Philips, Lexus choices highlight the diminshed role of agencies

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Advertising agencies these days must feel like a baseball player caught in a rundown between bases. Either way they turn they're likely to be tagged out.

On the one hand, when Lexus goes shopping for a new identity it asks marketing consultants for help. On the other (and far more worrisome), when Philips Electronics selects an agency to lead a global marketing push, it picks not an ad agency but a media-buying agency.

So what's left for ad agencies? In both the Lexus and Philips cases, the ad agency will be handed the strategic direction for the brand and told to write the ads to implement the strategy. And the Philips media agency will also dictate what media to use.

How the mighty have fallen! It used to be that the creative department would come up with the strategy and distill the perfect positioning. The media department would buy whatever the creative people wanted (almost always lots and lots of TV advertising). With integrated marketing now finally taking hold, making TV ads may not be the key job. But ad agencies are stuck with the rap that that's all they know how to do, and clients are looking more seriously than ever for other solutions.

The importance of the Philips decision can't be overstated. "We try to help [the creative agencies] understand what the best communication channels are," said David Verklin, CEO of Carat International, the media agency in charge. "Once that's determined, we don't write the headlines."

So that's what ad agencies have become-a bunch of headline writers. Whatever happened to that close collaboration between client and ad agency, the partnership that endured and worked hard and successfully to build powerhouse brand names?

Now, it appears, ad agencies are trying to recreate those golden days of yesteryears. The World's Greatest Advertising Journal (that's us) reported last week that FCB, now a unit of the mighty Interpublic Group of Cos., will go back to calling itself Foote, Cone & Belding-after its founders, Emerson Foote, Fair-fax Cone and Don Belding.

One FCB guy said the name change will give the agency "instant heritage." That's the only kind of heritage many people in the business care about, I'm afraid.

And, anyway, who cares? When ad agencies had a voice, it was because ad-agency execs were colorful and charming and talented, and they were also not bashful. Now they're mostly cogs in a wheel, and they don't want to be reminded of the days when their bolder progenitors commanded the ear of corporate America.

As James Twitchell of the University of Florida reminded us last week, the big ad agencies used to run house ads in places like Fortune staking their claim to the big accounts of the day. He was talking about the 1920s and '30s. I remember great ads in the '60s by Benton & Bowles ("It's not creative unless it sells"); and "The man from Cunningham & Walsh," which showed a C&W account man working supermarket displays to get the feel of the retail market; and the Young & Rubicam "whole egg" series.

In the early '80s, J. Walter Thompson Co. spent about $1 million a year for three years in a row on two house campaigns. One emphasized client success stories and carried such whimsical headlines as "J. Walter Woof" for its Ken L Ration dog-food account, "J. Walter Kiss" for Close Up toothpaste and "J. Walter Pride" for its U.S. Marine Corps ads.

The other campaign, featuring a scorecard of TV screens, told how JWT had more commercials among the 25 most memorable than any other agency.

Burt Manning, JWT's CEO for many years, told me the agency at the time was at a low ebb "and needed to re-establish our strength." The series of ads helped bring Thompson back to where it was voted, in a 1985 Ad Age survey of ad directors, the best overall agency. "I guess advertising does pay," Y&R's Ed Ney told Burt.

But agencies aren't likely to advertise until they feel "an urgent need," as JWT did back then, Burt said.

I'd say the same conditions, for the entire agency business, are getting closer all the time.

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