But I submit that this time around, it's worse than usual. To put it bluntly, I believe that last year's dot-com advertising outburst did colossal damage to advertising's reputation among the nation's CEOs. The dot-com advertising was so pointless, so tasteless, so stupid that it shook the faith of corporate chieftains in the power of advertising for their own brands.
That's why advertising has hit the wall so suddenly. As one agency executive told our newspaper: "I've never seen an advertising environment so bad, with such a combination of client caution [and] zero new business activity."
It's totally amazing how gullible we all are. A year ago the Nasdaq was flying high, and we thought it would keep going up forever, fed by the tech and dot-com stocks whose lack of both a solid business plan and any hope of earnings was considered irrelevant. In the same way, dot-com advertising that made absolutely no sense and no sales point dominated the pages of newspapers and magazines and inundated the airwaves. We thought the old rules were dead. Stocks' underlying value no longer had to be based on earnings and advertising no longer had to generate sales. Advertising's job was to build overnight brands. The industry, deep down, knew this was an impossible task-but, as with the stock market, we wanted to believe. So we convinced ourselves the party would never end.
The ad agencies that were churning out this mess knew better, but their pretense was that it was being created by someone else. And they actually believed that the very stupidity of the dot-com renderings made them look good to their other clients by comparison.
In other words, they believed that we'd believe the dot-coms' ads were the concoction of some "bizarro world" where everything happened in an opposite way from our own experience. (Remember that episode of "Seinfeld" where Elaine meets three guys seemingly just like Jerry, George and Kramer but who conducted themselves in an uplifting and constructive manner, so unlike her old chums? The three bizarro world characters went to the library to read, and they were offended when Elaine took a jar of olives out of the refrigerator without asking.)
The dot-com disaster came at a time when other categories were not exactly producing stellar work, but the ad agency world even made a virtue out of that. At last year's American Association of Advertising Agen-cies conference in Bermuda, BBDO World-wide's Phil Dusenberry acknowledged that advertising output was pretty mediocre because "our high-pressure, hard-nosed, fiercely competitive, major league business awarded itself a time-out, a seventh inning stretch.
"And why not? The goods were rolling off the shelves. Jobs were going begging, but nobody else was. And let's be honest: Upstart dot-coms were flooding television with homemade funky, spunky, off-the-wall stuff that, for the most part, made our creative offerings look very professional, if not exactly sizzling."
So ad agencies wanted to have it both ways in those halcyon days. They wanted to get rich from that dot-com business pouring in over the transom, while pretending that someone else was doing all that awful work.
Now, a year later, why are we surprised that clients are cutting ad budgets with such vengeance? There never has been adequate evidence advertising was effective in boosting sales, but last year clients were treated to the spectacle of advertising that was not even designed to influence the sales process.
The Nasdaq has declined almost 3,000 points in the last year-to where it was in late 1998. Most analysts think it will be a long, painful process back. The same, I'm afraid, holds for advertising. The dot-com phenomenon wreaked tremendous harm beyond its own realm. And now advertising is going to have to earn the trust of decision-makers all over again.