'Never mind Tivo and Replay. They can take out the commercials altogether. The whole issue is that the average Joe sitting there on the sofa watching the Zenith will whisk it away if something offends him. I think thatís why creativity is still around.'



Stuart Elliott on
the state of the ad biz

NY Times columnist opines on range of issues

By Tim McHale

In the field of American advertising, Stuart Elliott is a leading authority through his column in The New York Times. Each day thousands of national and global marketers get their first advertising news of the day reading Stuart Elliott. Elliott, a Brooklyn native who started in journalism using a manual typewriter, covers the most subjective of all industries with a straightforward objectivity that has earned him the respect of both offline and online advertisers. Stuart's coverage of the changes on Madison Avenue and what remains of Silicon Alley is a daunting task, as his daily columns must keep pace with an industry undergoing a creative, media and technological makeover. His views on these events are sought after by major networks like A&E's 'Biography,' as well as ABC News when it reports on the ad business. The editors of Media Life asked me to chat with Stuart about the state of the advertising industry. Stuart and I met for breakfast at 44, the restaurant inside Ian Shraegerís Royalton Hotel, just a block or so from the Times. Because Elliott is normally the interviewer, not the interviewee, it was great fun once again to turn the tables on "the pundit's pundit" and ask Stuart for his view on what's happening in this seemingly shrinking media business.

When I think about the state of the industry, I find that in the online space, there is a very strong sense of community.

    I think thatís different as opposed to the general agency types. With your folks, in the beginning you said, "Weíre all in this together and there is enough business to go around for everybody."
    The pie was growing so fast that anybody who was coming aboard was welcome, whereas I think that these other guys think of it as a zero sum game.
    In the traditional agency world, they donít think of it as, "Hey, letís look at things we can do together to make the business grow for all of us." They think of it as "if I win this account, you lose it and vice versa."
    I think thatís part of the reason why itís very hard for them to do anything on a cooperative basis.

At the same time we are clearly not seeing security. Right now weíre huddling together because we have to. In the early days there were so many trade shows because we wanted to share case studies and learn as much as we could.

    Because nobody knew each other. Everyone was trying to get to know each other too.

This is an interesting statistic. In the second quarter of 2000, Jupiter had $11 million dollars in conference revenue. In Q2 of 2001 it had less than $1 million, over an 80 percent drop in conference revenue vs. the year before. In the year 2000 everyone was on a learning curve. Everyone was really excited: "I need to go to this conference."

    Now everyone wants to hunker down and wait for the storm to blow over. Itís scary.

Where do you see the state of creativity these days? What is intrusive today?

   I donít think itís the same as in past recessions when suddenly the pendulum swung all the way back to the hard sell and all the creativity was drained out of the business because people thought it was too frivolous and didnít sell product.
    I think that the entertainment component is so built-in now because of that perception that you have to have advertising that is entertaining in some fashion or people are going to get up and change the channel or not click on whatever it is.
    I think that makes a big difference now.
    There's the idea that in tough economic times people swing back to a hard sell and facts and people standing there in lab coats trying to tell you the 14 reasons why you should buy this detergent.
   I donít think we are seeing that.

Why not?

I think itís because there is a widespread belief that if you give people boring commercials theyíre going to take that damn clicker and change the channel, make them disappear. People are enabled technologically now to zap an ad.

Like Tivo and Replay?

  Never mind Tivo and Replay.
   They can take out the commercials altogether. The whole issue is that the average Joe sitting there on the sofa watching the Zenith will whisk it away if something offends him.
    I think thatís why creativity is still around.
    Right now itís in a very odd period. You have all the dot.coms collapsed and all that gibberish frat boy stuff sort of disappeared.
    Yet at the same time nothing has come around to replace it. And with niche marketing you have 100 different trends going on at the same time. I mean, there can be a creative trend in primetime that is missing from ads for younger consumers and is completely missing from ads on the internet. You have a whole bunch of different things going on at once.

It sounds like youíre feeling positive that itís not a creative wasteland.

The opportunity is there for people to do something again, but within the larger context of it.
    Itís selling the darn stuff. That always has to be part of it. Thatís always the problem. How do you keep it entertaining and selling?
    Obviously, one way is to make the entertainment about the product. Thatís very tricky. With account planning and every other new tool that people have, itís just as tricky as it always was because again, you know, consumers are skeptical now, jaded.
    They have seen it all, done it all, had it all, know it all. Itís not like 40 years ago when all you had to say was, "Our detergent is new, it protects colors" and everybody would go stampede to the store to buy it.

Where do you see the state of media planning? Has that moved on from 10 years ago?

  I donít know. I donít know how to answer that one.
    Everything has moved on from 10 years ago. You guys are big fans of the "get them where they are" theory, where you track the consumers during the course of the day and figure out how to intersect with them, I guess.
    All of that is getting more and more skillful and more and more "scientific" in terms of finding people and hitting them where they are and aiming specifically at whom you want and not wasting the money on people you donít.

Do you see any blurring of lines between church and state, advertorial and messaging built-in to content?

   Thatís one of the biggest trends right now. Advertising gets thought of as entertainment. That takes down some of the wall that has separated advertising from entertainment.
    Thatís one of the ways people are going to be skeptical and reluctant to look at paid messages. You want to try and imbed that message in something they are willing to read or watch, the idea being that you are making it a little easier for your selling to work.
    But you know every time you turn around there is some new thing with product placement. Or TV shows with sponsor participation.
    There is a show "No Boundaries" that is going to be on the WB sponsored by Ford. Their slogan and their cars and SUVs are going to be in the show each week.
    There is all that kind of stuff and there is more and more of it all the time.
    "Survivor" is another one with all those sponsors. Their products are in the show and part of the challenges and rewards and all of that.
    I think you are only going to see more of that.
    Of course, there's a point where consumers really get so sick of it that they push back. I think right now consumers are still assessing it and deciding whether it is something that they like or not.
    But obviously the danger with this stuff is that the more you compromise the quality or the integrity of the content, the more you run the risk of making it worthless and queuing the consumers so that they canít believe anything.
    If consumers think that they canít get away from advertising anywhere, I think eventually all advertising is going to be suspect.
    A sort of rhythm has been built up over the decades that, "Yes I will watch a commercial, but I want to see some programs too. Yes, I will read your ad but I want to see some articles also."
    If everything is nothing but pushing and pushing and selling and selling, you are sort of breaking that covenant with the consumer.
    I donít think that is going to be good in the long term because the content is why people are watching or reading--NOT to see more ads.
    And I think some people lose sight of that in their zeal to try to integrate the ad messages into the content.
    What do you think? Can I interview you? Is that allowed?

Well, itís a media strategistís job to push the boundaries and to find new and innovative ways to do things versus dusting off a flow chart and upping the CPM. That said, I was in a meeting a couple of months ago where a potential client was talking about how one of her colleagues got a cease-and-desist order from the FDA and was holding it up like "Yeah, we were pushing the limit.

  Itís a badge of honor.
   They will probably get a bonus for it, but thatís the short-term thinking thatís so popular now. Letís get away with what we can while we can and to hell with the next quarter, the hell with next year when you have totally ruined the reputation of the brand cause anybody with a half a brain wouldíve read in the paper about the cease-and-desist order.
    Hurray for that.
    What kind of long-term attitude is that?
    Nobody cares. They will be on another account six months from now. What do they care? The marketing guy will be in another company flogging another pill or another coffee six months from now. He doesnít care either.

Let me play devilís advocate. Arenít we judged by our ability to push the envelope?

   No you are not!
    You are judged on your ability to sell. I think thatís part of the problem. In a desperate effort to get people to buy stuff, you guys think you are being judged by your ability to break the rules, push the boundaries, test the limits and all that.
    From my perspective I donít think that is always right. That is not always going to work out, particularly in the long-term, because whatever you achieve in the short term, you undermine the credibility of the media vehicles that you are using.
    In the long run that is not good. I certainly donít doubt that I could be wrong and that there is, sort of, you know, the least objectionable; the theory of the downward spiral of everything, that the value of content in the media is just as valuable as anything these days, which is to say that it is all made of tin, sparkles and sandpaper or whatever, fake sandpaper.
    I donít think itís good if people pick up a copy of Time magazine and see the iMac on the cover and say, "ooooÖthis is so cool," and then it turns out that there was some little arrangement, a back-door arrangement, between the company and the magazine, where they hold the release of the magazine so the CEO can stand on a stage at some conference or the annual meeting of a company and show it to everybody.
     I donít think thatís good. I mean, maybe 90 percent of the people didnít hear about it or didnít understand what it meant or didnít care, they were too busy doing what they were doing.
    But you know, for that 10 percent that noticed it and thought about it, maybe they are going to think less of Time magazine, and what good does that do Apple or anybody else to undermine the credibility of Time magazine as an editorial product.
    I donít think people are going to believe the ads. I donít think people are going to say, "Oh, well you know, their editorial content is suspect, but every word of every ad must be true."
    They go down or they go up together.
    The media and the advertisers are partners in a way, reluctant ones to be sure, and with different agendas.
    So when you push the limits of what the other one is capable of doing, in the long run I donít see how thatís going to pay off.

Letís talk about the long run. CRM is a big buzzword. What does it mean to you?

  Thatís especially the reason why you should be thinking about the long-term because all anybody is talking about now is CRM (Customer Relationship Management) and the C and the R in CRM is by definition long-term, talking about the long-term, building a bond.
    Itís kind of like a personal relationship.
    How do you build a relationship with somebody if you are always going to be cheating on him or her? Oh, I am going to test the limits, itís like you go up and say, "I love you darling. I am going to have Valentineís Day with you. Letís plan this Valentineís Day dinner."
    But then you say to yourself: Let me see if I can get away with having drinks beforehand with my little honey on the side.
    Thatís really what you are trying to do!
     How does that build a relationship if you are trying to get away with something on the side. Itís like cheating while you're married or something. I mean, I am sure you can get away with it. You can do it all the time.
    But in the end what value does either relationship have? I love you, I love you, I love you, but you know, itís 6 oíclock and I now have to go see my girlfriend or boyfriend or whatever.
    I just donít agree with this obsession with customer relationship management when you are basically telling these people, "I just want to use you for the short term. I just want to use you and throw you away. Bleed out what I can right this minute and get rid of you."
    And at the same time itís, "I want to put you on a list and I want to send you messages and I want to give you little treats and reinforce our ties with each other."
    Itís like smacking someone across the face and then saying, "Oh, hi! Will you love me now?"
    If they are masochists, maybe youíve got them, but there arenít a lot of masochists out there.
    So most consumers are going to walk away saying, "The hell with this, I donít need this."

So what you are saying is to focus on the basics.

  Yes, but again itís all different.
   The basics now are very different than 10 or 20 years ago, much less 40 or 50 years ago.
    I mean the basics are still the same thing, but within the context of niche marketing and the idea that consumers are much, much harder to woo now.
    Products have to have personalities developed and there has to be, I think, an expectation at least that the product is as good as anything else on the market, if not better.
    I donít think you are going to make people buy a lovable brand thatís not going to clean. You know, you canít make a detergent lovable and have people buy it if it doesnít clean my clothes. It has to work as well as Tide, if not better, in order for people to buy it.
    Look at Tide, even they have to work 10 times as hard as they used to, to get people to buy Tide, and it is acknowledged by everybody as the most effective product in the category.

Do you think that you can be breakthrough and not cross any ethical boundaries?

Yes! Absolutely!
   I mean itís harder. You have to work a little harder at it by doing your homework and researching to know the consumer.
There is always the possibility that you can do all of that and itís still not going to work because it is harder to reach the consumer and itís harder to get attention.
    It is entirely possible that if you do it "the right way," itís still not going to work.
    On the other hand, at least you havenít undermined the credibility of either you or the media that you are trying to use.

How about magazines like Brides or Popular Photography?

  Those are special interest magazines.
   I think the consumer brings to those magazines a different mind frame.
   But I still think even if you buy a magazine for the advertising as much as for the articles, that doesnít give permission to undermine the credibility of the editorial.
    In fact, I think the editorial credibility is even more important in trade magazines.
    I think when a magazine starts to futz around with a special advertising section or special promotional feature--and then integrates products into articles and doesn't label things and doesnít make it clear what is editorial and what is advertising--that itís worse in a magazine like that.
    Because, again, itís not The New Yorker. Itís not the Atlantic Monthly.
    With these publications there is more of a need to be straightforward with the reader because youíve got somebody there who is convinced that he or she is going to buy something.
    In the other place you have to do all this banging on the head to get them to think about you. Here they are coming to you with the "right frame of mind," and itís even worse if you try to trick them or push the envelope to the point where you are undermining the separation of church and state.

But one could also make the argument that you are making it more convenient for them to make a purchase.

 Thatís true. We are all in the business to make profit! Look, itís a capitalistic society. This is all being done within the framework of capitalism.
    But again, I donít think it benefits anybody to undermine the credibility or the basic objectivity of the media.
    Consumers are now to the point where they have so many choices that if they donít like what you are doing, they are going to go away.
    Not reading the newspaper is an option now.
    Twenty years ago, 30 years ago, if you said, "I donít read the paper," if you were any kind of professional, white-collar person, you might as well have rolled yourself into a room in your basement and that was the end of it.
   No one would be calling you. You wouldíve basically been freezing yourself out of your livelihood or your friends.
   Now there are millions of people out there who donít read the paper, who donít know whatís going on. Nobody looks down on them because they donít do it either.
   If people who are camera buffs keep finding that every article in Popular Photography is a fake and sponsored by advertisers and not indicated as such, they will go and read Modern Photography or American Photographer or they wonít read any damn magazine at all.
   They will go to the web site, look at camera.com or whatever--or read the photography coverage in our circuit section or they wonít read anything.
   Thatís an option now too, which is scary.

What about CRM programs? Letís talk about the other side of the messaging or the reasons why CRM is important because of the data. So we are able to learn more about consumers.

   That is a good thing because obviously the other side of it is supposed to work too, so that the consumer will supposedly get those messages that are valuable to him or her.
    So you can make the point that it is good for the consumer because it is supposed to cut down on the number of unwanted messages.

Email pollution?

   Whatever it is. What was the term I saw the other day, mail pull? had never heard that. Some guy wrote something and he got 700 emails complaining about it--"that was some mail pull that today."
     You can make the case that CRM is supposed to benefit both sides. The consumer gets less stuff, only what he or she wants, and the marketer is more efficient and effective and saves money that had been wasted.
   Yet when you look at the Enrons of the world, when you look at their behavior, you can also create a very strong doomsday scenario around a company with no ethics that is manipulating data.
Enronís purpose was just to enrich the people at the top and to heck with the consumers and to heck with the employees, the heck with everyone else except thee and me. And thatís a very scary scenario.

Do you think the government should be involved?

   I donít know because clearly the country, the consumer, doesnít want the government involved. I donít know.
    Bush was elected on a platform that was against nation-building and about getting the government out of peopleís lives, and now the government is more involved after Sept. 11 than perhaps ever.
    So itís hard to say.
    But there is always the risk if the outcry from the consumer gets loud enough, government will step in.
    Even with a laissez-faire Republican administration, if there is enough of an outcry, thatís going to make a difference, whether they are perceived as pro-business rather than pro-consumer. Then it will happen.

I think that the CRM element has grown. The technology has fostered it because it allows marketers to have more of a one-to-one dialogue. We have a much more dynamic and discriminating consumer public. And so the question is: If all the focus, targeting and personalization feel inappropriate, why are consumers opting in? After what time period will we know the true value and true limitation of CRM-relationship marketing? Do you think we will see that this year?

   One of the points of CRM is that it is going to work for some people and for others it is not.
   I donít think you can say that this is the year for it to break through, that this is the year it is going to make it or not, because it is another tool in the arsenal. Itís another weapon, itís another part of what you need.

Do you see any companies doing it well?

  I donít know specifically enough because there are four billion companies out there,  and for every one I read about there are about 50 that are flopping that you never hear about.

How often do you opt-in?

Iím not a good-example. I do it on purpose. I opt in on purpose to see what the offer looks like.

Got it.

   I have a separate email account where I am getting flooded with spam. Not spam--itís stuff I asked for.
    So whenever M&Ms introduces a new product, I get an email for it, and every time Wyndam Hotels and Resorts is running a special at the Wyndam at the Island of Omogomo or whatever, I have to look it up on a map because I donít even know where that is.
    They will send me an email because I want to see whatís going on in the world. Iím not a good person to ask that question because I want to see whatís out there.
    Iím getting email from M&Mís, for Godís sake.

Are you familiar with the work that the U.S. Virgin Islands did with the Warner Bros. Bugs Bunny cartoon--it was a dynamic cartoon online.

   No, I never heard of that one.

The USVI was worked into it in a very nice, subtle way. Do you think that crosses a line if itís done tastefully like this one?

    But you have to tell people, you have to say in the beginning that itís U.S. Virgin Islands Presents, you know, Wacky Island or whatever. You have to tell people.
    If you donít tell people, then you are undermining Bugs Bunny. It may seem great for a marketer to exploit Bugs Bunny and trick people, but the next guy who comes along and tries to use Bugs BunnyÖwellÖitís too late.

I agree. How about a personality like Britney Spears?

    Lillian Russell sold Coca-Cola over 100 years ago.
    I think the concept of celebrity endorsement is something that consumers understand. They know that a celebrity they see selling something in an ad, like Britney, could also be seen drinking Coke or Sunkist Orange or something, and the advertiser will send out a memo reminding her of what products it makes.
    I love that Britney thought Coke was made by Pepsi! I donít think sheís that bubble-headed. Something like that is within the framework.
    I think there was another story about someone caught with a hand in the cookie jar.
    Some celebrity was going around talking about osteoporosis or something and it turned out that this celebrity was on one of those paid speaking media tours arranged by a drug company. The product wasnít disclosed.
    And one of the major morning shows got fooled and, boy, I bet theyíve got a black list in their green room now! I am sure that the drug company, PR firm and celebrity are on that list now, though maybe not forever.
    But on the other hand you are in a world now where Victoria Principle can go on the "Today Show" and they will say, "Victoria suffers from lazy eye, and sheís here with us today because Merck has a new drug for lazy eye and she wants to alert the public, the country, to the tragedy of lazy eye and how it can be cured or treated."

So as long as there is disclosure.

   I think there has to be some sort of acknowledgement, or disclosure or nod to the fact that there is an advertiser involved in this, bringing it to you.
    Consumers like celebrity endorsements. I mean they know that when they watch a TV show or read a magazine there are going to be things there that are "offensive" and there is going to be other stuff in there that is going to be labeled, or boxed in some fashion that is "subjective."

Do you think PR has impacted credibility? Clearly the public relations industry is working with various media companies to get the message out, when itís through an article where the writer came upon a case study that he thought was interesting and just worked itís way into the piece?

   Sure. Thereís a possibility that the growing role of public relations has helped to blur the boundaries, and again, part of it is in the search for ratings.
    I donít think 20 or 30 years ago there was a concept of a celebrity being sent around by a drug company to talk about an ailment.
    I donít think those wouldíve been on those morning shows. The people who ran those came out of the "hard news" school of journalism: "This is important, we have to have something on Vietnam on the show today."
    So I would say it takes two to tango, and in many cases the news media are relaxing their traditional standards too. They are covering things, writing things--I mean, we had an article about Botox on the front page recently--you wouldnít have seen it on the cover of The New York Times decades ago. It wasnít important enough or serious enough.
    But itís a different world we live in now.
    Some of that has worked to the advantage of the advertisers, the marketers, so thatís good in and of itself that you have gotten your nose under the tent and you can have that kind of content in there.
    But then itís like, this isnít enough, we have to push ourselves completely into the tent and not make it clear that we are really advertising, which is creepy.

What are the ramifications of what we are talking about here as they relate to cross-platform deals?

  The cross-platform deal, I think, encourages this line-blurring because itís like, well, if we are going to do it in our magazine and our web site and our amusement parks and our book division and our record division, we better come up with some crazy thing that does this or that or the other.
    It puts the whole burden on this thing to go spin off in that direction. Now that we have all the arms of our giant media company involved we better get the editors on the program, better get them all working on this.
   It could be a bad thing. There could be a potential for abuse there.

When itís something as basic as an automobile like Toyota?

   Iím a purist on this stuff, what can I say?
    I think that I grew up in a certain generation.
    Now some punk is going to look at that and say, "Whatever, dude," and they donít care that Good Housekeeping this month has some advertising supplement that looks like one of the other Hearst magazines and itís sponsored by Toyota and itís nothing but Toyota ads with make-believe, fake articles interspersed. Maybe that doesnít bother them.

I always say that church and state is more like cat and mouse in the online world, where the editors are reporting to the sales guys in some cases.

    Iíve heard some stories that, if I had any hair left, it would make it curl, about the salespeople going to editors saying, "What can I do to make your job easier? What can I do to get this going, what can I do to get this sale made?"

Okay, letís talk about a very serious subject nowÖfun. What does it take to have fun in the media business these days?

   I donít know.
    I donít think anybody is having fun. I think thatís part of the problem. Part of it is that itís hard times. A year-and-a-half ago it was like foosball tables in the break room, and everybody gets free soda and now itís like "You should be thankful you have a job, now get back to work."
    I think part of it too is this idea that in this mindset people in advertising think that they are working on the cure for cancer or something, other than just trying to sell more snack food or soft drinks or cars or whatever.
    Some of the self-righteous, pompous people that come my way, sometimes itís flabbergasting.
    Currently we have probably the largest scandal in the history of American capitalism going on and people donít understand that, because all of this is covered in the same [Business] section in which my column appears.
    We donít have as much room for the addenda anymore as we used to and itís infuriating to them. Itís like, take off your blinders.
    You are living in a world where there is this cancer growing on American capitalism, but all they can say is, "But, I was just promoted!"
    I think itís their own fault that they arenít having any fun because theyíre taking what theyíre doing so seriously.
    All they have to do is peep their heads up six inches above their cubicles and they may notice that thereís a war, a recession, a huge looming business scandal.
    The Kmarts of the world, the companies that people grew up with that seemed like the Rock of Gibraltar, are now bankrupt.
    Itís a very different world out there, and I think that sometimes itís peopleís own fault.
    Take a Friday afternoon off to walk on the beach. Go see a movie during the day. Lighten up a little and take a breath. Let GO a little bit.

Very good advice indeed. Thanks Stuart!

March 5, 2002 © 2002 Media Life

-Tim McHale is chief media officer of Tribal DDB Worldwide, overseeing media and CRM investments. This is his second annual chat with Stuart Elliott. McHale can be reached for private comment at mchale@tribalddb.com

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