After 1997, a vintage year for marketers and advertising people, 1998 arrived with an unfair burden: comparison to that wonderful year before. With the 4th of July now come and gone, 1998 is half over, and it's holding its own very nicely, thank you.
Of course, everyone with a business plan to meet can find reasons to fret as the ad world turns to back-to-school marketing, fall car-model launches, pricier pro football TV time, November election media blitzes and the unknowns of the holiday selling season. What goes up does come down, after all. The robust growth of the economy, and the ad budgets that help fuel the growth, will eventually slow. But not just yet. McCann-Erickson Worldwide forecaster Bob Coen says U.S. ad spending will grow 6.8% this year, barely behind 1997's 7% gain.
A better question is how has the marketing world used these good times. From this vantage point, these "good old days" are not breeding complacency; just the opposite. There's too much change going on out there, and that's good. Much of it is driven by the fact that modern marketing is so expensive, today's corporate top managements seem relentless in squeezing everyone in the marketing chain for new ideas, new ways to curb costs and new techniques to get more for the marketing dollar.
Are there worries? Sure. Strike-bound General Motors Corp. is pulling ads, PC sales are flat, network TV audience shares are down, big agencies fret about consultants and every ad medium wonders whether it can keep posting gains. So there's not much room for relaxation. But the first act of this question-mark year has been a good one, and the stage is set for a decent finish, too.
Big bang buys
Time inc. merged with Warner Communications in 1989, and the new company, Time Warner, absorbed Turner Broadcasting System in 1996. That's also the year Walt Disney Co. bought ABC, and the year Outdoor Systems bought Gannett Co.'s outdoor operations. This year, all those labors bore fruit.
The advertising world has been watching media consolidation take place ever since Time Warner was created, if not before. From the beginning the question has been, what will this do for advertisers? With the news last month of AT&T Corp.'s and Ford Motor Co.'s media deals with Disney and Outdoor Systems, respectively, the answer is coming through loud and clear.
Until now, AT&T VP-Marketing Communication Steve Graham told this publication, the media sold advertisers what they wanted to sell, rather than what an advertiser wanted to buy. With its four-year deal involving ABC and ESPN sports properties and televised events, valued at as much as $120 million, the telco giant is "changing the way we deal with partners," he said, with "value created . . . well beyond a media buy."
Ditto for Ford, which just teamed with Outdoor Systems for a multiyear deal worth more than $50 million for exclusive ad locations in prime markets-such as New York's Times Square-for all of its brands, including Jaguar and Mazda. Until now, said Ford's David Ropes, "we couldn't preplan" for this medium. At the same time, Ford signed a shorter-term deal with News Corp. that gives it exclusive sponsorship of TV specials on Fox and also vehicle placements within shows.
"The whole media landscape is changing," said an executive with Ford Motor Media, the dedicated buying unit at Ford agency J. Walter Thompson Co.
So there's now tangible evidence, finally, that media conglomeration can be good for the advertiser. In fact, maybe the table has turned. It now could be bad for the media-or at least those left out in the cold when these smart deals are done and such large amounts of money are off the table.