Survey Finds Advertising Important, But Flawed

Many C-level executives think the advertising industry has a poor grasp of the business issues confronting organizations such as theirs, according to the latest study from Forbes.com and Euro RSCG Worldwide.

Most of the 9,000 senior executives polled agreed that advertising is an important driver of corporate success. In fact, 72 percent think advertising and marketing can have a substantial influence over the way the market perceives their company; while 62 percent feel their advertising and marketing programs have a substantial impact on sales. Researchers surveyed executives in six countries: the U.S., the U.K., China, Japan, Germany and Mexico.

But when it comes to effectiveness, the respondents were split — about 42 percent felt that “the advertising industry seems to have a poor grasp of the business issues confronting organizations like mine”, while just under 40 percent think “external advertising and marketing services bring a valuable perspective to our advertising and marketing issues.”

Those in the United States, UK and China tend to lean toward the “poor grasp of issues” opinion while in Japan, Germany and Mexico, the opposite is true, with more respondents in the “valuable perspective” camp. Japan leaned most heavily in this direction, with about 20 percent more respondents feeling positive toward advertising. In Germany, 10 percent more felt advertising brought a valuable perspective; in Mexico, 5 percent expressed that view.

“I think there are a lot of issues around this,” said Jim Spanfeller, president and CEO, Forbes.com. “Part of this is people saying that their agencies don’t ‘get’ their business. But I think a lot of them are saying that they don’t ‘get’ the success criteria that the people the agencies are serving are dealing with — which should really be around selling things.”

One pitfall comes when agencies fall prey to the notion of creativity for creativity’s sake as opposed to creativity for actually selling something, he said. On the other side of the argument, there are many factors that affect success that are hard to measure when there is so much out of the agencies’ control, he said.

“In the past, it was OK for the age-old quote about half our advertising dollars being wasted. That’s not good enough any more,” Spanfeller said. “The stakes are too high.”

Respondents were also divided on who should be making creative decisions, with approximately 30 percent saying “Creative decisions in advertising and marketing are best left to creative experts — external agency partners and internal marketing staff,” while nearly 40 percent disagreed with that statement.

The split is likely a result not only of cultural differences, but of industry norms, Spanfeller said. Some companies, like packaged goods companies, educate and nurture their senior management focusing on brand management, which would lead those executives to want to have more of a hand in advertising, he said. Other companies that are more engineering-based would have less of a feeling of ownership of advertising and marketing, he said.

The study also proved what it set out to confirm — if you’re trying to reach C-level executives involved in decision-making, the Web is the place to look, Spanfeller said.

The survey found that top business decision-makers see the Web as the most important source of information about business. The gap between the Internet and other media is even more pronounced in the UK, Germany, China, Japan and Mexico than in the U.S.

“This is all about the weight of the evidence. We keep adding incremental evidence that supports a few theories — that people are going to the Web more and more; that senior business decision-makers are among the highest numbers of those people; and that they now see this medium as the most important medium in terms of business news and analysis,” Spanfeller said.

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