Back to the Hard Sell for a Lean Industry

It once seemed that the party on Madison Avenue would never end. For almost a decade, openhanded corporate clients threw dollars around like confetti to promote their products. Advertising agencies grew fat; creativity was in full flower. The most sought-after agencies turned out bright, playful ads designed to put consumers in a happy mood: Alka Seltzer's "Try it, you'll like it"; Lay's potato chips' "Bet you can't eat just one"; Noxzema shaving cream's "Take it off, take it all off."

Then two years ago, with the onset of the nation's deepest postwar recession, the balloon burst. As costs skyrocketed and the flow of corporate promotions slowed, the advertising business ran into trouble. Today, after struggling through one of the worst periods in its history, advertising is far more sober and hungry than it used to be.

Admen estimate that as economic recovery continues, real 1976 billings, discounted for inflation, should rise 4% to 5% over the year before, producing a dollar total of about $16 billion. Even that moderate advance would be a major improvement over the past two years. In 1974, billings amounted to $13.6 billion, which in real terms represented an actual decline from the previous year of 7%. Last year ad agencies took in $14.6 billion, but the increase in dollar totals did not match the rate of inflation, so again real billings slightly trailed those of the year before.

Political Help. Bad as it was, last year would have been much worse except for some promotional windfalls. The auto industry, caught with a massive pile-up of unsold cars, launched lavish ad campaigns to boost sales by offering rebates. Bicentennial promotions also helped. But the most surprising source of ad revenues was the spate of new brands, from toothpaste to cigarettes, turned out by companies seeking a sales edge in a newly competitive climate. In all, 1,023 new brands were introduced in 1975, the largest annual outpouring in twelve years. This year, the pace of new-brand offerings is slackening, but ad revenues will be swelled by candidate spending for political pitches during the election campaign.

Despite the current upturn, most agency chiefs agree with Marvin Sloves, president of Scali, McCabe, Sloves: "Advertising is going to continue to be a tough business in which to make a buck." Tight budgets, cautious clients and a wary buying public have wrought substantial changes in the way Madison Avenue operates.

Now, the watchword is austerity. To make ends meet, agencies have been forced to slash their staffs from an estimated 41,000 five years ago to 36,000 now. Advertising Age, the leading trade publication, found in a recent survey that 77 major agencies now average about four staffers for every $1 million in billings, the lowest ratio ever. In 1970, agencies generally had six employees for every $1 million in billings.

John O'Toole, president of Foote Cone & Belding, considers the new leanness healthy. Says he: "A few excellent people are better than a lot of O.K. people. In the '60s, there were junior assistants assisting assistant account executives who were assisting the account executive, and between them they were slowing down the process."

In this new climate, the largest agencies generally have managed to maintain their relative shares of client dollars; J. Walter Thompson, the doyen of the agency business, clung to its No. 1 position last year with $900 million in worldwide billings, followed by aggressive Young & Rubicam with $800 million and McCann-Erickson with $775 million. But in an era of uncertainty, even Thompson's primacy is no longer as secure as it once was. The agency now ranks second behind Y & R in U.S. billings and second to McCann-Erickson in foreign volume, though ahead of both in combined U.S.-foreign business.

Below these top-ranking few, some small agencies have folded up, and some bigger ones are changing their approach because they have lost their fame as "hot" shops. Doyle Dane Bernbach, which produced the memorable "Lemon" ads for Volkswagen and the "We try harder" slogan for Avis, now stresses its media-buying and consumer-research capabilities, as well as creativity, to clients. Says President William Bernbach: "Our job is to kill the cleverness that makes us shine instead of the product."

At the same time, new agencies like the seven-year-old Scali, McCabe, Sloves are zooming to the forefront with a tough-minded style that stresses product features. The agency and its principals--Ed McCabe and Marvin Sloves--pitch for Volvo and have brought the brand name to the poultry business with fabulously successful ads for Perdue chickens. They feature a squeaky-voiced Frank Perdue telling consumers with mock solemnity that it "takes a tough man to make a tender chicken" and insisting that his birds are more pampered than the people who eat them.

The approach is changing largely because agencies are faced by increasingly demanding corporate clients who find the consumer more inscrutable --and skeptical--than ever. They tend to press for the safe old selling ways of the '50s, when the focus was squarely on the product, often to the exclusion of humor, mood or elegance. The clients also insist on more research. Says Jerry Della Femina, head of Delia Femina Travisano & Partners, who is currently working up ads for Emery Air Freight, a forwarder: "Everything is tested, usually in small cities instead of big markets to hold down marketing expenditures."

The most obtrusive ads are showing up on television. Agency chiefs and their clients like to call the new approach "realistic," "tough" or "consumer oriented." but to the public the end result seems nothing but the plain old hard sell. It is exemplified by Foote Cone's loud "Shout it Out" commercials for a stain remover and the "Plop, plop, fizz, fizz, oh what a relief it is" jingles created by Wells, Rich Greene's President Charlie Moss for Alka Seltzer--a far cry from the entertaining commercials the same agency turned out for the same product a few years ago.

More and more agencies are reaching for the hoariest devices to use in their commercials. A growing number of ads stress numbing repetition of the brand name; a Purina Kitten Chow commercial mentions the product no less than a dozen times. Because of rising television costs, the old 60-second commercial is fading, and increasingly repetitive messages are being crammed into 30-second time slots. The old-fashioned celebrity testimonial is also back in force. Gregory Peck touts Travelers Insurance, Rex Harrison pitches for Chrysler Corp.'s Aspen car, and Muhammad Ali spouts poetry while shadowboxing for Brut cologne.

No Fun. In print, ads are getting wordier in an effort to overcome consumer wariness. Some Ford ads of the early 1970s had few words, and these said little more than that the cars were beautiful. Ford ads today are chockablock with facts about miles per gallon, front disc brakes and chassis design. Some admen themselves worry about the trends. Says Copywriter Norm Muchnick of de Garmo agency: "a good short print ad even today will sell better than a long dull one and always will."

There is evidence that for the short run, the flat-footed approach does move some products. But such tactics run the risk of angering the public. And that eventually may translate into more government restrictions. Says Delia Femina of the new ad scene: "It's a shock to see so much crap on the air. Advertising isn't fun any more."

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