Tuesday, June 26, 2007

Not made in China.

It seems like virtually every day there's a story in the news about something that's made in China that falls apart, is full of some toxin or causes an unseemly, almost medieval illness that most people in the West regarded as all but eliminated some decades ago. Today's news item is about the recall of almost half-a-million tires that are of the "shred it yourself" variety.

Here's the point: cheap is cheap. Whether it's crap you buy at Wal-Mart or an advertisement, you get what you pay for.

During my career I've often been told by clients that the agency I represent is too expensive. Generally, when agency account people or finance people hear such an accusation, they respond by squeezing prices, ie. they mark down what they sell. Marking down prices, selling cheap is the best way to make your product or service a commodity. And before long, if it isn't happening already, some sharpie in a well-tailored suit and a Harvard MBA will start saying how ads can be constructed much more cheaply in Bangalore. Now, this is fine, if you're in the commodity business. But unless you suck, you're not a commodity.

Not all that long ago when I was at Ogilvy I wondered what would happen if we created and ran an "Ogilvy ad" for Ogilvy: "Why it makes sense to choose the world's most expensive ad agency." It makes sense because it winds up that expensive agencies are, in the long run, cheaper. Ads are more effective, sales and a company's position in the marketplace are enhanced. Of course, such an attitude is contrary to how business works today. "Look," says the junior brand manager, "I schtupped the agency and saved $xxxxx." Somehow that attitude is supposed to result in effective work. I'll believe that when it snows in August or when I buy Chinese radials.

1 comment:

tore claesson said...

When the only result that counts is the result for the next quarter, it's unfortunately all too often easier to achieve a seemingly good result by cutting a lot of corners. Quality, or the lack thereof, rarely shows in such a short time. That's what's so tempting about it. It's deceiving. Some argue that this short term view will create a certain discipline which will lead to strong long term results. I doubt it. It favors defensive acts.
It's unfortunate but true that what people like David Ogilvy, Bill Bernbach, Leo Burnett, and a few others, ones built, is now being razed.
There are no real leaders in our industry today. Nobody who speaks out about anything with a perspective longer than a weekend.
David Ogilvy spoke out about the industry, the big issues in advertising, and thereby gained trust for his agency. Now we're all pitching each other to death. As often as not built on price at the end of the day.