The holding companies are effective at reducing cost with "back-office" efficiency. But in general, ad agencies have stopped doing consistently what icons of the industry [like David Ogilvy, Leo Burnett and Bill Bernbach] always did, which is figure out how to sell product by coming up with a big idea that emotionally connects with consumers in a creative way.
The media was a major success because it was a great facilitator of connecting product messages to consumers. People kept investing dollars because they got a good return, in terms of selling more product. When "Texaco Star Theater with Milton Berle" took off on NBC, it sold not only gasoline, but also TV sets themselves. The top shows had a 50 share-life was easy.
We all know that this simple media world is long gone as consumers have more media choices than anyone could have imagined in those days. While we as clients still love being on the Super Bowl and other top network programming, I have to step back and question the absurdity of paying double-digit increases for a dwindling audience.
The networks are maximizing some dollars in the short term, because there is less supply and greater demand-can't really blame them for that, but they're not providing business solutions as well as they once did.
For GM, success was followed by a period perhaps best described as myopia.
Myopia happens when you worry more about short-term profitability than about the ultimate value you provide for your customer. Believe me, once your customers migrate away from you, it's a long road back, because customers will soon actively look for other solutions. From the product standpoint, [GM has] come a long way, in a broad range of car and truck segments. We have a lot of strengths to build on in the marketplace. More people consider our vehicles than anyone else's products. And we have the highest loyalty in the industry, so if we can get someone in our product, we're confident they will keep coming back.
But if we are going to continue our positive marketplace momentum, we have to reach the people who won't consider a GM product. There are a lot them, too. And because we've been on a downward trend for so long, it is hard to get their attention to communicate the depth of change that's taking place.
Our research tells us that public perception of where GM is in quality lags far behind reality. We need to reach those people who have stopped listening to us, and whose perceptions of GM are out of step with what's really happening.
We have billions dollars of marketing money to help tell that story, but we're frankly lacking enough great ideas.
Because it's getting harder and harder to tell our story with traditional marketing methods.
We've put together a number of programs ourselves that invite people to rediscover GM. We're so confident in our products that we're inviting people to compare our vehicles against the competition, and we're making it easy for them to do so with the Auto Show in Motion program and the overnight Test Drive initiative, which lets consumers keep our vehicles overnight to see for themselves just how great our products are.
We spent over $15 million on a campaign to promote Test Drive, which was good news for CBS, Fox, NBC and A&E. But guess what? That $15 million is dwarfed by the amount of money we put into all the other components of Auto Show in Motion and Test Drive.
We have had thousands of people every month who have tested our products who otherwise wouldn't have, and that is producing thousands of incremental sales per month. The point is that we are moving hundreds of millions of dollars in incremental marketing spending to non-traditional programs.
get with the program
Frankly, that's money we'd rather spend with agencies and with media. After all, we're in the business of making and selling cars and trucks ... not creating events and new media opportunities. So, if you're on that small list of agencies or marketing services companies who provide real solutions for your clients that sell product-great, keep doing it. Just think bigger, and broader.
If you're not in that camp-and I would say, most agencies and most media companies are not-then you have to get there. You have to get there because that's where the dollars are going.
If you work in a media organization-you're enjoying good results right now.
But if you don't provide bigger solutions-like the kind that Coca-Cola's Steve Heyer asked for at Ad Age's Madison + Vine conference-then you are risking your future.
And that's because clients are going to continue creating their own marketing programs. If these start working, dollars and pathways will be gone for you. Remember the lesson of the GM story: it is a real challenge to win back a customer that you've lost.
So, why am I making all these comments? Ultimately, it's because I want to sell more cars and trucks. We have great vehicles-but a lot of people in this room and in this city don't know it.
We have some great agencies doing great work-but you, our agency partners, could get more of our money. And those of you in the media-there is money you're leaving on the table.
Some people are answering the challenge, like Modernista and Planworks, which helped get a Hummer into a video with Timbaland and Ms. Jade and put Hummer in many unique media venues, like on the cover of Variety. A cross section of agency and client teams helped get two of the new Cadillac models in the "Matrix Reloaded"-which reset the standard for a chase scene in a movie.
There are many other great examples of companies using great, non-traditional ideas to sell products, like BMW Films; like the terrific Mini-Cooper print ads with the cutouts and pop-ups; like the Saturn sheet metal ad.
understanding the core
When GM focused on how it could create the most inspiring, exciting, high-quality vehicles, we dominated.When the advertising industry was driven by leaders who focused on big ideas that connected with consumers' emotions, marketers willingly paid for the ideas. And the networks exploded because they provided great business solutions.
At the end of the day, all three success stories were based on understanding the core essence of their products: GM built vehicles that met customers' needs, and agencies and media companies helped find compelling ways to sell that product.
But ... to bring things back to [an earlier point]. Right now the agency conglomerates and the networks are still getting [business] ... but maybe that's because they're the only choice in town. But many have gotten soft and flabby-and there are a lot of people looking for an attractive alternative.
Right now, we have a lot of business solutions that I could compare to "Ralph's pretty-good grocery," out in Garrison Keillor's fictional town of Lake Wobegon. And we're paying too much for "pretty good" solutions. We need help to use our assets to craft great solutions.
I've got a blank check up here-it could be made out for $10 million, or $100 million, or more. I'd love to put "your company's name here," if you have the right ideas, the ones that provide us with outstanding business solutions and help us sell product.
A full transcript of Mr. Fraleigh's speech is available at Ad Age.com QwikFIND aao79o