Why don’t ad agencies advertise?

When I first started working as a copywriter in Singapore in 1996, I was asked by my boss, “Since you are the only one with a marketing degree in this agency, I want you to tell me how we can grow our client base. How much time do you need to come up with a plan?”

I answered my boss confidently, “I can tell you right now.” He looked at me and scowled (he does that a lot), “Oh really?” And I told him of my most brilliant plan to boost our sales, “Boss, we should advertise! None of our competitors are advertising. Let’s be the first one to do that. It will give us a tremendous first mover advantage.”

The torrent of swear words that came hurtling at me after that was like a mighty wave of tsunami crashing down on poor me. I will skip the unprintable parts and tell you the gist of it. “We can’t advertise, you idiot! Clients won’t read your advertisements. The only people who will read are competitors!”

What Do You Mean Nobody Reads Advertisements?
We have no problem recommending TV commercials that cost $200,000 each to produce (and that’s a lot of money in 1996), and we don’t believe in advertising? What gives? If nobody reads advertisements, why are we telling clients to spend tons of money to produce advertisements and then ten times that amount to buy media space? Isn’t advertising the way great brands become great brands? I never got my answer from that boss of mine. A year later I left the agency.

I applied for copywriting positions in company after company and I always get asked this question without fail, “How many awards have you won?” What does it matter if I win awards or not? I finally found a ‘mini-conglomerate’ that didn’t care if I have won any creative awards as long as I can produce ads that sell. Within 6 months I became head of marketing communications. But it still did not answer my burning question: How come advertising agencies don’t advertise?

Not A Very Honest Profession, It Seems
Took me a long but I finally figured it out thanks to this brilliant book called The Rise Of PR And The Fall Of Advertising by Al Ries and Laura Ries. Advertising agencies don’t advertise because that is not the way brands are built. Advertisements are what you say about yourself and what you say about yourself has zero credibility. In fact, I saw one Gallup Honesty Survey that asked the American public to rank what an honest profession is and nurses ended up at the top with a 79% rating. Right at the bottom, with a 9% rating are car salesmen.

The second most dishonest profession is advertising practitioners with a 10% rating. In fact, lawyers and politicians are ranked higher in the honesty rating, at 18% and 20% respectively. In America, where people don’t think too highly of lawyers or politicians, they are ranked as more honest than advertising people! So, if people perceive advertising to be a dishonest profession, what are the chances that they will believe what they see in an advertisement? In fact, ask yourself this: When was the last time you actually read an advertisement? And I am not talking about your competitors’ ads. When?

Brands Are Built With PR But Maintained With Advertising
PR is hard to get. PR is hard to manage. PR is slow. PR is frustrating. PR is hard to control – one of the most common complaints I have heard is that you tell a journalist one thing and he/she will write something else. But PR has one thing that advertising doesn’t have – credibility. So, you have no choice but to rely on PR especially when you are small. But eventually, you will run out of PR ideas. All brands do. That is when you kick in the advertising to maintain the brand. Hopefully, the brand would have been established by then.

The simple answer to the question of why ad agencies don’t (or rarely) advertise is that advertising is not the way to build an advertising agency brand. PR is. So, how do ad agencies get publicity? By winning awards! And all these creative awards are not necessarily indicative of the advertisements’ effectiveness in building the brand or in boosting sales. But they look impressive. When an ad wins an award, a lot of publicity is given to the ad and by extension, the ad agency that created it. This is what builds the brand. I am not saying that advertising is not important. It is. But its role is one of maintaining the brand, not building the brand.

And if advertising is the way to build brands, how come even top ad agencies hire PR firms? When I met the Asia-Pacific chairman of a top UK agency at a lunch that was arranged by a friend, who is a PR consultant, I asked the chairman of this ad agency how he knew my friend and he told me, “Oh, they are our PR firm.” Then I asked him, “Why does an ad agency, especially one as successful as yours, need a PR agency?” The chairman looked at me and smiled before he answered, “I know what you are driving at, Jacky. I have been warned by your friend. And yes, I have read the same Al Ries book! Let’s just say that we all need a little bit of PR help every now and then and leave it at that shall we? Let’s enjoy lunch instead.” There you have it.

Jacky Tai is a Principal Consultant of StrategiCom. Jacky works with a crack team of talented consultants and researchers to help B2B companies across various industries gain an unfair advantage over competitors by effectively differentiating, dramatising and communicating the brand. Jacky is the author of highly-acclaimed branding books – Transforming Your Business Into A Brand (2007) and Killer Differentiators (2008) and B2B: 10 Rules To Transform Your Business Into A Brand. He can be reached at jacky.tai@strategicom.com.