Charge Less, Be More Successful

Business Advice From 'The Book of Gossage'

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Did you ever stumble across a single sentence that totally focused your thinking, maybe even changed your mind? That happened to me recently.

A couple of days ago, I found an old dog-eared copy of "The Book of Gossage," which may be the best book ever written on advertising. Most importantly, it brings sanity back to an industry running at warp speed to stay ahead of itself. And it reminds you that great thinking transcends the trend of the moment, and that not all innovations grew out of the internet.

Howard Gossage is the guy that said, "Nobody reads ads. People read what interests them, and sometimes it's an ad." In the 1960s he's the guy that told the industry that they needed to quit talking in "advertisingese" and have conversations with people. Maybe Gossage's message crept into the mind of some social-media guru who shocked us with the idea that "it's all about the conversation."

Long before ROI became a buzzword, Gossage understood accountability and pioneered direct-response ads in magazines. He introduced Marshall McLuhan to the mainstream and spoke passionately about advertising's responsibility to the public.

What really blew me away while reading Gossage was maybe one of the simplest business models I have ever encountered. It's one sentence that hit me like a wave:

"Our agency does not believe in spending too much money for advertising. We try to keep budgets as low as we possibly can and to say what we do say in as interesting a manner as possible."
Think of all the clients that would beat a path to your door if you followed that philosophy. Imagine the creative clarity that you would discover if those words served as your business conscience.

There's also something subversive in that thought. Gossage's idea sounds like a sure-fire path to extinction, or at least a slow path to lower profits and the erosion of our best talent. After all, we need more money to hire even more talented people and develop more advanced marketing capabilities to fuel our growth. It's counterintuitive to believe that we can build a successful business by charging less -- not more -- for our services.

At least that 's how I first looked at the situation. You can also look at it another way. Imagine how clients would feel about an agency that tried to keep costs as low as possible while still doing the most interesting work. They might actually like and trust their agencies. It might make negotiations easier. It might diffuse any adversarial qualities that spring up in a relationship.

One of the big struggles of the day is how to manage pricing pressures. Many of us have written in this space about clients who want to pay less for not only traditional advertising but also for the full range of marketing services. This has created challenges for agencies that need to pay competitive salaries, retain top people and invest in their businesses. We've argued for the way we operate and for the value of our contributions. No matter how much we protest, the trend continues. Maybe Gossage offers a way out.

It's a gamble, and it comes with risks. The downside is that you might just make less money and go out of business. The upside is that clients might reward you with a larger share of their marketing budget, allowing for growth and profitability all around. They might seek you out without costly reviews and the need to invest in spec creative. They might be more willing to understand your business problems. Still, there's no guarantee. But you never know, it might just work.

Personally, I like the fact that it's a principled way to conduct business. At a time when it's a buyer's market, Gossage provides a strategy that lets agencies control their own destiny, or at least maintain their pride.

As a caveat, it's worth noting that you can take any strategy too far. In the late 1950s, Volkswagen approached Gossage to help advertise its VW Beetle. He told them that the car was great and didn't need any advertising. The account went to Doyle Dayne Bernbach who developed the "Think Small" campaign. The rest is history.

Phil Johnson is CEO of PJA Advertising & Marketing with offices in Cambridge and San Francisco. Follow Phil on Twitter: @philjohnson
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