Ad Chief: Increased Accountability Spells Trouble For Agencies, Media and Marketers

A "new marketing model" is emerging among the nation's largest advertisers and it means there will be increasing pressures on the accountability of agencies, the media and among corporate marketing executives themselves, the head of nation's top ad trade association said Thursday morning to a group of TV industry executives.

"Chief marketing officers are under enormous pressure to demonstrate returns on investment," Bob Liodice, president-CEO of the Association of National Advertisers, told attendees at the Television Bureau of Advertising's Forecast Conference in New York. "CEOs are holding marketers accountable for the effective management of billions of dollars n marketing expenditures. There is little tolerance for soft measures, excuses and explanations."

Among other things, he said this is forcing marketers to rethink conventional business practices, including the way they buy media in general and television in particular. He specifically cited the need for TV commercial ratings and to confront the network upfront sales process, which forced advertisers to pay 15% increases for primetime ad slots during the 2003-04 TV season.

advertisement

advertisement

"Marketers are going to look toward different alternatives. Marketers will not continue to accept 15% increases," said Liodice, adding that he did not know when the network upfront "bubble would bust," but that it was only a matter of time.

Meanwhile, he called on the TV industry to embrace a move to TV commercial ratings from traditional program ratings, which he said was a more practical proof of performance for TV advertisers.

"It's time for commercial ratings and the ability to demonstrate quantitatively the ability of your medium," Liodice challenged the TV executives, asserting that marketers "need to know what they are buying and what they are truly getting for their money."

He said marketers also are beginning to reconsider some fundamental aspects of their TV creative strategies, especially their reliance on 15-second commercials, and noted that some marketers are beginning to experiment more freely with 60-second spots, program sponsorships and product placement deals.

He added it is imperative that the TV industry move toward addressability and more refined methods of targeting, as well as "cross-platform integrated marketing campaigns."

Liodice said no one is immune from these new marketing pressures, including corporate marketers themselves, who he said would be exiled from the "corporate suite," if they feel to prove their accountability.

As for their relationships with ad agencies, Liodice rubbed a soar wound, noting they would continue to be "strained." He cited the "explosion of in- house" agencies and greater oversight from corporate procurement departments over agency compensation agreements.

"Watch out, procurement departments are on a witch hunt," he warned.

Next story loading loading..