business for some time, such as the failure of many to find new ways to market in the face of increasing consumer control of media, fragmentation and clutter, and the absence of a method of measurement to track holistic marketing approaches. (See "Cracks in the Foundation," AA, Dec. 8, 2003.)

"Everyone is dissatisfied with things as they are," Mr. Stengel said in an interview after his speech. "Part of why I'm doing what I'm doing is for the industry," he said, but he's also pushing to improve P&G. "For us, it is not good enough to be better than the direct competition," he said. "If you start measuring yourself against the Starbucks or the eBays of the world, then you have a different set of comparisons."

Bernhard Glock, manager-global media and communications, and Greg Ross, director-North American media are working on plans for P&G that include making media planning step one in marketing plans, determining where the company needs innovation and who its partners might be, Mr. Stengel said.

"All marketing should be permission marketing," Mr. Stengel said in his speech, and later pointed to P&G's trip to Cannes last year and its contest to pick a Super Bowl ad as efforts to make its media advertising something consumers want to watch.

`sense of urgency'

Measurement remains the basic problem in making TV and the rest of the media mix work better, Mr. Stengel said. "We don't look at each media the same way now," he said. "That's part of what's broken."

Mr. Stengel was not alone in his views. "There are great ideas out there that aren't used because they cannot be measured," said Andrew Jung, senior director-advertising and media services at Kellogg Co.

"I see a real sense of urgency," said Bob DeSena, director-relationship marketing for Masterfoods USA. "Most importantly, we need to adjust our attitudes and accept consumers already have moved on."

Scott Berg, director-marketing, Hewlett-Packard, said he looks to media agencies for measurement and metrics on return on investment. But a sticking point is who will own what's developed. "If I own it, I'll pay for it," he said. "But if an agency is developing it, and wants to use what's developed for other clients, then that's a discussion point."

Developing strategy and accountability are keys for media agencies whose work has otherwise been commoditized, said Page Thompson, CEO of Omnicom Group's OMD North America.

`it is insanity'

TV may have more advanced measurement than most media, but it's still not working, Mr. Thompson said. "It is ridiculous that year after year we rely on 5,000 people meters to tell us what works. It is insanity."

He raised the possibility of buying network time on a pay-for-performance basis, much as many marketers now do with interactive media.

While Mr. Stengel said the industry's focus on the "small issues" of pay and process was inhibiting progress, a recurrent theme among attendees was that marketer pressures on productivity and costs remain an impediment to innovation.

One response is for media shops to take calculated risks, said Mr. Jung. Another, said Mr. Thompson, is for them to charge for services they've given away in the past by unbundling work around sports sponsorships and entertainment marketing.

"It's always a good thing when P&G pours Starbucks in the Folgers cup-everyone listens," said Pete Blackshaw, a former P&G interactive brand manager who joined the company largely in response to Mr. Artzt's speech and is now chief marketing officer of online intelligence provider IntelliSeek. "This particular wake-up call hits long-overdue issues ... and that bodes extremely well for the entire ad industry."

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