Agencies press get-global plans but clients face local realities

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There was a telling line in our Feb. 7 story on how independently-owned agencies are gearing up to sell out in the wake of the Publicis- Fallon McElligott deal. When a holdout agency finally succumbs, one skeptic told us, "they say they did it because clients need an international network."

Indeed, The Wall Street Journal, in reporting on the Fallon acquisition, said the agency needed a global presence to serve its clients. "Nobody can hire us on a global basis," Pat Fallon told the Journal.

Whether Publicis simply wants to beef up its U.S. business or intends to spread the Fallon name far and wide will be played out in the next few years. But the times may already be changing, and the need to take the same product around the world, propelled by the same ads and handled by the same agency, may be on the wane.

There's no denying a one-size-fits-all approach to global marketing is cheaper and more efficient. That's why Unilever is drastically paring its brand roster-to have the resources to push its strong brands around the world.

But the trade talks in Seattle and Davos showed the world is not a tidy place. Third world nations resent labor union and environmental group efforts to impose industrial world standards on them in the name of protecting poor people. These forces of both the right and left, said Mexico's president, are trying "to save the people of developing countries from development." He called them proponents of "globalphobia."

It could be that consumers in third world countries don't want world brands imposed on them, either. Maybe they view the big international marketers in the same light as the trade unionists and environmentalists, those evangelistic preachers of globalphobia.

More than a few consumer goods companies have encountered a few speed bumps lately. Growth has slowed, and what worked before isn't working now. Part of the problem is that the balance of power has shifted to the U.S. retailer, but I am becoming increasingly convinced another part of the problem is that the marketers' famous brands aren't automatically being accepted with open arms across the world.

Coca-Cola's new boss, Douglas Daft, is not at all convinced you can force Coke down the throats of consumers everywhere in the world. His call to arms: "Think local, act local." Mr. Daft, an Australian, has had plenty of overseas experience; he headed up Coca-Cola's business in Japan, China, Indonesia and elsewhere in Asia.

Mr. Daft's way of doing things is to allow local people to call the shots. "To me it was so natural and logical," Mr. Daft told The New York Times, to let local managers make decisions on products, advertising and other areas heretofore controlled by Atlanta. "It's something I've always lived by." Coke already sells Thums Up cola in India and Inca cola in Peru, and has a stable of 200 brands in Japan from which to draw from in other parts of the world.

As the Times stated: "Coke has had to come to terms with a conflicting reality. In many parts of the world, consumers have become pickier, more penny-wise, or a little more nationalistic, and they are spending more of their money on local drinks whose flavors are not part of the Coca-Cola lineup."

Coke is not alone in this harsh reality. Gillette has struggled abroad. It touted its Mach 3 shaving system as a big success in the U.S., but I can't imagine the premium-price product is a smash everywhere. Ditto its other shaving products, such as Braun.

There's a sea change coming in the way U.S. marketers peddle their wares across the world. If the most ubiquitous brand of all, Coca-Cola, is running into consumer resistance, shouldn't McDonald's and Wal-Mart reassess expansion plans (I read Wal-Mart already is doing so in South America, catering more to local tastes)?

If cookie-cutter advertising and products can no longer be foisted on consumers in other countries, the need for marketers to deal with agency networks diminishes. Of course, agencies will always push networks on clients as a way to avoid conflicts, and that's probably what's motivating the Publicis-Fallon combination.

Time is running out for any other advantages.

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