Based on my own (dated) university experience, "advertising" does not belong in a [college] school of journalism! Remaining there dooms it to bastard-child status as an "unclean" endeavor. It should be moved, along with public relations (and any similar disciplines you can think of), into a commerce communications department and then placed in an environment where marketing and media studies are comfortably and proudly housed-and preferably at a graduate or senior class study level.
Advertising used to be where well-connected liberal arts majors with no marketable skills went to earn a living. Maybe it is time to make a semi-profession out of it and a proper education might just help.
Why accounting rules impact marketing
Re: "FASB explanations raise more questions"(Letters to the Editor, Viewpoint, AA, Sept. 9), in response to our letter "FASB change means pressure on agencies" (Viewpoint, AA, Aug. 12). Yes, there are some new things facing advertising and the advertising industry. Perhaps the things baffling letter writer H.E. McDonald are:
* The Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission's CEO/Chief Financial Officer Certification Rule, new Financial Accounting Standards Board/Emerging Issue Task Force accounting issues and guidance and a rather large portfolio of proposed legislation and accounting rules yet to be finalized. Some of the effects of the new issues, rules and legislation have already been seen in financial reports.
* Cannondale Associates estimates that the consumer package goods industry will reduce reported revenues by approximately 5% to 8%. Many large companies have already reduced reported revenues by $2 billion to $4 billion. AOL Time Warner has written off more than $54 billion in goodwill formerly charged to their merger.
* More than 900 CEOs and chief financial officers had to certify their financial statements last month under a temporary SEC rule, and the new Sarbanes-Oxley Act and now permanent SEC rules raise the bar even higher.
The point is that every line of every profit-and-loss statement will face new or renewed scrutiny. Many of the marketing tactics to boost revenues are no longer operative since they are now classified as a reduction in revenue (previously most companies charged them to the "selling, general and administrative" category as an expense).
Advertising was left as an expense in most instances by the new EITF Issues paper. But being classified as an "expense" versus a "reduction in revenue" is not in and of itself a "safe position." Marketing will be challenged in the future as it has not been in a long time. Consumer and trade promotion plus advertising will come under the corporate magnifying glass since a large portion of many companies' revenue stream is expended on marketing. It is only prudent to assume that these expenditures will be reviewed and that some form of metric or valuation will be placed on them.
Those responsible for marketing and advertising must prepare themselves for this potentially new environment.
Mr. McDonald appears even more baffled by the current state of advertising measurement. In 1997, Don Schultz co-authored a book on "measuring brand communication return-on-investment" for the Association of National Advertisers. It spells out exactly how to measure the incremental returns on advertising and other marketing elements.
Marketing mix modeling, as offered by Marketing Management Analytics, Information Resources Inc. and others, is currently being widely used to measure the impact of advertising investments by all types of organizations. Measurement of brand value and brand equity is widely used in all types of financial valuations of organizations. Its approaches were developed in the mid-1980s and are widely accepted around the world. We hope Mr. McDonald's bafflement represents only a minority view by advertising executives.
Professor of Integrated Marketing
Medill School of Journalism
Writers hit the target on `brand expression'
"Brand expression matters" (Viewpoint, AA, Sept. 30) nearly hits a bull's-eye as concerns how many marketers today view branding as an "indulgent exercise."
More than ever, marketers incorrectly see branding as just advertising with a cute (often times meaningless) slogan. It is also alarming that marketers have become increasingly myopic to the value and need for serious brand strategy development.
As Forum writers Julie Cucchi and Nin Glaister also correctly point out, brand identity work, if done effectively, will increase employee retention and productivity, ultimately influencing consumer interest and attachment to a brand. Employees who can articulate and "live into" their company's brand essence and positioning are still an organization's best marketing tools.
But one must not forget that "brand expression" must be based on a sound, inside-out brand strategy foundation that serves as the template for all tactical activities. A brand identity package is only as good as the strategy upon which it is based.
J. Elias Portnoy
Chief Brand Strategist
* In "Turn Signals" (The Ad Market, Sept. 23, P. 8)), the table "Billings movement in Aug. 2002 by agency company," from William Blair & Co., incorrectly listed a net loss of $22 million for Publicis Groupe. It was a $22 million net billings gain.