Print Outlook 2005 Conference: Mantra of Basic Marketing & Specialization
The annual NPES sponsored Print Outlook Conference held in Washington DC drew a little over 100 suppliers, journalists, and consultants. This was down somewhat from earlier years perhaps due to lack luster expectations for the near term economy; no White House briefing being included in the agenda as the Executive Branch is getting reorganized following the election; or as Conference Chairman Frank Romano opined, "Management attention is on improvement not innovation." This was one of several trends which he observed in his consulting and speaking engagements with printers throughout the world and pertains to all conferences not just Print Outlook.
Keynoter Joe Cappo, retired publisher with Crain Communications and Past President of the International Advertising Association spoke on "Print's Future in Publishing and Marketing." To highlight how advertising agencies are under tremendous costing pressure he stated that four major global ad agencies control 50% of the ad media in the world and 80% of the domestic market share. And this consolidation occurred only in the last 15 years.
The future business model for ad agencies is comparable to that of travel agencies and stock/bond brokerage businesses according to Cappo. Huge volumes of these later two service businesses have vacated to Internet purchasing and trading. In the old days ad agencies could charge 15% commission override on their media purchases. Today their revenues are limited to an hourly rate for their creative work provided and 2-4% override commission on media being bought unless they can convince smaller vendors to give them some type of "favored vendor" rebate. Cappo feels the overwhelming reason for this deterioration is "clients are demanding accountability." This is difficult to ascertain when the ad agencies emphasis television which is difficult to measure from an advertising return on investment perspective. As a result Cappo concludes, "The average agency-client relationship is now only five years."
He feels that direct marketing media will continue to grow "because it is accountable." He added, "Sales promotion will grow even faster with more integration between various media." Niche magazines will tie in with the Internet. For example, both Travelocity and Amazon now have their own magazines.
Cappo remarked that brand awareness is moving from the manufacturer to the retail chain. For example, the largest selling dog food, Old Roy, is Walmart's private label and receives no advertising support at all. Another example is the mega car dealer that now dictates terms to General Motors and Ford.
