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Traditional Ad Agencies Under Frontal Assault

Founded in 1917, the American Association of Advertising Agencies (AAAA) is the national trade association representing the advertising agency business in the United States. Its membership produces approximately 80 percent of the total advertising volume placed by agencies nationwide.

The AAAA membership is apparently under increasing critical attack, from intelligent consumers, demanding marketer customers and even some of their own employees. Here's the storyline, so far.

Steven Pearlstein says in his Washington Post column entitled 'What Happened to Creative Advertising?' -- "The advertising industry is having trouble figuring out whether these are the best of times or the worst of times. They are the worst of times because the business model on which the industry was built -- hefty profit margins for pitching mass products through mass media to mass markets -- is finally collapsing."

Pearlstein's follow-on column is equally blunt -- "Back in the era of mass products, mass markets and mass media, it didn't matter whether advertising was clever (Alka-Seltzer) or annoying (Charmin), or just plain boring (Chrysler, Ford, General Motors). If companies were willing to throw enough money at ads, buying enough 'gross rating points,' they could sell anything." -- "We simply bludgeoned consumers into submission," said Bob Isherwood, creative director at Saatchi & Saatchi.

In a recent Marketing magazine column entitled "Bullies and Brats" we get a first-hand account of what it's really like to work inside a typical advertising agency. When communications specialist Kirsten Chase became the account director for a mid-size agency's bread-and-butter client, she was stunned to witness toddler-style tantrums, prima donna behavior and morally fuzzy practices at the Toronto-based ad agency.

How did the advertising industry get themselves into this fine mess? The short answer -- they've evolved their dysfunctional business practices over many years, and therefore fixing their inherent organizational problems won't be easy.

In the meantime, CEOs of some of America's finest corporations -- with very significant advertising budgets -- have come to a troubling conclusion. They have tasked an internal executive with raising the bar of expectations and accountability for their ad spending, and this very same individual is a proud graduate of the broken ad agency system that they're being asked to police.

As more corporations discover that the ad agency business-oriented talent pool is really a mere talent puddle, we should expect further drastic changes that will have widespread repercussions. Completing the talent transfusion process will be both time consuming and painful, for all concerned parties. Like all wars, there will be casualties, and the ad agency's walking-wounded will be littered everywhere.

BTW, the dictionary description of Frontal Assault reads "it is often a commander's last resort when he has run out of strategies." Clearly, marketers must be relentless, as their CEOs demand proven results from their marketing investments. Hint: this is not a good time to propose more 'corporate image' or 'brand building' mass media advertising that is 'sure to win a creative award.'

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