The advertising industry is launching a charm offensive. Industry body the Advertising Association last week announced a three-year campaign to improve its image with legislators and the general public.
The initiative (MW September 23) comes at a time when advertising budgets in general are on the increase, and the industry seems to have the ear of the Government, which supports the current system of self-regulation through bodies such as the Advertising Standards Authority and the Independent Television Commission.
So far so good. But all is not well. The ad industry’s image took a knock this week with the release of a report by accountants Willott Kingston Smith. The study revealed that the top 50 agencies were poorly managed and over-staffed, with costs running out of control.
The research shows the turnover of the top 50 grew by five per cent in the past year, to &£4bn, but profit margins shrank from 6.8 per cent to 6.5 per cent. Most observers agree a well-run service industry should be clearing 15 to 20 per cent.
The industry’s image with the wider public is harder to gauge but is by no means as good as it might be. The consensus seems to be that although the public likes ads, it is less sure about the people who create them.
If the average person has an image of an ad executive at all, it is likely to be a negative one. The stereotype is the slimy, manipulative adman, from films such as “How to Get Ahead in Advertising”.
Research on the subject is thin on the ground. According to Mori, 72 per cent of 15- to 24-year-olds and 85 per cent of over-25s say they are never tempted by advertising – an indication, if nothing else, of an awareness of the power of advertising and a desire to avoid being sucked in.
The real threat to the industry comes from Europe.
When Sweden takes on the presidency of the European Union in January, it hopes to introduce a total ban on television advertising to children, currently worth &£70m in ad revenue in the UK.
Add to this calls for tighter restrictions on alcohol advertising and proposals to regulate car ads, and the UK’s liberal regime starts to look increasingly out of step with the rest of the EU.
In common with many in the industry, Keith Weed, chairman of Elida Fabergé and vice-chairman of the Advertising Association, believes advertising has not done a good job of selling itself.
He says: “The AA has been a good industry body but it has been issue-based. It has targeted ad hoc issues at different times. There has not been an initiative to communicate on a more general level.
“I think the industry is misunderstood by the whole spectrum of target audiences, from business to the general public. Nobody has ever tried to explain it.
“There has been no communication from anyone about the industry and within that void people draw their own conclusions. That’s how misconceptions arise.”
Institute of Practitioners in Advertising chairman Nick Phillips believes the industry should also target its message at the wider public. He says: “We haven’t been idle in getting the message across to legislators and opinion formers, what we need is a wider background noise.
“And we are doing it at a time when the Government is very favourably disposed to the advertising industry.
“The vast majority of consumers say they like advertising. And the City has realised the value of having brands on the balance sheet.”
Others believe the AA should widen the focus of its campaign to include marketing as a whole.
Raoul Pinnell, global head of brands and communication at Shell International, even proposes a GCSE in marketing to educate young consumers in the ways of the market.
He says: “Marketing is an extremely potent force for competition. We have just seen the crumbling of totalitarian states, the dismantling of inefficient nationalised industries, and marketing has played its part and the customer has gained. There have been benefits, it has been a force for good. It has been part of the process. It’s time to be more assertive about the whole issue.”
Broadcaster Melvyn Bragg believes the public’s attitude to advertising has undergone a sea change since the BBC started promoting its own programmes.
Although Bragg is not supporting the AA’s campaign directly he addressed the organisation’s reception at last week’s Labour Party conference, in Bournemouth, on media funding.
He says: “Advertising and television have a great deal in common. They are both trying to reach audiences through films – they are both trying to maximise audiences through films.
“Advertising is obviously trying to show the advantages of a product, but I think the broad aims are similar. I would like to get away from the idea that we are in opposition.
“It’s not just about selling products, ads are about presenting a clear picture. You don’t have to buy a Rover car but you can still enjoy its advertising. I have never drunk lager in my life but I can still find the ads entertaining.”
He believes that advertising has a bad name in TV, but “there has been a silent revolution”.
He adds: “I don’t think the BBC should be commercialised. I have always supported the licence fee. But I think people have got used to the idea of it being advertised.”
Bragg’s South Bank Show is sponsored by Anderson Consulting. He claims the company has never sought to influence editorial content.
He adds: “It has worried once or twice but it hasn’t influenced what we have broadcast. People have every right to fall out.
“There are obviously going to be spats over the editorial line. We are no different from the broadsheet newspapers in that respect.”
If the ad industry can win the economic arguments, it may face a stiffer test on moral issues. The debate about advertising to children, in particular, is highly charged.
The UK industry argues the Swedish ban is based on outdated research and young consumers are far more sophisticated than we give them credit for. But some of the arguments have a familiar ring to them from the debate on tobacco advertising.
Action on Smoking & Health (ASH) spokesman Clive Bates does not support a ban on ads to children and shies away from backing more legislation on alcohol ads.
Like Bragg and most other commentators, he argues tobacco is a special case. But he does believe the advertising industry is in danger of repeating some of the dubious arguments it used over tobacco in support of advertising to children.
He adds: “The whole debate about tobacco advertising worldwide is couched in terms that are aimed at children. It is not a great step to apply that view to other products. In other words, using impressionable people to achieve a commercial end.
“The tobacco industry has argued that advertising is information, as if they are making a public service announcement. But there’s not one iota of information in a tobacco ad, they promote exotic images and associations.
“The argument that we oil the wheels of commerce by helping people make choices is nonsense. People are buying brands, not products. They are buying into brand values. With tobacco you are taking what is essentially quite a dull product and making it more attractive and interesting.
“It is much too simple to say the product is there – take it or leave it. We are just providing information about it. The product and the advertising are integral.”
The big question facing the AA is whether to launch an above-the-line campaign.
Mori chairman Bob Worcester says: “It would be a questionable strategy to target the public and the legislators. I don’t think it would win over those in the corridors of power.
“It could be seen as trying to influence them through the public, because the public will not fight their corner for them. It’s not going to be like banning fox hunting.
He adds: “Advertising is accepted but there is no involvement. To be effective, people have to be aware of your industry and they have to feel involved in it.
“They must feel that it will do something for them, make them wealthier, prettier or healthier. The AA is going to do an awareness building exercise, but unless you have involvement, unless you can say advertising saves you money and the like, then it simply won’t work.
“The ad industry should get the message across of what life would be like without advertising.”
Liberal Democrat peer Tom McNally also believes a public charm offensive would be unwise. He says: “There is always a desperate desire for creative industries to be respected and taken seriously.
“It is in the nature of a creative industry that it is going to have a slightly maverick reputation. I think the reputation it has with the general public is about right. People appreciate its creativity and understand the part it plays in a market economy. But I don’t think advertising is ever going to carry great clout in the council of the nation.
“To be well-paid and have fun and lead a glamorous life and to be loved is perhaps one ambition too many. The Advertising Association as a professional body is well advised to carry out a mission to explain, but it should not get carried away.
“I don’t detect any great hostility to advertising in this country, but to aspire to anything higher than that is perhaps not advisable.”
The Government’s relationship with the advertising industry is sure to be tested over any possible EU clampdown as, not for the first time, New Labour finds itself torn between the moral high ground and the demands of business. But the AA is confident it can win the arguments.
It may find it has a tougher time winning over the public. Being a successful salesman is one thing, making people love you for it is another.