Ads must generate results
Building brand image is not enough if profitable sales don't follow

When Sergio Zyman was a marketer for the Coca-Cola Company in the eighties, the beverage manufacturer was running an ad using football star Mean Joe Green. In the commercial, after reluctantly drinking a little boy's Coke, Green throws him his shirt as a thank you present.

The ad generated positive reviews from customers, critics and bottlers. Coke marketers from all over the world wanted to translate it, and many did. Today Advertising Age magazine calls it "the most beloved commercial of all time." Yet Zyman killed the ad and pulled it off the air.

"I don't care about making award-winning commercials," said Zyman in his recent book The End of Marketing as we know it. "The only thing that any marketing person should care about is real consumption." And since the ad was not generating any new sales, Zyman killed it.

According to Zyman, marketers been hiding behind the concept of building brand images so they wont be accountable for producing results. It's not enough to get customers to feel good about your product, it's not even enough to raise buying intentions, the only thing that ultimately counts is profitable sales.

Zyman served two separate stints at the Coca-Cola Company, interrupted briefly after he was eased out for his role in the New Coke debacle. His book, is a 235-page rant about his life in marketing, his experiences at the beverage manufacturer and the lessons he learned.

For instance, when rival Pepsi began running commercials claiming that their product tasted better, the Coke marketers were lulled into thinking the only reason people bought their beverage was because of the taste.

Tests run at the Coca-Cola Company showed Pepsi was not lying, Pepsi did taste better than Coke. Since it is sweeter, at the initial sip, people get a smoother taste. So Coke had their scientists come up with a new formula, which was tested and re-tested, and introduced to the public in 1987 as New Coke, accompanied by a huge marketing campaign.

The result was a disaster, the public refused to accept the new product and after only 77 days, old Coke was re-launched as Coke Classic. Zyman left the company later that year. He re-joined in 1993, when Roberto Goizueta and Doug Ivester, who were then running Coke, eased him back into operations after using him as a consultant for an extended period.

The experience led Zyman to conclude that taste, is not the only reason people buy Coke. They buy it for the totality of the product, which includes the fact that it's old and familiar, and people feel comfortable with it.

Zyman's long years at Coke, and cocky attitude are reflected in his writing. "Advertising awareness and brand awareness are pretty easy things to create," said Zyman, conveniently forgetting that not all marketers work at companies with U.S.$1.74 billion annual advertising budgets.

Like most marketers, Zyman markets himself better than any product and does not suffer from false modesty. Reading his book, you would think he was single-handedly responsible for Coke's success.

He is loose in his use of numbers, at one point claiming to travel two million miles a year, which would average out to 16 hours per day in a plane, every business day of the year. This would not leave him much time for work.

In spite of his cocky, blustering attitude, and lack of facility with numbers, characteristics of more than one marketing executive, Zyman's insights are interesting because of the sheer breadth of his experience.

Strategy is everything according to Zyman. To properly establish a clear product image in the consumer's mind you need to first have a clear image in your own mind. Companies should focus on profits not revenues. The streets are littered with the corpses of companies that had high volume and no profit.

Marketing should be a profit center, and an integral part of the business. Zyman cites the fact that marketing budgets are the first to be cut in hard times as proof businesses don't take it seriously enough as a revenue builder.

Contradicting much of what ad agencies have been claiming for decades, Zyman believes marketing strategy should be defined by the advertiser, not the agency. "Agencies can never make smart, fully informed decisions because they are never going to be fully informed, said Zyman.

This is not the fault of agencies, but no company is going to disclose to outsiders, even its ad agency, the inner workings of a company such as returns on overall assets and resource allocation. This lack of information causes a disconnect between a company's goals and the advertising it receives from the agency.

According to Zyman advertising agencies should stop trying to be integrated providers of marketing solutions, and get back to basics of producing good ads. This philosophy led him to be one of the first to move away from the old remuneration scheme by which an agency's fees worked out to a percentage (usually 15 per cent) of total advertising spending.

Zyman prefers the method where an agency assigns a certain amount of people to an account, and is paid based on a multiple, usually between three and four times their combined salaries. He also believes in dealing with a variety of agencies, assigning one to each of a company's brands, thus generating competition between them.

The theory that advertising is meant just to create an image and to build a brand, and that marketing should bear no responsibility for generating new sales is so widespread that it's refreshing to hear a contradictory opinion occasionally. If for no other reason, Zyman's book is worth a look.

The end of Marketing as we know it, by Sergio Zyman, 235 pages, Harper Business.

Diekmeyer can be reached at peter@peterdiekmeyer.com

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  © 1998 Peter Diekmeyer Communications Inc.