New 4As Chairman Offers Plan for Change

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DANA POINT, Calif. ( -- Citing a litany of woes that continue to erode the earning power of advertising
Photo: Ritz-Carlton
4As Chairman Ken Kaess offered an action plan in his talk at the Ritz-Carlton, Laguna Niguel.
agencies, the new chairman of the American Association of Advertising Agencies on Friday said members had to invest more money and effort in understanding their customers and selling themselves.

Maddening paradox
In his first address as chairman of the 4As board of directors, Ken Kaess, president-CEO of DDB Worldwide, said the paradox of the current economic downtown was that "clients are paying us even less for the very marketing and consumer insights they need more than ever."

"Multiple assaults are being launched upon our business -- by the economy, ugly compensation realities, the mixed blessing of technological convergence, the commoditization of our product and, frankly, our fear that things can only get worse," Mr. Kaess told the gathering at the Ritz-Carlton, Laguna Niguel.

He offered equally stern assessments of how agencies as well as their clients are exacerbating the situation.

Quality of work
The good times of the '90s, he said, let agencies get away with "making a less-than-wonderful advertising product" that didn't always achieve what their clients need. The shortage of creative talent in agencies was another problem, he said.

On the other hand, he said, clients' sense of loyalty to their agencies "is disappearing even as clients scrabbling for consumer

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loyalty and brand share has driven [clients] to fits of frenzied price-cutting and brand-equity sapping promotional strategies."

Mr. Kaess pointed out that the advertising industry had somehow managed to make the services it sells "eminently resistable to clients."

"We've been unable to quantify [our] effectiveness. Unable to fight the tide of [our services'] depreciation in the marketplace. Unable in some instances to convince clients that anything beyond the physical attributes of a brand even exist," he said.

Suggested actions
To help change this, Mr. Kaess suggested that the 4As undertake a three-year campaign to improve the perceived value of what its members do.

He called for the trade group to:

  • Fund a "major research study" aimed at better quantifying the value and results of advertising.

  • Publish articles or books by highly credible third parties that detail advertising ideas and campaigns that "changed the course of a brand's history."

  • Conduct an annual survey of major advertising clients to determine how the advertising industry is perceived to be meeting or missing their expectations.

Pointing out that "we spend millions of dollars conducting consumer research," Mr. Kaess asked the crowd, "How much time and money do we spend trying to understand our primary customer -- our clients?"

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