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Marketing For Growth
Is Your Companys Marketing Strategy Delivering Bottom-Line Results? Heres A Roadmap On How To Build A Client / Agency Relationship That Works For You.
By LAURA RENTAS-GIUSTI
December 12, 2002
Brand-building partnerships: Local marketing managers, ad agency execs, and communications gurus shatter myths and offer insights on how to get the most out of your marketing buck
As companies everywhere struggle to get results on tight budgets, their marketing partners and suppliers are expected to do more with less. This goes for all marketing service providers--advertising agencies, public relations firms, events planners, etc.--who are pressed to produce big ideas that yield positive, measurable results for their clients.
The question is: Are agencies in Puerto Rico up to the task?
Marketing experts say an overcrowded local advertising industry has led to mediocrity, with many advertising agencies producing poor work and too many inexperienced marketing executives being unable to draft sound marketing plans and stick to them. As one industry source eloquently put it, "every guy who wins a Cuspide--the top local award for creativity in advertising--thinks he has the credentials to set up an advertising agency."
"Marketing executives and brand managers at client companies that invest in marketing are under great pressure to produce results with every dollar they spend. They need to grow their products through innovation, vision, wit, and agility with the help of partners who share their levels of responsibility," said one marketing consultant. Partnerships between agencies and their clients should yield added value for both businesses, not convenient results for one or the other.
When partnerships go awry, both agencies and clients are to blame, said the source. Many agencies are trapped in an inefficient business model, reliant on commissions for services rendered and volume discounts from media outlets. Clients have grown accustomed to remunerating their agencies for the little things, and agencies are reluctant to charge for the services that actually add value to their clients businesses. "Many agencies are staffed with low salary gophers who take care of the day-to-day things," he said. "And weak people provide weak service."
Nevertheless, a good number of agency / client teams are working together to build strong brands and reap the benefits that come with them. A few of them shared their success stories with CARIBBEAN BUSINESS. And while they are by no means meant to be all-inclusive, their stories provide shining examples of relationships that work.
From supplier to business partner
Truly successful agency / client relationships stem from mutual agreements to work as business partners, not as supplier and contractor. Clients who see their agencies as mere providers of advertising,
public relations, and promotions services are bound to receive less than the best from them. Similarly, agencies willing to provide services based on a superficial knowledge of their clients businesses are only further eroding the industrys reputation.
"The industry has had a hard time defining what partnership means," said Efren Pagan, president of ARCO Publicidad. "Having a partnership doesnt mean the agency will give clients as many discounts as possible, because that only limits resources. Partnerships are about understanding what each others responsibilities are, and establishing common criteria to evaluate each others work."
"We work hand-in-hand with our clients, assuming with them the responsibility for their business growth through our communications programs," said Vilma Colon, president of Corporate Communications. "Agencies should be complements to their clients marketing departments, adding value to their clients business without duplicating efforts." Corporate Communications client Pfizer recently received the Excellence in Marketing award from the Sales & Marketing Executives Association (SME) for the successful implementation of marketing strategies for Viagra.
Partnerships entail a policy of total disclosure of information, which is crucial for the relationship to blossom. "Its important that clients be willing to share information, and that people at all levels within the agency be willing to internalize the information," said Jose Alustiza, strategic planner and business development director at Badillo Nazca Saatchi & Saatchi. "Clients who include their agency staff in their meetings and provide detailed sales figures and market-share information give [us as agencies] the sensibility to understand we arent their entire universe. The magic happens when we stop seeing each other as agency and client and start seeing each other as a team working toward the same goals."
Mario Davila, president of Toyota de Puerto Rico, echoed the words of his agency. "How much information should we share with our agency? As much as we can. That includes mission, vision, long- and short-term business objectives, everything about the product, everything about the sales process, distribution, research, absolutely everything," said Davila. "If there is information you consider to be confidential, then draft a confidentiality agreement. Better yet, if you dont trust your agency, get a new one."
Agencies must complement the action with proactive efforts to learn as much as possible about their clients and their businesses. Jaime Fortuño, vice president & general manager of Lopito, Ileana & Howie, spoke of having a commonality of interests with clients. "We have to know we will all win if things go well and we will all suffer if they dont," he said, adding "agencies should always make an effort to share our clients sales hat and be willing to take a bullet for them."
Janette Miro, marketing vice president at R-G Premier Bank praised the initiative of the team at De la Cruz Group to become familiar with every aspect of the banks operation. "They are very dedicated and very involved," said Miro. "They visit the banks branches to assess their service from the customers point of view and get involved in the development of new branches. They dont limit themselves to producing ads and placing them; they research, they study, and they analyze everything that has to do with the bank."
With the help of communications strategies developed in partnership with De la Cruz, new accounts opened at R-G Premier Bank have grown by 143% compared to last year, said Miro. The bank also surpassed this years goal for Internet banking registrations back in August.
Its not just advertising anymore
Agencies accustomed to receiving volume discounts from media outlets spend as much as 90% of their clients budgets placing ads in TV, radio, and print media, according to veteran marketer Carlos Rom, partner at consulting firm Edge Group. "To quote WPP Group CEO Martin Sorrell: "When the only tool you have is a hammer, all you see out there are nails," he said.
To illustrate his point, Rom questioned the decision of a restaurant with five locations in the San Juan metro area, whose advertising strategy includes heavy TV ad rotation. "Where are the local marketing efforts? If your business is concentrated in the metro area, what do you need islandwide TV for? Things like that border on advertising malpractice," said Rom.
Alustiza agreed advertising in traditional media isnt the answer for all business challenges. "Advertising is one of many variables businesses have to control their results, it is just one component of the marketing equation," he said. "Sometimes it is our responsibility, as advertising experts, to tell clients when advertising isnt the solution to their problems." ARCOs Pagan agreed, saying clients have to understand agencies arent miracle workers.
As their clients partners, agencies are expected to go beyond the boundaries of traditional advertising efforts. "Agencies cant just communicate their clients value, they need to create it," said Luis Collazo, president of Learning Corporate Consultants. Successful agencies think outside the box with literate participation in their clients business, he added.
Coors Light, Puerto Ricos best selling beer, has developed a series of outside-the-box efforts that help keep the brand strong and its consumers loyal. In partnership with agencies Foote, Cone & Belding (FCB), WING Latino Group, and Empire Entertainment, Coors Light reached and has held the top spot in beer sales for the last five years.
According to Juan Casillas, Coors Light brand manager, FCB is in charge of above-the-line marketing for the brand, which includes TV, radio, print, and outdoor advertising that sells Coors Lights equities. WING handles below-the-line marketing, including tactical efforts, alternative marketing, and seasonal promotions such as this summers Silver Summer and the recently launched Cool Spirit holiday promotion. Meanwhile, Empire organizes certain special events that draw what Casillas called the aspirational segment, 18- to 34-year-old, active people of high socioeconomic levels.
"Our agencies have been very diligent, responsible, and successful in carrying out Coors strategy," said Casillas. "This is a very dynamic market, so we always try to be one step ahead of new trends." Pfizers Viagra has also gone beyond traditional advertising to reach consumers in a variety of ways. With the help of Corporate Communications, Pfizer has sponsored educational workshops about mens health, Internet chat sessions to discuss erectile dysfunction, and the Mens Health Summit, where some 1,000 people went to receive information from health professionals about mens health. "Viagras results show our integrated communications strategy has been key to reaching impressive levels of sales and market share," said Corporate Communications Colon.
Getting it right
The road to implementing marketing strategies that make brands grow starts with establishing clear objectives and sharing them with suppliers. "Agencies and clients must participate in the development of needs and the development of solutions, thats what partnership means," said Collazo.
"Agencies often work in a vacuum, because some clients decide they want to advertise, but they dont know what they need advertising for," said Badillos Alustiza. "Thats when frustration, fighting, and unfulfilled expectations happen."
Fortuño described a procedure of planning, executing, and reacting to address clients needs. Colon agreed, stating the first step is a clear definition of objectives and measurable goals. "Today, many clients face financial pressures to meet their own goals, whether because they have to deliver results to their shareholders, or because their own compensation and bonuses depend on it," said Colon. "This creates a greater focus on results than weve seen in recent years."
That is exactly what De la Cruz and R-G Premier Bank did at the beginning of their partnership. "When we first landed this account we established marketing and advertising goals," said Idalia Quijano, public relations director at De la Cruz Key Communications.
Once goals and objectives are defined, research is the next obvious step. Absolute knowledge of market conditions, consumer needs, and competitors is crucial to developing effective communication. "Some clients see research as a disaster check tool," said Alustiza. "If youre going to invest in advertising, then you have to do research before you develop a campaign, because thats where you learn how to speak to your consumer."
Further, Alustiza said it is disrespectful to develop communications strategies without knowing your consumer first. "If you want to knock on peoples doors, you better know whos behind those doors. Sometimes we think were entitled to climb in through the window," he said. "Allowing that to happen is as much the agencys fault as it is the clients."
"We have to develop creativity with a purpose, not creativity for creativitys sake," said Fortuño. Technical knowledge of the business, be it pharmaceutical, electronics, telecommunications, etc., is crucial to make marketing strategies work. "Most agencies have a variety of clients who require a specialized expertise that some agencies dont have," said one industry source.
A wealth of market information, however, must be complemented with creative work that breaks the clutter, that is disruptive, experts say. "We need to add that 1% of intuition--that magic--that makes us develop advertising that makes us different from our competitors," said Pipo Valderrey, creative director at De la Cruz Group. Such intuitive moves have produced TV advertisements for R-G Premier Bank where services provided at the bank are compared to services provided at an ice cream shop and where a man threatens to commit suicide because his bank neglects his needs.
Another brand that has acquired a reputation for taking calculated risks is Toyota. Daring to launch a car commercial where the car is never seen, or refusing to follow the industry norm by not mentioning the cars features in advertising spots has resulted in an ongoing campaign that reflects Toyotas brand essence and helps break sales records again and again.
Finally, clients must be emphatic about measuring the results of their efforts. "Few clients question who actually saw their advertising," said Carlos Rom. Donald Deutch, CEO of mainland agency Deutch, was recently quoted in Advertising Age as saying marketers shouldnt have to contend with less than the best creative, prima donna creatives, fat account teams, and agency elitism. Agencies shouldnt be allowed to blame poor results on a weak economy he added.
As one marketing consultant concluded: "It boils down to the right people, doing the right thing, at the right time."
Faith Popcorn on agency / client relationships
By CB STAFF
Advertising agencies, beware. According to renowned marketing guru Faith Popcorn, if you keep doing business the way many of you have, youll be dead before you know it.
"Agencies as we know them today are very much a thing of the past," Popcorn told CARIBBEAN BUSINESS. The author of "EVEolution" and "Dictionary of the Future" said many advertising agencies will disappear because of their inability to create effective advertising due to an influx of unmotivated people, and because the industrys billing system has "become all screwed up."
Among the industrys shortfalls, Popcorn named the practice of hiring inexperienced people to run the show. "Any time you hire juniors or less than brilliant people, what comes in is what goes out," she said.
She also blamed companies for refusing to recognize--and pay for--brilliant work. "They should be paying for strategies instead of for the execution of an advertisement. A brilliant strategy is worth a lot of money. In fact, we get paid a lot of money for great strategies," said Popcorn, referring to her company Faith Popcorns Brain Reserve. Agencies react to the lack of support with anger, provoking a give-the-client-what-he-deserves attitude.
Popcorn proposes agencies evolve into providers of total communication solutions, which could range from public relations services to street graffiti. She also suggests clients live with their agencies. "Establish not only a financial but an emotional link. Become friends and know your colleagues childrens names and birthdays. Know that if you succeed, those around you will also be rewarded," she said.
Popcorn added that agencies and their clients need to be on the same side, to stop seeing each other as adversaries, and sit down together to draft specific goals. If those goals are met effectively, they should be rewarded financially, she said. Clients shouldnt be uncomfortable with rewarding agencies for excellent work and providing ways for them to shift the focus from the quest of making a buck, to the search for brilliant, effective ideas.
By LAURA RENTAS-GIUSTI
In 1996, Swedish vodka maker Absolut realized Puerto Ricos great potential as a profitable market.
The Absolut Co. went looking for a local advertising agency that was able to translate Absoluts legendary brand image into executions that were both resonant with the local consumer and up to the high standards of the vodkas outstanding advertising efforts. JMD Communications was the chosen one, and has since contributed to the steady growth of Absoluts sales and brand awareness among Puerto Ricans. In fact, sales of Absolut vodka in Puerto Rico have seen double-digit growth since local marketing efforts began in 1996.
"Absolut is a brand that has challenged us in terms of creativity," said Nelly Acevedo, vice president at JMD. Fulfilling Absoluts expectations requires developing efforts that are unique and build on the brands reputation of creativity, artistry, and high quality. "This client allows our imagination to run wild," she said, adding that the opportunity to work in such terms is quite a treat for a creative shop such as JMD.
"JMD always brings us innovative ideas. After seven years working with the brand, they truly understand it. They are free to come to me with the craziest pitches," said Luis Acosta, brand manager for Absolut Vodka in Puerto Rico.
Beyond developing spectacular advertisements, JMD is also responsible for conceptualizing events that communicate Absoluts brand essence. Out-of-the-ordinary events include Absolut Sandcastles, which brought together renowned local artists to build Absolut inspired sandcastles at the Caribe Hiltons beach, and Absolut Arte en San Juan, a night of alternative art exhibitions in Old San Juan, which have helped build awareness among local consumers of what Absolut represents.
According to Acevedo, ideas are evaluated on the basis of whether Absolut is the only brand to have ever proposed them. Ideas such as Absolut Palomino, a print piece that featured Palomino Island in the shape of bottle of Absolut vodka, and Absolut Exposure, a series of black and white pictures commissioned to local photographer Omar Cruz, have passed through that filter. The Absolut Co.s worldwide curator added Cruz photographs to Absoluts permanent collection of art inspired by the famous vodka bottle.
Most recently, Absolut showed two short films produced by Absolut Pictures during this years San Juan Cinemafest. "Farewell Casanova" and "Beat Crazy" generated a major buzz among moviegoers, who were very impressed with the productions, said Acevedo. Absolut also steers clear of trite bar promotions featuring scantily clad girls offering drinks at happy-hour prices. Instead, Absoluts bar styling subtly and artistically integrates the Absolut bottle into the decor of bars and restaurants such as Wasabi and Baru.
By way of absolute integration between client and agency, the magic occurs. "We truly feel we have participated in Absoluts success in Puerto Rico," said Acevedo. Absolut considers JMD to be part of its own team, said Acosta. JMD executives participate twice a year in regional meetings at which Absoluts representatives in Latin America present overviews of their work and discuss upcoming projects. The local representatives of The Absolut Co. carry out a similar exercise with their team at JMD and their distributor B. Fernandez. "Nelly knows everything I know about the brand, as does our distributor. We have total communication across the board, because otherwise this relationship wouldnt work," said Acosta.
"The key to the brands success has been that integration, which has been there since the beginning," said Acevedo. "They have total respect for our work, which isnt usual in this industry," she concluded.
This Caribbean Business article appears courtesy of Casiano Communications.