Sir John Hegarty, o ne of the leading creative people in advertising for several decades, gave an interview to the BBC earlier this year in which he said that new ways of advertising on digital platforms like social media sites struggled to create campaigns that captured the national imagination and make brands famous anymore. I know Sir John well having with collaborated with him on two separate occasions. Firstly, shortly after I joined Sony UK to be Managing Director of its Consumer Products Company in 1988, we moved our considerable advertising budget from Boase, Massimi & Pollitt (BMP) to Bartle, Bogle & Hegarty (BBH), the agency that Sir John had helped found. At this time BBH was particularly famous for some of the most memorable adverts of the 1980s and 90s. In the 1980s he masterminded the “Vorsprung durch Technik” (which translates as “Getting ahead through technology) campaigns for Audi, the car manufacturer. He had seen the slogan written on an old poster when visiting an Audi factory in Germany. Another famous ad Sir John made in 1985 for Levi's Jeans where the model Nick Kamen stripped down to his underwear in a launderette to the tune of Marvin Gaye's “I heard it through the grapevine
”. These famous adverts were broadcast on prime-time TV but very little like that can be seen on today's television.
The second time I worked with Sir John was when we were both members of the Advisory Board that helped Prince Charles, as he then was, to launch Duchy Originals, a range of food products that were aimed at setting a good example for farmers and others to understand that good food can be sold at a premium in this country if you market it well enough. Duchy Originals made significant money for Prince Charles’ various charities.[i]
For several years now digital advertising expenditure has exceeded that of traditional media and there may be some logic to this but it isn't the way to build brands. Sir John says that one of the most profound and fundamental things you can say about the value of a brand is that it is made famous by people who will never buy it. He gives the example of Rolls Royce which most of us will never buy but all of us know that it's the most luxurious car in the world. Fame is important because fame adds value and only broadcast advertising does that. Brand fame affects customer decisions, it allows brands to resist competitive pressure and it allows premium pricing. When people talk about your ads that is free advertising but on social media you are talking to a small group of people and you never go bigger than that.
Advertising has been with us in various forms for centuries if you just think about the signs outside a shop and then there's the shop window which attracts people to come inside and buy. Overtime we've seen the development of the written press, billboards, radio advertising, advertising in the cinema and then on television but all of these media are still around. They may be of varying importance, but they are still there for brand managers and advertising agencies to use.
Although I am no longer directly involved in developing marketing campaigns I am still in touch with people in the industry and I find that many seem to think that digital is the only game in town but then that means they don't really understand that while techniques can change the principles by which brands grow remain unchanged and if you don't take that seriously then your brands won't grow.
But I do recognise there is a problem in making this argument although it is certainly correct. That problem is that increasingly the nation's attention is fixated on its phones and fragmented into millions of personalised social media feeds. In such an environment the big budgets may not actually reach large audiences to create the brands of the future. And that all goes badly for business as a whole and therefore for the economy. Gross Domestic Product (GDP) is a measure of the size of the economy over a period of time (normally a year). It is calculated in three ways. The production or output approach is the sum of all the value added through producing goods and providing services (i.e. the market value of what is produced minus the cost of producing it.) The income approach is the sum of all the income earned by companies and individuals from offering the same goods and services. The expenditure approach is the sum of everything spent on finished goods and services. In theory all three should produce exactly the same result but the difficulties of collecting data means that they may not. Marketing and brand management is there at the centre of all three approaches. The market value added can both be boosted by good marketing and brand management. Similarly, income earned by companies and individuals from offering a goods and services can also be boosted by good marketing and brand management. The expenditure approach, the sum of everything spent and good marketing and brand management can drive this up. So, if we are losing the idea of how to build brands, we are losing value added, income and increased expenditure. Perhaps that’s one of the reasons why GDP per capita has been in decline in the UK for 15 years or so.