Advertisers who don't perform, will see budgets cut
When someone's cellular device started ringing during Sergio Zyman's presentation to the Publicité Club de Montréal, last Thursday, he didn't miss a beat. "I am sorry about that," said Zyman. "I must have forgotten to turn my phone off."
But it wasn't his phone. In a quick phrase, Zyman was able to convey three messages. First, that the cement-head who left his cell phone on at a presentation for which hundreds of executives paid big bucks to attend, had committed a faux pas. Second, that the crowd should not get mad. And third, that everyone should turn their phones off.
That Zyman can do so much with a simple phrase is not surprising. Communications are his business. The former Coca-Cola Company vice-president (marketing) has managed to parlay his stint there, into an international writing, public speaking and consulting career.
At Coke where Zyman spent 33 years after graduating from Harvard Business School, he was known for his ruthless no nonsense approach to advertising. The agencies Zyman worked with, were under such pressure to perform, that they nicknamed him the Aya-Cola (a play on Ayatollah).
"People like to talk about brand building, but I view that as a cop-out." said Zyman, "The only acceptable definition of marketing, is to sell more stuff, to more people, more often, for more money."
Zyman advocates rigorously testing each advertising campaign, and tracking its effect on sales in the regions that it is being run. To make his point, Zyman likes to cite McDonalds.
"McDonald's already has 100% brand recognition. How much more can you increase that?" said Zyman. "If their ads are not generating new direct sales, they should change their strategy."
Needless to say, this results-oriented approach is pretty controversial. Advertising executives are wary of being judged by objective results. If revenues are down, marketers like having the freedom to blame other departments, such as manufacturing, sales or distribution. But measuring advertising campaigns gives marketers little wiggle room.
"People are being exposed to 5,000 advertising messages each day, and it's not easy (for marketers) to cut through" said Zyman. "Executives who can't figure out which parts of their advertising are working, are going to see their budgets cut."
Zyman believes that recent U.S. predictions about slowing advertising growth are understated. "Advertising is the first thing cut when talk of a recession hits," said Zyman. "The (U.S.) executives I talk to, are nervous about committing new dollars. Growth could drop as low as zero."
There was bit of an out-worldly quality about Zyman, -- who at one point, was using 33 different advertising agencies while running Coke's marketing department, -- addressing Quebec advertisers. If you toured the province's ad agencies in order of size, by the time you got down to the 33rd, you would be visiting phone booths.
But the Spanish accented Zyman, a vigorous self-promoter who got his start in Coke's Mexican subsidiary, went over well, despite the fact that his message was sometimes hard for many ad pros to swallow.
"The days of just showing up (in advertising) are over," said Zyman. "The competition and the ad clutter are too tough."
"The barriers to entry, into many businesses are almost non-existent," said Zyman. "If I want to compete with Sergio Jeans, I just fly down to Hong Kong, and within three months they will have an inventory of clothing manufactured to the size, weights and tastes of the Quebec market. They will even put my label on."
Zyman, who consulted on the presidential campaign of another ex Coke employee - Mexico's Vicente Fox -- believes that advertisers need to get more aggressive.
"In politics, an election campaign is short, so it's considered OK to ask for the vote, said Zyman. Heavy competition means that corporate advertising campaigns should be conducted with the same urgency. And if they don't work - they are gone. "I am working on a political campaign right now, where we are tracking the results every night."
But how should businesses measure judge the success of ad campaigns? "Just look at the sales figures, the next day," said Zyman curtly, before backtracking to a more conciliatory tone. "Well, maybe you could give 'em a week."
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