WHY NOT ADMIT IT? POOR WORK COSTS ADVERTISING CEO SUPPORT

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The value of advertising, in the eyes of the CEOs who spend the money, enters the new year at a low ebb.

Corporate chieftains don't believe in advertising because they don't understand it; because too much advertising is bad or off-target; because it's too difficult to evaluate; because ad agencies don't have adequate talent to solve marketing problems; and because there are more productive ways to reach consumers.

That's quite a laundry list of indictments, I grant you. I wrote about most of them last year, and now the problem is coming home to roost.

I got a call the other day from a marketing honcho who took issue with one of my comments that his company didn't know how to tell if its ads worked. Yet he admitted the company was about to allocate big dough to try to determine if consumers react -- and interact -- with print advertising in different ways than with TV commercials. He's got his own theory (as do we all) but he's looking for corroboration.

If marketers don't have the answers to basic questions like this one, why should top executives accept on faith alone assurances that their ad budgets are being well spent? That's not the way they evaluate any other major expenditure.

Exacerbating the problem is the fact some agencies try to sell clients a bill of goods -- and clients are too willing to go along.

After writing about the worst-case examples of bad advertising, I received a letter from an agency exec who said the work was about "hubris and self-indulgence. It offends me terribly to have us part of the `same bunch of agencies.' Sadly, I cannot go on record. Doing so will be taken negatively as sour grapes, competitive harrassment, kicking the little guys and the like."

Well, maybe it's time to go on the record, to speak out against lousy advertising and the charlatans who champion it. I get the feeling there's a lot of resentment building out there toward this kind of mindless advertising, and I predict that during 1999 heated discussion will bubble to the surface.

But marketers take issue with agencies on a much broader front. In a survey of 50 big companies that spent more than $10 billion on advertising last year, half said traditional full-service ad agencies are obsolete. The survey was undertaken for USA Today by executive recruiter and management consultant Gundersen Partners.

"Marketers say they're frustrated by agencies' loss of focus and a dearth of talent, particularly among account managers, who they say lack the ability to develop sound marketing strategies for the brands they advertise," USA Today reported.

If agencies can't cope with marketing strategies, neither can many CEOs. According to data collected by Forbes among 800 CEOs, only 6.6% of them have arrived with a marketing background.

So if sales go down their response is to change agencies.

"It's difficult to understand why CEOs can't understand that their imperative to grow their own consumer franchises vigorously is importantly linked to their own future tenure and compensation packages," consultant Murray Hillman wrote me the other day.

A handful of CEOs are taking control of the marketing function but aren't relying on advertising. They're getting face to face with their customers and building their own distribution networks. And advertising, as I wrote last summer, "has been relegated to icing-on-the-cake status."

You've heard me harp on this theme for many years. As a matter of fact, last year was the 20th year I've written a weekly column, first for Crain's Chicago Business and later Ad Age. So from now on you won't have me to kick around on a weekly basis. I'm happy to announce I'm turning over this space every other week to our great young editor, Scott Donaton, who, I'm sure, will write about other