Tuesday, October 23, 2012

The $ticky Wicket


You hear about another one, it seems, every day.  That advertiser leaving this agency.  Or, this advertiser leaving that agency.

In the last few years, the tenure of the client/agency relationship has declined at an astounding rate.

Why?

Perhaps because clients are searching for the added value that agencies always promise they’ll deliver.

But seldom do.

To most CEO’s, this added value is loyalty to their brand.  Not too much to ask for when you consider that it costs six times more to obtain a new customer than it does to retain a current one.  When agencies fail to deliver loyalty through advertising, advertisers are forced to create loyalty through discounting.

A fix, perhaps.  But, short term at best.

And one not especially encouraged by Wall Street.  After all, revenue generated through cost reduction is valued only half as highly as revenue generated through full priced purchases.

And therein lies the rub.  For if a CEO’s objective is to increase shareholder value by building loyalty to the brand, advertising has missed the point.

After all, the added value that consumers are looking for is not a monetary value from a company. 

But rather, a human value from a brand.

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