Five things you didn’t know about advertising agencies: 1990s (1)

1/ The 1990s was the decade that the tide turned for ad agencies and the business is still trying to recover from the reverses it suffered. Advertising, or paid-for promotion as we might call it, is actually booming; the biggest companies in the world including Apple, Microsoft and Google all place advertising at the centre of what they intend to do. Various studies from the US place the turn of the tide in 1988 which followed a period when broadcast and print advertising and the revenues of ad agencies had comfortably outpaced the rest of the economy for over a decade. Many American admen, with their reverence for the findings of market research, had always sought to make advertising a science because that’s what they thought their clients wanted. Indeed they did, but they found the solution (they thought) not in advertising but in direct marketing. By the end of the 1980s ‘promotions’ were taking 30 per cent of client marketing budgets and direct marketing was taking by far the biggest chunk of that.

2/ And creative ad agencies were finally paying the inevitable penalty for hubris. At the fag end of 1994 Saatchi & Saatchi founder Maurice Saatchi (now Lord Saatchi) was rudely defenestrated from his empire (once the biggest ad agency in the world) by a shareholder revolt led by Chicago fund manager David Herro. The company’s profits were collapsing as huge earn-out payments became due. He was followed by brother Charles (the original guiding genius who had by then tired of advertising) and loyal old hands Bill Muirhead, Jeremy Sinclair, David Kershaw and others. They set up M&C Saatchi, Publicis Groupe eventually bought the rump. But the flashy Saatchi way, based on clients paying whatever the agency asked for its creative wizardry, had run out of time.

3/ The early 1990s saw a recession in all Western economies and ad agencies suffered particularly badly as cost-conscious clients were attracted to other media, like the nascent internet and our friend direct marketing. In the UK particularly agencies reacted foolishly, sacking all the middle-ranking people they could afford to, leaving the agencies with out-of-touch senior managers (who made sure they didn’t sack themselves) sitting on top of a collection of juniors. The end result was that senior client managers began to look elsewhere for their advice, chiefly management consultants and investment banks.

4/ But a little of the old magic still prevailed and politicians still took advertising wizardry seriously even if a declining number of clients did. New Labour in the UK, led by about-to-be PM Tony Blair and his sidekicks Gordon Brown (yes, really) and Peter Mandelson were big fans of TBWA creative director Trevor Beattie (Simpsons version pictured) and planner turned researcher Peter Gould. Beattie, who entertained and amused the decade with his campaigns for Wonderbra and French Connection (fcuk) supplanted the long-suffering team at BMP to run Labour’s triumphant marketing campaign in 1997. Gould, who had toiled at some not especially famous agencies, introduced the joys of focus groups to New Labour, earning him an eminence (he’s also a Lord) he still enjoys in some Labour circles today.

5/ So was there any decent advertising in the 1990s? Well there was but it’s amazing how little of it lingers in the mind. Agencies lost their confidence and began producing what they thought their clients wanted rather than what they wanted and thought they could sell to their clients. This might sound daft but it’s exactly what investment banks on Wall Street and in the City of London do today and look how much money they make. But Renault scored a great hit with its ‘Papa and Nicole’ mini-stories from Publicis. There’s a story that this was inspired by a porn film some creatives were watching in their room at Cannes, In the film a tryst takes place in the dark (well it was the 1990s) and when the light comes on she says ‘Papa?’ and he says, ‘Nicole?’ This inspiration could account for the slightly incestuous tone of the ads:

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.