AAF conference: Marketers focus on shift in power

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[Dallas] The American Advertising Federation's national conference last week put the focus squarely on the changing consumer in discussions that ranged from diversifying messages toward multicultural groups to resisting short-term promotional fixes.

"The power has shifted to consumers today," John Costello, exec VP-merchandising and marketing at Home Depot, told the assembled crowd of nearly 1,000. He cited increasing media choices and consumers' newfound ability to research choices, pricing and features online before they enter a store. "You have to use ads and marketing to focus on consumer needs and differentiate or die," he said. "Today you exercise leadership or die." He said today's retail marketing can't center only on merchandising or pricing but the total consumer "surround" experience.

Mr. Costello said retailers need be wary of the urge to react too quickly when ads don't produce immediate results. He said he receives data every morning at 7:30 a.m. about how well sales react to advertising, and has to battle the urge to change strategy for short-term gain.

Hispanic experts, too, said that one marketing approach doesn't fit all. They noted that Hispanics speak English sometimes and Spanish at other other times, so the days of "slapping together" Hispanic ads by translating English ones has passed.

stay in the game

They also warned marketers about dropping in and out of Hispanic advertising. "You have to be in the market at least three years," said Ruth Gaviria, director of Hispanic ventures for Meredith Corp., adding that as Hispanic advertising has become more sophisticated, ads have shifted from touting benefits to using lifestyle approaches.

In other panels:

* Stan Richards, principal of the Richards Group, gave an unusually vocal denunciation of agency mergers, saying they don't improve agency work. "I can't think of a single example where an agency's work got better after it was sold. Not one," said Mr. Richards, adding that he has been approached to sell his agency by all the holding groups except Dentsu.

* DDB Worldwide Chairman-CEO Keith Reinhard, who also chairs Business for Diplomatic Action, a group that is trying to improve the image of American abroad, formally announced the group's first product and a sponsor (AA, May 17). He said PepsiCo would sponsor the distribution of a passport-sized brochure called an "American Citizenship Guide" to 200,000 students who will be studying abroad.

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