High marks for regional ads, but budgets migrating to New York, Toronto
Quebec advertising agencies are too reliant on local markets and cannot meet the needs of out-of-town clients. They are missing out on business from international clients, and ad budgets are migrating to New York and Toronto.
Those are some of the challenges facing Quebec's ad agencies that emerged at the Grand Virage, last week's three-day advertising industry summit on the effects of globalization and new technologies.
Organizers claimed 1,700 participants, including 800 paid delegates and 900 that attended the free sessions. Briefs were presented by about a dozen stakeholders representing advertisers, television and film producers and the education field.
But most of the focus was on Quebec's advertising agencies. Businesses are generally happy with their performance according to a survey conducted by Léger Marketing for event organizers. Of the companies questioned, at least 84 per cent of were either "very" or "quite" satisfied.
But those numbers don't tell the whole story. Quebec agencies tend to win local mandates, but few national or international assignments. For example a couple of years ago one of the provinces most successful companies - Bombardier -- was looking for an agency to handle its $14 million account. The company talked to most of the province's top firms but decided not to hire any of them.
At the time, Bombardier was widely condemned the move. But it has become apparent that local agencies should have taken the rejection as a signal they were not delivering the goods.
A growing schism has evolved between Quebec agencies and their clients. One statistic illustrates the split: Quebec companies exported $118.5 billion worth of goods and services in 1999 -- close to 60 per cent of the province's GDP. But the province's ad agencies exported next to nothing.
This lack of experience in doing business outside local borders has left Quebec agencies in a poor position to give advice on international expansion or how to respond to competitive domestic threats.
Although the challenges to local agencies seem to have been well defined at the summit, the solutions that emerged were less encouraging. Among them were the promotion of new training and mentoring programs, better monitoring of the industry, the development of world-class quality norms and better industry promotion in export markets.
They are all good suggestions, but none of these measures will generate results in the short or medium term. In fact by ignoring the real issues and giving the appearance of action, these solutions may do more harm than good.
Nobody asks marketing hacks about these sorts of things. But if they had, this one would have told them the three main problems holding back the province's ad industry are the Quebec government, the artist unions and the lack of local English ad production.
Ad budgets follow head offices. There are a slew of other provincial policies, taxes and stifling regulations that make it hard for businesses to operate in Quebec. Consequently many set up shop elsewhere, and take their ad budgets with them.
Allowing Quebec Culture Minister Diane Lemieux to waltz in and deliver the summit's keynote address, without subjecting her to some heavy lobbying was tantamount to whitewashing the government's role in the demise of local ad agencies.
A good example of provincial legislation holding back local ad production is Law 90, -- a uniquely Quebec creation -- that forces ad producers to deal with artist unions when putting together television commercials.
One particularly restrictive clause prevents producers from using non-union actors and models in productions that also use union members. This makes it difficult for out-of-province clients to use (for example) Quebec technicians from one union and Ontario actors from another.
But the most obvious problem holding back local agencies in dealing with globalization is the francization of the industry. About 90 per cent of the province's exports are to the U.S. and English Canada. Yet most of the province's ad industry operates in French. For cosmetic purposes many local agencies claim to be bilingual. But English ad production is rarely solicited. When contracts are won, they are completed at the back of the shop.
The group representing local ad agencies -- the Publicité Club de Montréal -- holds events conducted almost exclusively in French, and these is no category for English ads at its Coq D'Ors annual gala. One spokesperson, asked what Quebec's agencies can do to get their English ads recognized on the public stage replied, "they can always go to (the Marketing Awards in) Toronto."
That stance may have been defensible 20 years ago, but this is 2001. If Quebec's ad agencies are to profit from the challenges of globalization they are going to have to master English. Some firms such as Cossette Communication Group and Carat Stratégem have done this by forming alliances with companies outside the province. But to get export work, Quebec's advertising agencies are going to have to promote the development of local English ad production.
On the other hand, since Quebec businesses are exporting 60 per cent of GDP, and Quebec ad agencies are exporting next-to-nothing, maybe the ad agencies would prefer to ask their clients for some marketing advice.
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|© 2001 Peter Diekmeyer Communications Inc.|