Madison Avenue's Travail

BATTERED by the recession and beset by zealous Government reformers, wavering clients and hostile consumer groups, the advertising business is undergoing a painful and probably permanent transformation. The old frothy ebullience has been replaced by a somber sense of reality and not a little anxiety. Says Richard Christian, president of the Marsteller advertising agency: "The whole business is a vast confusion."

The biggest worry is a relentless blitz of Government agencies, led by the Federal Trade Commission, to purge extravagant claims or outright deception in advertising and put more straight information into ads. Under its aggressive chairman, Lawyer Miles Kirkpatrick, the FTC last week hurled its latest bombshell. In an unprecedented action, it proposed that the nation's four largest cereal makers be broken up into smaller companies, partly on grounds that their lavish ad campaigns enabled them to keep out competitors and inflate prices. Kellogg, General Mills, General Foods and Quaker Oats were also accused by the agency of falsely advertising their products as body builders and aids to weight control. The case, which represents a new twist in antitrust enforcement, will almost certainly wind up in a long court battle. It raises a worrisome specter for all corporations that lean heavily on advertising for sales. The FTC is now considering hitting gasoline companies with a similar proposal.

In another startling thrust last month, the FTC proposed that broadcasters be required to give critics of commercials equal time to make counterclaims similar to antismoking ads. Conceivably this could lead to ecologists taking to the air to punch holes in auto and gasoline ads, chemists knocking down mouthwash promotions--and a flock of advertisers fleeing the home screen. The FTC has also called for companies using promotions that it deems deceptive to run "corrective" ads admitting the error. One such commercial is being broadcast for Profile Bread, which was touted by the Ted Bates Agency as a diet loaf, though its only contribution to weight reduction was thinner-than-usual slices. In the corrective ad, Actress Julia Meade flatly admits: "But eating Profile will not cause you to lose weight."

Looming behind these moves is the possibility of even broader Government restrictions on ads as a result of the FTC's recent wide-ranging hearings on the effects of advertising. The findings are likely to lead to tighter restraints on promotional puffery--vague claims that a product is healthier or "better." There also may well be stiffer controls on ads aimed at children and on promotions that baselessly imply that use of a product will bring success, happiness or riches.

The Government's regulatory assault has added substantially to the jitters of the traditionally insecure ad field. In many agencies, all promotions must now be cleared by lawyers. Increasingly, specific claims are being dumped. For example, Wonder Bread has discarded a campaign that drew consumer criticism by asking children "How big do you want to be?" and hinting that the product could make them grow; the new "Fresh Guys" theme features animated loaves in TV commercials. More candor is creeping into ads. Pitches for Sta Dri now note that no antiperspirant really keeps people dry. The product's name, the ads say, should "probably be 'Stay Dryer.' "

Many admen fear that increasing Government intervention could dry up the creative juices. Says William Bernbach, chairman of Doyle Dane Bernbach: "The demand for stating things that are provable will dull some ads and make people reluctant to make some claims that are provable." Chicago Advertising Consultant Robert Humphrey sees an inevitable drift of advertising away from the commonly used motivational techniques aimed at subconscious fears of rejection and desires for security; he feels that agencies will move toward better market research to determine what products consumers really need.

Agencies are also losing their hold on clients. A study by the Harvard Business Review last year found that more than half of the 2,700 business leaders polled thought that too much was spent on advertising, though almost all of them agreed that it is essential to marketing. Many major firms, including PepsiCo, Pfizer and General Foods, are keeping costs down by dividing some of their work among small agencies that specialize in a single advertising function--market research, space buying, copywriting, artwork. These shops work for negotiated fees and have had a major impact on full-service agencies in one key respect: to keep their clients happy, most large agencies have also had to offer separate "`a la carte" services for a usually modest negotiated fee. Thus the flat 15% of billings that advertisers traditionally paid their full-service agencies is disappearing--and with it the fat agency profits.

All this is happening at a time when many agencies are still trying to shake off the effects of the recession. In 1970 the bottom fell out, profits plunged, and an estimated 10% of the agency-business work force lost their jobs. Even now, few agency chiefs expect a buoyant year in 1972. Says Foote Cone Belding President John O'Toole: "I see a gradual return to former levels--maybe not 1969 levels, maybe never those of 1969, but certainly in excess of 1971."

Working to survive in the harsher climate of the 1970s, many agencies are at last establishing modern management techniques--cost control, job profiles and all the rest. Agency chiefs are seeking to make their services more flexible to clients and their promotions more acceptable to Government and consumer groups. Some people in advertising still seem blind to the basic problem. Preoccupied with narrow technical and legalistic responses to their myriad worries, they have not yet grasped the profound change in values that is reshaping American society, putting new emphasis on a simpler life and plainer talk. All this underscores the importance of telling a good, straight story to sell a product.

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