I have seldom, if ever, witnessed more aberrant business behavior than in the first two months of 1999, when Miller Brewing Co. reappoints its agency after wasting hundreds of millions of dollars on the worst advertising in the beer business and Mercedes-Benz fires its agency after investing hundreds of millions of dollars on the best advertising in the automobile business.
Miller's sales are in the toilet, where it's advertising belongs; Mercedes sales are soaring to new heights.
Nobody knows how its agency has somehow managed to hold onto the Miller account; some say the presenters of such simple-mindedness are descendants of Svengali, able to work their magic while their clients' eyes glaze over.
Everybody knows why Mercedes yanked its $100 million account. The man most closely associated with the business retired and in the eyes of the client the agency didn't have anybody worthy to succeed him.
How completely juvenile the ad business is. It's not enough to produce "powerful and effective advertising" -- in the words of the fired agency's chairman. What's most important is to hold the client's hand and let him know he's a very important, appreciated fellow.
The client said he never met the agency's new head guy (who subsequently left). So what? The account was being run by senior people and the creative was under the auspices of the chairman and chief creative officer. The results were outstanding: great advertising (of which there is not a lot) and great sales.
The problem is the CEO on the client side is either too involved in the advertising process or not involved enough.
One of the big complaints I've heard from agency people is that it's difficult to build relationships with client top management because the head guy isn't interested or is busy on other things. So he delegates the advertising oversight job to underlings, who often have their own agendas (such as getting a better job somewhere else).
The CEO walks a fine line here. As with other areas of the company, he delegates the job of running a division or department to his trusted lieutenants but he also demands certain agreed on results.
But that process doesn't seem to work in the advertising business. One of the problems is that it's harder to assess whether advertising is working because there are so many other variables (or at least there seem to be). So the head guy doesn't feel qualified to judge whether his ads are (1) any good or (2) effective since he probably didn't have any marketing experience on the way up the corporate ladder.
Ex-agency executive and now consultant Ken Olshan wrote me a while back that the most important issue in advertising today is top managements' lack of accountability to shareholders for the productivity of enormous media budgets. "It isn't that these senior officers don't care or aren't well meaning. I think the problem is ignorance, poor training and insecurity around things right-brained."
On the other extreme are CEOs who are way too involved in their company's advertising, to the point where they allow personal relationships (or non-relationships) to override superior results (or non-results).
This is what's happened at both Miller and Mercedes. The results at Miller were horrible -- sales inched up less than a percentage point after deep discounting. The results at Mercedes were outstanding -- forgeddabout "intention to buy" and other adspeak mumbo-jumbo; sales were up 60% to more than 210,000 units. That's all you need to know.
Both CEOs should only care about results. They were both involved in their companies' advertising to the point where they cared more about the dynamics of the process than they did about what the process delivered.
Some might say my views of these two situations are overly idealistic and even naive. The ad business has always been populated by great salesmen who built strong relationships with their clients and helped build their businesses into the giant companies they are now.
But equally strong were the CEOs that the agency heads dealt with. All that counted was whether you were able to move the merchandise. If you could, you and your client could play golf and go fishing together; if you couldn't, all the