Jun 19, 2004

nightmare on madison avenue

The latest Fortune has a great piece on the state of the advertising business by Devin Leonard titled Nightmare on Madison Avenue. (Link most likely only valid for Fortune subscribers.) In it, Leonard deftly examines the impact that the decline and fall of the mass media is having on ad agences.

No surprise for anyone who's been watching the business over the past few years, but it all comes down to (a) price pressure...

Some procurement people are squeezing their ad agencies in ways that their marketing department associates never would have dared. Last year DuPont's purchasing department made agencies competing for its consolidated advertising account bid against one another in a live online auction. The winner of the $70 million account was Ogilvy & Mather. Scott Nelson, DuPont's global brand manager, is quick to say that price wasn't the only deciding factor. But it was painful for some people in the advertising business to see the late David Ogilvy's agency treated like a furniture vendor.
...and (b) the shift in power from the creative to the quant.
The ascension of the media buyer completely disrupted Madison Avenue's old assembly line. "We're getting to the point where the media plan is done first, and the creative is developed behind it," says Verklin. "That is a radical vision for the advertising business that would have been unheard of five years ago." He adds: "We used to be the dorks. Now we're driving the whole advertising process."
Leonard nails it in the close, commenting on the upcoming Advertising Week, a September 2004 festival of Madison Ave. self-pleasure, featuring "some of the advertising world's most cherished icons," like Mr. Peanut, the Keebler Elves and The Jolly Green Giant. And he does it without even having to utter the phrase "self-involved baby boomers."
So much of Advertising Week celebrates a vanished era when eccentric craftsmen ruled the business, media buyers knew their place, and 90% of the public watched prime-time television. Yes, that was a better time for many people in the industry. But it's gone.