The case for in-house versus outside agencies

In-house or outhouse? The debate about using in-house advertising services versus traditional, outside agencies has raged for decades. It’s especially relevant if you’re marketing products or services with heavy concentrations of technology and jargon.

“They just don’t understand our business,” goes the call for hiring permanent employees who will learn the product/service messages well enough to think like the people to whom your communications programs are directed. Outside agencies are an easy mark for this criticism because they have notoriously high turnover and it seems like you’re always having to “break in” new agency staffers.

Since I’ve spent significant portions of my 30-year career on both sides of this debate, and since my consulting firm works with several clients’ large in-house staffs, I guess I can be as objective as anyone on this subject.

So here are some observations on in-house versus outside to help you sort your way through this surprisingly easy issue. For brevity’s sake, I will generalize like crazy and only deal with key issues.

The case for in-house

1. Team membership

When you’re a company employee, you automatically qualify as a member of the home team. You’re not selling anything, so your motives are “pure.” And because your paycheck is guaranteed, you’re free to think about things as much as you like. Agency people generally have to get client permission to work on projects, and then they can only put in as much time as the budget allows. Otherwise, they’re giving away billable time, and that’s generally frowned upon in agency-land.

2. Continuity

In my experience, in-house people really do stay in one place longer than their outside agency counterparts. Assuming in-house agency staffers get better with every passing year, the continuity and accumulated experience this provides is the strongest argument in favor of the inside marcom group. If they don’t get better over time, however, this can have the opposite effect. Outside agencies ruthlessly weed out dead wood. In-house agencies don’t. (It’s kind of like voting against an ineffective senator who’s in line for an important committee assignment — it doesn’t happen.)

3. Access to Big Ideas

In-house people have better access to everything because they’re there every day. I’ve seen as many Big Ideas pop out in the elevator or company lunchroom as in conference rooms where attendees are supposed to be tossing out Big Ideas. Plus, you’ve got easier access to company information and dozens of valuable resources that make projects go smoother.

The case for outside agencies

1. Objectivity

You know the story about being unable to see the forest for all the trees? There’s a lot of truth to this. Inside people tend to fall victim to tradition or procedure (”we’ve always done it like that”) or just taking the path of least resistance. They may not be willing to go too far out on a limb to argue in favor of something the company needs to do, but has yet to fully embrace. Outside firms can offer new perspectives based on experiences with other clients in different or related markets.

2. Creativity

Creative people, namely artists, writers and now computer jocks, would rather work for outside agencies. They get a richer variety of assignments and, for the most part, see more opportunity for advancement. Outside agencies tend to offer a more nurturing environment for creative people. Conversations start at a higher level, because it is understood that advertising is important (that’s why we’re here, after all). In-house groups spend a lot of their time defending the practice of advertising against non-believers.

3. Productivity

I’ll probably get some argument here, but the flip side of team membership is that you don’t get dumped on as much with assignments that have little or nothing to do with marketing communications. During both of my stints as company-side practitioner, I recall thinking how much of my potential productive time was wasted doing meaningless tasks for big wheels who popped in my office with a late afternoon “Oh, by the way” request. Team players have a hard time saying no. Outside agency people are paid to focus on the assigned tasks.

Cost-savings

You may have noticed I’ve avoided “cost savings” as an issue in the in-house versus outside agency debate. That’s because it isn’t an issue.

In-house agencies must pay salaries competitive with outside agencies. If anything, they pay more. I’ve interviewed dozens of former in-house marcom managers whose salary expectations were out of line with outside agency pay scales. The same applies for writers, art directors and other in-house positions.

In either case, salaries and benefits comprise the greatest portion of inside or outside agency overhead. And these costs should be essentially the same for either type set-up. Other overhead factors like computers, furniture, office space, utilities, etc. are also a wash.

If an outside agency makes 10% net profit, it has done extremely well. Usually it’s a lot less. And this profit margin includes commissions from media and mark-ups of other outside production. In-house agency advocates like to take the media and production budgets, multiply by 15% and present that as the annual savings opportunity.

Unfortunately, this analysis just doesn’t compute. When the in-house organization absorbs its share of all operational costs, including taxes, invoice processing and indirect overhead, the simple truth is that outside agencies are not pocketing commissions as incremental profit. These revenues go in the pot along with everything else and the bottom line is usually less than 10% of total revenues. And much of that is plowed back into the company to keep it competitive.

So the decision doesn’t hang on money.

The case for good people

If you are struggling with the in-house versus outside agency question, the only issue that matters is, “Which approach will give us the most effective communications program for our products and services for the money we choose to invest?”

And like everything else in the services business, the quality of the work will probably come down to the quality of people you can enlist. If you find quality people who want to form an in-house group, you should give them a shot. You’ll probably be pleased with the results.

But after a while, if you notice the service has dropped, you should be equally willing to disband the in-house group and go in the other direction.

It’s not about building empires or saving money. It’s not even about convenience. It’s about doing good work. And you can provide the proper environment for this on either side of the fence.

Don’t be afraid to experiment

When Claude Hopkins wrote his classic book, Scientific Advertising, in 1923, he was of the opinion that advertising was no longer a gamble.  Because he had studied the cause and effect relationships of variables like copy, headlines, illustrations and typefaces, he felt the risk of advertising had been reduced so that it was “one of the safest of business ventures.”

 Wouldn’t it be great if we felt that way today?  Most businessmen these days are scared to death of advertising: it costs a lot of money and they’re not sure what they get in return.

Certainly there are infinitely more variables to worry about now than when Claude Hopkins plied his trade.  Still, the primary point of his book is lost on today’s practitioner: learn from every effort so your next one is better.

Claude Hopkins was an incessant tinkerer, an advertising scientist of the first order.  He wasn’t afraid to treat words, visual elements and even delivery vehicles as a chemist would treat variables in a lab.  He played with them until he was convinced he knew the best combination for maximum results.

That’s exactly what we advertising and marketing communications professionals should be doing today.  Several years ago, I wrote a column for Marketing News entitled, “Accountability is the name of the game.”  It’s truer now than the day I wrote it.

Advertisers are demanding accountability.  They want to know what they get for their money, and why they should be expected to budget large sums for future advertising programs.  It’s up to us to tell them and, in general, we’re doing a lousy job.

It’s not entirely our fault, however.  The advertiser has to help the agency in its quest for knowledge.

A few years ago, I had a client who was having a difficult time achieving breakeven for a product that should have been selling like pancakes.  We couldn’t put our finger on the problem.  Perhaps it was price point.  We initially priced it at $15.00, but had reduced it below $10.00 without much improvement. 

We wondered if the product, a disposable bacteria test kit, should be packaged individually, several to a package, or in bulk with all like components bagged together in an economy pack. 

We had tried several introductory offers, like discounts, limited time offers, even one promising a free gift with every trial purchase.  Nothing worked too well.  The client’s top management was getting ready to pull the plug and we knew it.  Patience was wearing thin, and we had to come up with the winning combination or all was lost.

We recommended a direct mail program to a data base of several thousand interested prospects that had been compiled from previous promotional efforts.  We would vary the offer, even the way the product was packaged, in each “cell” and determine which one pulled best.  Then we would use the winning combination to follow up with the other prospects to see if we could produce a steady, upward sales trend.

Unfortunately, the product manager wasn’t as concerned with finding the winning combination as we were.  Despite the fact that our direct mail test would be very inexpensive (personalized letters and 2-color product flyers with business reply mail response cards), he had become infatuated with Swiss Army Knives, and wanted to offer one to all of his prospects.

We groaned, and proceeded to carry out the product’s death sentence.  Six months later, the product manager was working in a fast food restaurant in Montana and we were minus one very promising account.

It doesn’t have to be like that, though.  Direct response people know about experimentation.  I’ve always admired and respected their discipline.  Many years ago, I agreed to lead a workshop on creativity at the Direct Marketing Association’s annual conference thinking that direct marketers wouldn’t be all that interested in the subject.  Imagine my surprise at the standing room only crowd.  They soaked it up. 

I came away from that experience convinced that direct marketers are looking at “creative” as the final ingredient in their recipe for success.  They already know how to maximize the other variables.

But what about other media?  Is it possible to experiment with trade publication advertising, for example?

Absolutely!  And since trade publication advertising generally involves large chunks of an advertiser’s budget, it’s precisely the area in which you should concentrate first.

I spoke with John Emery and Gordon Hughes, past presidents of the American Business Press, in gathering information for this essay.  Both pointed to the day when magazine publishing will collide with the information superhighway, creating all sorts of advertising experimentation possibilities.  That day has now arrived.

For many years, publishers have been willing to work with large advertisers to run separate, “split run” ads in different geographic or demographic editions of their books.  Computerization makes this much easier now, and for much finer circulation splits.  Why emphasize “processing speed” to financial managers when “reducing costs” is what they’re interested in?  Tell that to the engineers or plant managers.

What if you’re considering the appeal of several possible calls to action?  Use split runs to test the pulling power of a product sample versus a packet of case histories versus a specialty item with your logo on it.  One suggestion Emery made was to test various ad appeals with a sampling of a publication’s total audience by producing color laser prints of your ad with the three different appeals, then mailing them along with a cover letter asking readers to help you decide.

Tinker.  Why be happy with one approach when you can test several?  This is the chance you’ve been waiting for to test that stupid idea your boss keeps bringing up against your brilliant one. 

And if the stupid one wins, look at it this way: at least the boss will be highly motivated to expand the program next year.

Ad management tips for the newly annointed

More and more companies these days are putting managers in charge of the advertising function who have little or no experience in that area.  If you are one of these people, here are several important tips to guide your efforts.

 1.  You can’t save your way to success.

 Because advertising is an expensive and sometimes frightening prospect for the uninitiated, many managers react by cutting back the level of activity.  If times are really hard (like now, for example), they cut the program out altogether.

This is a simple fix, but not a proper one.  Chances are, your competitors are experiencing difficulty, too.  If everyone cuts back on promotional activities, it’s much easier for you to gain market share and maximize bottom-line results if you maintain an aggressive program.

And if competitors are not cutting back, you’ll get left in a cloud of dust.  The goal is to use the marcom funds your company has allocated to best advantage.  They’re of no help to people in the trenches if the funds are still a line item on your operating budget sheet.

 2.  Planning is good.

If you’re concerned about doing the wrong thing, an in-depth planning session can be just what the doctor ordered.  Too many managers these days are inclined to look at planning as an unnecessary expense.  They want to skip the planning step and get started right away on specific projects. 

Spending a few dollars on planning makes all the other dollars go further.  And it will alleviate your anxiety about investing large sums in things you don’t fully understand.  The understanding will come with each program you undertake, but it does make it considerably more enjoyable if the first ones are targeted at the right market opportunities.

3.  The agency is your partner.

Some first-time managers take a vendor/buyer or (even worse) adversarial posture with the advertising agency.  I guess the thinking is you’ll get more out of them if they’re scared or reacting in a defensive manner.

Think about how you react to people who keep you at arm’s length, doling out limited information while making you think if this project falls short of their vaguely defined objectives, there probably won’t be another one. 

Most agency people I know would work harder for someone who treats them like a partner, someone who shares confidential information, sets high expectations and gives them lots of encouragement along the way. 

And it really is okay to tell the agency people they’re doing a good job, too.  They’re not going to raise their rates.

4.  The best price is generally not the low price.

Anytime I encounter a client who has received a very enticing low bid from another agency or supplier, I tell them I can do the job for less.  Because I can.  It’s easy in this business to cut corners and trim costs out of projects. 

We can work with less expensive people, spend less time in each phase, rule out more expensive creative options, even skip steps altogether.  You may not be totally thrilled with the results, but that’s what happens when we’re constrained by the prospects of losing money on a job. 

You may be thinking, “but what about competitors who have different cost structures and are willing to put in more effort for the reduced budget?”  And in some isolated cases, there are talented people who charge less for their time than the market will bear. 

Eventually, however, most people who are good know it, and want to be paid accordingly.  In no other occupation is the saying, “you get what you pay for” more true.

5.  Remember the T.M.D. Rule.

There are three primary things that impact an agency’s ability to do good work in advertising and marketing communications: Time, Money and Direction.  Lack of effort or attention in any of these three areas can doom a program before it begins.

Instead of demanding that a project be completed in an unreasonable timeframe, ask for a range from most expedient to normal to relaxed.  If you really need the shortest time schedule, help them understand why, because they’ll have to justify pushing aside other projects in order to accommodate your deadline request.

Setting budgets is particularly difficult for managers who have no experience in this area.  The agency probably has historical records of project costs, and can furnish these on request for projects similar to the ones you have in mind.

The way to get more for your money is to set a reasonable budget, and then demand that the agency “knock your socks off” with creative concepts that will make your program stand out.

And don’t forget to provide proper direction.  The closer your agency partners are to the nitty-gritty of “how” and “why” your product or service is good, the better their efforts are going to be.  They’re visual people, so it really does pay dividends to paint them pictures: provide diagrams, photos, take them on lab or plant tours, even let them ride with salespeople or attend marketing sessions where selling strategy is being discussed. 

You never know where or when a truly breakthrough idea is going to pop up.  And the agency’s different perspective can find one that’s hiding amidst a forest of mundane points, invisible to those of you who wander through the trees every day.

6.         Continuity is important.

Many new managers think they have to throw out everything that’s been done in the past, and put their stamp on a totally new program.  And this may be the right decision in some cases.

In many others, however, it’s better to fine-tune the ongoing programs because their messages are only just beginning to sink in with customers and prospects.  You can add value by re-focusing the program objectives and pressing for better execution in most cases.

These suggestions are not a panacea, but they will help you get your feet on the ground quicker and off to a better start with less anxiety.  Advertising is the single most powerful tool at your disposal if you learn to use it properly.

Writing up a blue streak

One of my favorite pastimes is exploring used book stores in search of out-of-print issues by famous ad men and women.  Several years ago, I hit the jackpot discovering Fairfax Cone’s collection of memos to his staff at Foote, Cone & Belding in Chicago.

 The book is titled, “The Blue Streak” and it was published in 1973 by Crain Communications, publishers of ADVERTISING AGE and BtoB Magazine.  The title comes from the distinctive, blue-striped letterheads that were used to deliver more than one thousand memos “to the organization” over a 22-year span.  The book contains less than 10% of his total writings.

You can bet there were snickers and rolled eyes from staff members each time a new memo would arrive.  Management diatribes are always received that way.  And to be sure, Fairfax Cone jumped on his soap box frequently and with little provocation.  But it’s amazing the amount of insight and knowledge these memos reveal, and how well some of his prognostications hold up.

For example, in 1948 he made the observation that “An advertising agency cannot be better than its clients.  It may be weaker, or it may be equal, but it can’t be better.”  Every agency knows this to be true.  Some clients routinely allow/demand good work to be created.  Others never let it happen. 

In 1959, he warned of the dangers of using stock photography by telling of a situation in which rival dog food manufacturers, Friskies and Purina Dog Chow, used the same photo of an Irish setter in magazine ads within a 12-month period.  (It’s even worse today.)

He described the concept of “narrowcasting” in 1961 (30 years before the term was coined) by pointing out how FC&B client Hallmark Cards used its famous Hallmark Hall of Fame television show to reach selective audiences with high quality programming not intended for “the masses.”

Cone also lobbied persistently for “rotation” of TV spots so that networks would be free to produce a wider variety of shows to satisfy all tastes.  In other words, you couldn’t just buy one (highly rated) show.  Unfortunately, this concept never caught on.

Cone worried in his memos about new “creative” trends in advertising that appear to be off-base.  In 1953, he noted, “I think a good many advertising people today are making ads instead of trying to sell somebody something.” And in 1963, he said, “Most misadventures in advertising are attributable to the mistake that is easiest of all to make, which is designing an advertisement instead of planning a proposition.

This is especially good advice today, given the over-emphasis on humor, borrowed interest and computer effects.

He reminds copywriters of the importance of aiming messages at one person versus a faceless, impersonal mass of prospective buyers and describes, in several different forms, the imperatives of good advertising:

            1.         Clearly state the proposition,

            2.         Demonstrate how the proposition is of value to the viewer, listener or reader,

            3.         Fashion the proposition so it appeals personally to the logical prospects,

            4.         Express the personality of the advertiser, and

            5.         Demand action (i.e., ask for an order or exact a mental pledge).

Reading these memos not only gives you insight into the man’s philosophy and core principles, but it makes you feel “plugged in.”  For FC&B staffers many miles removed from the board rooms and conference rooms where key decisions are made, it surely must have helped their understanding of how things happen and why.

He set the record straight when accounts were lost or when the agency elected not to participate in client reviews.  He held up examples of ads he considered good, and lambasted ones he thought a waste of money.  And he constantly defended the profession of advertising against attacks from liberal media or conservative academics.

Cone’s main accomplishment, however, was to encourage his creative people to use sound logic and proven fundamentals in the presence of unorthodox techniques being tried by others in the great “creative revolution” of the 60s.  While I’m sure that some of these untested approaches were successful, it’s also well documented that many of the more famous ones generated more awards than sales for the advertiser.

Not only did FC&B campaigns help produce sales, but their consistency produced advertising recognition of the highest order.  In his memo announcing the selection of Shirley Polykoff as Advertising Woman of the Year (1967), Cone noted with pride that her classic Clairol campaign was now in its twelfth year.

Many of today’s practitioners would be well-served to read those comments over and over again.  It’s a shame more people like Fairfax Cone are not reminding their staffs to look for memorable ways to deliver selling propositions, rather than develop spellbinding special effects that entertain, but leave you wondering who the advertiser was. 

We could all benefit from a few well-timed “blue streaks,” I suppose.

 

The Power of Listening

We tend to listen (think) four times faster than we can talk.  You’d think that was good, but actually it’s not, because our minds get bored and wander off.

Staying focused on someone else’s thoughts is tough, especially if the other person is anything less than a scintillating speaker.  And few of us are.

But there’s nothing more powerful in the communications world than a skillful listener.  We’ve all heard the old statistic about forgetting half of everything we’ve heard within 48 hours, and most of the rest within several days. 

My suspicion is in today’s over-communicated world, the numbers are even worse.  Sometimes I can’t even remember the sponsor of a favorite TV commercial minutes after it ran.

I was cleaning out some old reference files the other day, and came across a program developed by Sperry Corporation in the early 80s for its employees.  More than 40,000 Sperry employees received the training over a 5-year period. 

The program was developed by listening expert Lyman Stiel, a former associate of Ralph Nichols at the University of Minnesota.  Nichols is generally regarded as “the father of listening” and Stiel is no slouch.

According to the Sperry program, here are ten keys to effective listening:

1.  Find areas of interest – Don’t tune out dry subjects, ask “What’s in it for me?”

2.  Judge content, not delivery – Don’t be distracted by poor delivery, look for the meat.

3.  Hold your fire – Wait until you have received the whole message, ensure comprehension.

4.  Listen for ideas – Get beyond the facts, listen for central themes and basic ideas.

5.  Be flexible – Take fewer notes and concentrate more on the speaker and his/her message.

6.  Work at listening – Relax and listen actively with facial movements, shakes or nods.

7.  Resist distractions –This is for you cell phone junkies and laptop addicts.  Put those away.

8.  Exercise your mind – Use the speaker’s heavier content to stretch your mind.  Dig in, don’t tune out.

9.  Keep your mind open – Don’t get hung up on certain words, especially emotional ones.

10.  Thought is faster than speech – Use that to your advantage: anticipate, summarize, weigh the evidence, and look between the lines.

The Sperry program was not intended to create “expert” listeners.  They only professed to appreciate the importance of listening better, and they took the extra step of equipping their employees with specialized training. 

Since listening is the most frequently used communication skill (ahead of speaking, reading and writing), but the least often taught, maybe it’s time we closed the gap.

Speaking with one voice

(Author’s note: This entry originally written for David Cameron’s On Brands blog. See http://onbrands.wordpress.com/)

In branding, freedom of speech is unconstitutional.  Every time I make that statement, somebody cringes, but it’s true. 

In order to build a focused brand image, you have to associate your brand with an expectation, usually tied to a single attribute that will help customers, prospects, suppliers, employees-to-be and any other important audience understand why they should do business with you.  And because of that, you can’t have divisional marcom people emphasizing things that might create different expectations.

This is not as restrictive as it sounds, because by definition the overall brand expectation has to be fairly broad.  When Kathy Button Bell took over the branding program for St. Louis-based Emerson, she found sixty-six autonomous divisions doing their own thing.  Rather than tell them what they couldn’t say, Bell and her branding team came up with a slogan, “Emerson, consider it solved,” and an overall campaign aimed at turning Emerson into a company of problem-solving zealots. 

No matter what kind of widgets they’re selling, those widgets still have to solve problems or customers wouldn’t buy them.  So now, roughly eight years after the “consider it solved” program was launched, Emerson is perceived as an organization of cross-functional teams selling integrated solutions.  And sales to their largest “marquee” accounts have gone way up.

Same thing with General Electric.  When Jeff Immelt took the baton from the legendary Jack Welch in 2002, he saw an image shift was in order.  Immelt correctly perceived that future sales gains needed to come from internally generated technology, and unfortunately, GE wasn’t being given much credit for innovation.

So out went “We bring good things to life,” and in came “Imagination at work.”  I think the program’s working because major magazines like FORTUNE are now ranking GE at the top of their list of world’s most innovative companies.  It’s just a matter of emphasis.

Caterpillar took control of its brand image in the mid-90s with a program actually called One Voice.  Again, they avoided the punitive aspects of telling people what not to say, and simply focused on creating an accurate picture of what Caterpillar is: a manufacturer of rugged, reliable construction equipment.  Today, I think Caterpillar is the strongest example of a focused b-to-b brand you can find.

In each of these cases, divisional marcom managers are free to promote product or service related messages, but they do it under an umbrella that supports the overall brand expectation.  Every GE product or service ad has some aspect of innovation in it.  Emerson ads show how products solve problems.  Caterpillar ads are always strong and manly (never delicate).

So I guess “freedom of speech” is relative.  What I’m really saying is stay in character.  Say what you want as long as you’re consistent with the brand personality and overall expectation you want people to have when they see or hear your name.  That’s how brand power is created.

The voice of dependability

When I’m asked to give an example of a highly focused b-to-b brand, I usually say Caterpillar.  You don’t have to know anything about construction equipment to know their stuff is rugged and reliable. 

 But you might be surprised that fifteen years ago the company’s communications experts were fearful the path was headed toward chaos and confusion. Their carefully crafted identity was coming apart at the seams, one stitch at a time.

“Everyone wanted to do his or her own thing,” said former manager of corporate identity Bonnie Briggs.  “We had newly decentralized divisions creating product names by the hundreds, logo contests proliferating among employee groups, even people adding elements to the corporate logo.  It was totally out of control.” 

Especially popular were innocuous, seemingly innocent acronyms, which usually included the word Caterpillar. Unfortunately, when you put them all together, the company’s primary brand asset disappeared.

“We had to develop a way to enable thousands of Caterpillar employees to do their jobs without undermining the strength and integrity of our corporate image,” Briggs said.  So they enlisted the help of New York brand consulting firm Siegel & Gale, who worked closely with Caterpillar’s in-house managers to create a program that ultimately became known as “One Voice”.

A lot of initial effort went into defining and focusing the Caterpillar personality and its key attributes.  A list of 20 words, including such adjectives as strong, reliable, genuine and serious, was assembled to help focus the mental picture people have when they think of Caterpillar. 

The team felt it was very important to capture and define the company’s sense of oneness and voice before it was lost.  They also recognized from the beginning the need to give operating level employees the freedom to exercise judgment and pursue opportunities without having to deal with a stifling manual of do’s and don’ts.  To do this, a three-tiered system of guidelines emerged. 

The first level was called “Uniform” standards, and is the one we usually find in a corporate identity standards program: logo usage, corporate colors, type faces, package designs, and so on.  These standards are considered, for the most part, inviolate and are not to be ignored or tampered with.

The second level is called “Shared/Related” standards, and includes guidelines for dealing with shared or related graphic formats like web pages, technical manuals, newsletters and product-oriented collateral materials that have a family look.

The third level is “Singular” standards, where the only guideline is making sure the communication effort fits the Caterpillar voice.  This covers ads, capability brochures, direct mail, tradeshow graphics and other one-of-a-kind marcom programs.  Obviously, this level is the most difficult to administer.

To facilitate understanding and implementation of the One Voice program, and to ensure buy-in among Caterpillar employees around the world, a series of training seminars were conducted.  “The basic seminar was originally two full days,” said Briggs, “but later we began offering one-day and even half-day sessions for special groups.”

Today, most training is done online.  Since the first seminar in 1994, more than 10,000 Caterpillar employees and advertising agency personnel have gone through the basic training programs.

Seminar attendees are exposed to copywriting and graphic image techniques that will help them successfully weave the Caterpillar personality into their communication efforts.  For example, they study ways to achieve greater strength with photographs by cropping closer on a key aspect of the overall shot.  They learn how to look for unexpected views, angles or lighting to increase drama and stopping power.  They emphasize the importance of actual job site shots versus studio or plant shots.  And they talk about using real employees in pictures rather than models.

In copy, the use of active verbs and strong adjectives is encouraged to convey the company personality.  The need to make each sentence clear, concise and relevant is covered, and more importantly, the need to write from the reader’s point of view.  (That part alone would be worth the price of admission.)

“We don’t tell people to use yellow and black,” Briggs said, “we just ask them to consider which combination of words and visuals will best demonstrate our ability to solve customer problems.  When copy and graphics don’t match who we are, it simply confuses the reader.”

When you think about it, many aspects of effective marketing communications are covered in the basic One Voice seminar.  Plus, attendees learn who they can contact for clarification or approvals in unusual situations.  The result is that communications staffers are no longer spending their time as logo cops for Caterpillar’s 100,000+ employees. 

And largely because of the One Voice initiative, Caterpillar today has been able to maintain its master brand approach.  Like many other enterprises, they learned the hard way not only do customers have trouble remembering new names, but they don’t know what those names stand for. Now when legitimate reasons emerge for creating a new name, it’s done so with a realistic understanding of the investment requirements and the associated risks.

The primary purpose of a brand is to build an expectation, and customers know when the name is Caterpillar, the product is likely to be durable and powerful.  In the construction equipment and diesel engine business, that says a lot.

Lessons from Howard Luck Gossage

Several years ago I discovered a delightful and somewhat rare book called The Book Of Gossage about the life and times of San Francisco ad legend Howard Luck Gossage, who practiced his trade back in the 50s and 60s out of a restored firehouse on Pacific Avenue.  Some of you may remember Gossage as the man who came up with the Great Paper Airplane contest to promote Scientific American magazine, or the kangaroo giveaway for Qantas Airline.

 We can also thank Gossage for recruiting the dry wit of comedian Stan Freeberg to the world of advertising, producing wildly successful campaigns for clients like Contadina tomato paste (“Who put eight great tomatoes in that little bitty can?  You know who. You know who.” After an awkward silence, the announcer would finally give the client’s name at the very end, just in case you didn’t know.)

Gossage was also ahead of his time on the subject of media commissions.  His policy was to rebate all commissions to his clients because he worked on retainer.  I’ve always liked retainers because they put you “on the team” and remove the necessity of selling additional media buys or projects that might not need to be done.  If you want objectivity, why put your agency in the position of having to sell you things to make enough money to staff adequately to handle your account?

I’ve written frequently about the importance of stickiness in advertising.  Gossage’s ads were always sticky because he liked to use coupons.  Sometimes, the stuff he gave away had no value whatsoever, like the “shirtkerchief” for Eagle Shirtmakers, which was merely a way to demonstrate their quality fabrics and stitching.  Or the free “Pink Air” coupon for Fina gasoline, which was a total hoax around the idea that since everything else at a Fina station had already been perfected with additives, making the air that goes in tires pink was the only additional improvement they could think of.

Every time Howard Gossage ran an ad with a tiny coupon in the lower right corner, thousands of people would cut it out, put it in an envelope with a stamp and mail it in.  This whole idea of involving the reader in the message was one of Gossage’s primary contributions to our craft, and sadly, it appears to have faded from the landscape.

The Book Of Gossage includes another book called Is There Any Hope For Advertising?, which consists of many of his speeches to ad groups.  It was published by the University of Illinois Press posthumously in 1986.  (Gossage died in 1969 of leukemia, a disease he said his doctor characterized as “fatal, but not serious.”)  This book-within-a-book describes many of his unique views on the nature and state of advertising, which Gossage obviously felt was badly in need of improvement.

One of his more salient observations had to do with the demise of our “free press.”  Gossage’s point was that we lost freedom of the press at precisely the same moment that newspaper and magazine publishers quit raising their subscription prices to cover the cost of publication.  When they decided that subscription costs only needed to cover a portion of the total expenses, with advertising revenue making up the difference, the decision about whether or not that publication was worth publishing was taken from the reader and transferred to the advertiser.   It’s an issue broadcast and print media managers are struggling with today – how can we charge for content in ways that are acceptable to people who want that content?

It bothered Howard Gossage a lot that many advertisers were trying to solve communication problems by throwing huge sums of “big stick” media money at them.  His favorite phrase was, “using a billion dollar hammer to pound a ten-cent thumbtack.”

Gossage asked us to consider how often you need to read a book, a news story or see a movie or play?  He joked, “If it is interesting, once is enough; if it is dull, once is plenty.”

So when he created print ads, he often did it with the notion that you were going to read each and every ad, and get the intended message without needing to run that particular ad again.  One famous low budget campaign he is known for was a series of ads for the Whiskey Distillers of Ireland in which he ended each ad in mid-sentence with copy picking up right where it left off the next week.

This is revolutionary stuff to a b-to-b guy like me.  My concern has always been about how many times we can run an ad before response drops off.  The problem with this, of course, is that most B2B ads are puffy, self-absorbed exercises in chest-thumping.

Maybe if we started thinking about ways to involve our readers and viewers in the message, once would be enough.

Avoiding the Black Swan

I forced myself to slog through Nassim Nicholas Taleb’s bestselling book, The Black Swan, because I kept thinking there would be valuable marketing insight tucked away.  And I guess that’s true, even though Taleb makes it very hard on the reader to discover insight.

 On one hand, he ridicules economists, investment counselors and other “prognosticators” for their inability to predict important events.  Then he turns right around and reminds you he was once one of those people, using four and five syllable words like epistemic and Platonicity to impress us with his in-depth credentials and wisdom.

 I’ve always felt a true expert should make complicated issues simple and understandable.  Taleb takes the other extreme.  By sprinkling his writing with ten and twenty dollar words, he forces you to continually flip back to previous pages and chapters to refresh your memory as to what he is saying.  It isn’t necessary, and it isn’t good journalism.  But enough about that.

 .There are some important lessons for marketers in The Black Swan, the main one being it’s almost as important to consider what we don’t know as it is to analyze what we do know.  Business intelligence software models historic data to help you predict the future based on what has happened in the past. Amazon has built a huge business using tools like that .

 And Taleb will tell you predictive software is okay for certain types of data that fit a bell curve (Gaussian) dispersion.  Other types of data, however, do not fit.  When one or two new entries completely change the average or the shape of the curve, traditional modeling formulas are out the window. 

 Movie ticket sales is a good example.  You might know that Titanic is the all-time box office champion with sales of more than $600 million ($1.8 billion adjusted for inflation). You might even have a list of other movies that have done well.  But someday a movie will come along that will totally obliterate the mark set by Titanic.  Predictions based on the bell curve dispersion of historic movie performance won’t help you estimate the potential of future blockbusters.

 That’s why Taleb strongly advises us to consider the unexpected.  His book, written in 2007, is filled with warnings about complicated derivative financial investments and Wall Street’s increasing fascination with them.  He’s one of the few people who spoke out about the dangers of acting like we know how to “manage risk” with these instruments when, in fact, they are unmanageable because of vulnerability to outside influences.

 It would be like asking military experts in 2003 how long we will need to take care of business in Iraq and get that country back on its feet with new leadership.  Whatever they might have predicted, it wouldn’t be six years and counting.  We simply don’t have the ability to predict things like that, so our plans should take into consideration extreme events that will cause our assumptions to go radically in one direction or another.

That’s the primary lesson of The Black Swan.  Analyze your historical data.  Consider your market position and competition.  Develop sales and market share projections.  But also consider what happens if extreme events change the game entirely.  New laws, new technology, wars, out of control inflation — these are all examples of possible scenarios that should be included in your planning.

 And in case you’re wondering about the book’s title, for hundreds of years we assumed all swans were white because every swan we could see was white.  One hundred percent of the data said swans are white.  And then someone spotted a black one.

 In the world of swan watching, that’s what you call a game changer.

Kicking and screaming into the blogging world

I just got back from the BMA annual conference in Chicago where at least half of the several dozen distinguished speakers were talking about the wonders of blogging.  Okay.  Okay.  So maybe there is some value there.  We’ll see.

For fifteen years, I wrote monthly columns for Marketing News magazine.  It’s not easy having viewpoints worth sharing, although I don’t think that slows down many bloggers.

In my book, The Case For B2B Branding, I researched 21 case studies on companies that have done something significant with their b-to-b branding programs.  I was fortunate to have dinner at the conference with a representative of one of those companies: Jason Cordova, director of strategic marketing for General Electric. 

I told Jason that GE was my branding epiphany.  More than ten years ago at a BMA conference in San Jose, CA, I heard Richard Costello, who at that time was GE’s manager of marketing communications, make this statement: “Last year, GE generated incremental revenues of $10 billion due to the power of our brand.”

I’m sure that statement flew over the heads of many people in the room that day, because we’re used to big company guys making statements with big numbers.  But Costello’s words hit me right between the eyes.  He said billion, not million.  And he said “incremental,” meaning it just goes along for the ride.  A bonus, if you will.

Later, as I was writing the book, I went back and looked up GE’s financials for the year Costello uttered those immortal words.  Ten billion dollars was roughly equal to GE’s entire net profit for that year, so you can say without brand power, GE would have been a break-even company.

Since that time, I have discovered many other b-to-b marketers who have decided to put brand power to work for their companies.  But the sad fact is most business marketers haven’t a clue about branding.  They still think it’s all about having better widgets with better features and benefits.

Several speakers at the BMA conference were all over that myth.  One of them, Joe Pine, has written and lectured persuasively about the commodization of goods and services, and about the need to move beyond that.   He calls it the “experience” economy — that’s actually the name of one of his books.  If you do a good job describing the experience customers can expect when they do business with you, they’ll pay for the privilege.

So in this blog space, I’ll be looking for ways to help business-to-business marketers understand the importance of branding and the rewards of doing it properly.  Stay tuned!