But, unlike the song by R.E.M., not too many business people will admit to "feeling fine." That's because the changes that are transforming the economic landscape-and the livelihoods of marketers and agencies alike-are more profound and lasting than many would care to admit.
For the past decade and a half, companies in every industry have obsessively devoted themselves to managing the supply sides of their businesses, from man-ufacturing through distribution and pricing. Top man-agers and CEOs, along with the best minds in academia and consulting, have worked together to drive enormous improvements in productivity. But opportunities and ideas to drive incremental growth are drying up. We're seeing diminishing returns and, as the '90s draw to a close, so will the viability of this strategy. Increasingly, companies will be forced to focus on the top line, to drive consumer demand and volume to achieve sustained profitable growth.
RELYING ON MARKETING SIDE
Where will they turn for wisdom on the demand side of the equation? Not to management consultants or process gurus. To their brands. To their marketing partners. For a hundred years, we've professed to be the experts at selling. If we can live up to that billing, then this could be our moment: the dawn of a golden age for commercial communications.
The problem (and a far from trivial one) is that driving demand is harder than ever before. There's overcapacity in industry after industry. It's no longer enough to dump products into the market and use mass media to tout them. Consumers have won the 8,000-year war with manufacturers-for keeps. And the pace of change in the world of media is fast approaching chaos. It is, indeed, the end of the world as we know it.
Which is actually a very good thing-for those who understand the rules that govern our existence in this new world. Those who get it that traditional, transaction marketing won't buy you long-term survival. That it's about relationships; about brands, not trademarks. For the foreseeable future (or any future that I can foresee) marketing will be all about getting brands and customers together, in a relationship that's healthy and productive for both parties.
So, Rule No. 1 in the new world is: Invest in knowledge about brands.
Remember, the old rules don't work. Much of what you thought you knew about managing and growing brands is about as useful as the old Selectric I learned to type on.
$20 MIL PUT INTO DATABASE
At Young & Rubicam, during the past four years, we've put $20 million where our mouth is. Our BrandAsset Valuator is the most comprehensive global database of consumer perceptions of brands. It's taught us a great deal about specific brands in specific geographies. But, more important, it's given us unique insights into how brands are built. Into the importance of relevance and differentiation for brands that drive profitable business growth. Into the fact that, while products may come and go, a brand can live on in perpetuity.
Rule No. 2 regards media. In a relationship-driven world, the key ingredient to successful media will be interactivity. By which I don't just mean technology and the "new media." Interactivity in the sense that each individual consumer must have richer, more involving interactions with all brands of media, whether analog or digital.
In today's complex world, media companies are under tremendous strain. Fragmentation has undercut their audience base. Consolidation is rampant. Marketers and agencies are wielding their clout like never before. But efficiency is not the issue. We should be reaching out to the media, innovating and working with them to alter the qualitative experience consumers have with their brands. In effect, bolstering the effectiveness of media. More than ever, matching consumers with media is a creative act. The ability to listen is the greatest communication skill. That's why the benefits of interactivity-in any medium-will win the day.
Rule No. 3 may seem like a truism: Creativity will continue to be key in breaking through an increasingly cluttered environment and reaching an increasingly sophisticated consumer. Creativity is the ultimate lever with which we will continue to turn marketing insight and knowledge about brands into business results.
UNDERSTAND THE BRAND
Of course, creativity is one of those words that means very different things to different people. I believe the definition of creativity that will apply in the future will involve far more than just getting your campaign noticed or generating awareness. Creativity will have to be rooted in a deep understanding of the brand and its needs. It will have to remind consumers of something fundamental and gratifying about their relationship with a brand. And it will have to take into account all the ways in which consumers get information.
Which brings me to Rule No. 4: If you're still thinking solely in 30-second time increments, your success in the marketplace will likely be as short-lived. Traditional TV advertising will remain an integral part of any marketing effort. But we must have multiple communications pathways at our dispos-al-so as to find the most effective route to the consumer; so as to deliver the right message, in the right format, at the right time.
The importance of this rule is so evident to us that we recently created a partnership that strengthens the links between two of our largest operating units: Y&R Advertising and Wunderman Cato Johnson. By more fundamentally aligning our capabilities with our clients' business objectives, we ensure that the efforts of these two fine companies, and those of all Young & Rubicam Inc. agencies, are entirely driven by the needs of the brands we manage.
I'll wrap up with Rule No. 5: Become an aggressive supporter of measurement. I'm not a philosopher, but if I were, I'd tell you that a tree falling in the forest when no one's around doesn't make any sound. In today's world, if you can't measure it, it doesn't exist.
But if you can measure the results that you are helping to achieve, then structure your compensation so that you share in the huge value you are delivering. Why should we get paid for just showing up to play when showing up is nowhere near enough in the brutally competitive business environment we face? Incentive-based compensation means risks and commensurate compensation, for agency and client alike. Of course, accountability scares some people. Yet it is the lens through which client and agency can maintain the proper focus on the truly important business issues. Accountability is also the only argument in support of that old adage about marketing communications being an investment not an expense.
A BUSINESS OF IDEAS
More than at any time in my career, ours is becoming purely a business of ideas. At the end of the day, we don't deliver ads, or direct mail pieces, or PR and corporate identity programs. We deliver results. That is our product. And that's why we need to understand these five important new rules of engagement. Why we need to be more client-centric than ever. Why we need to grow in our capacity to counsel clients on the core business strategies that are inextricably bound to their brand strategies.
The stakes have never been higher. We can step up and play a major role in the world of business or be relegated to a fleeting cameo appearance and a wistful longing for what was. I'm betting on a bright future in the new world.