[ MEDIA MESSAGES ]

Ad agencies in
tune with times

Milici Valenti Ng Pack's president
says clients want more value and ad
agencies must find ways to deliver it

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By Erika Engle
eengle@starbulletin.com

The advertising industry has changed considerably in the last 10 years, "but even more so in the last five," said Nick Ng Pack, president of Milici Valenti Ng Pack Inc.

Clients are looking for more value, and that has ad agencies "doing lots of things these days that would have been inconceivable 10 years ago," Ng Pack said.

Apologizing for a cliché, Ng Pack said agencies need to provide integrated solutions for clients, and some agencies have added Internet and other specialty departments and have developed increased expertise in promotions.

For instance, in conjunction with McDonald's Restaurants of Hawaii, Milici Valenti Ng Pack developed the McExtra card customer loyalty and reward program, launched five years ago.

"They had a semblance of the technology, and we weaved it all together," said Ng Pack. "That's not advertising, it's a whole different marketing approach, which combines technology and promotions and leveraging of strategic alliances."

STAR-BULLETIN In today's world, getting advertising or a message to the masses takes a shrewd marketing approach, making use of technology (such as cable), promotions and the leveraging of strategic alliances.

The changing landscape of media ownership has also changed the way agencies place advertising.

"These days when we do a buy, we don't approach a radio station or magazine; we will most likely deal with a holding company like Viacom or whatever. They control a variety of media outlets from stations to outdoor to magazines," said Jay Talwar, director of account service at MVNP.

The ad placement can be packaged, which allows more efficient, multimedia buying and can also afford the agency and its clients the opportunity to "influence and impact in programming content," Talwar said, "getting the message into the editorial (content)."

It is more than a well-placed widget in a TV show or movie.

Talwar cited an example where a visitor's bureau sponsorship might influence the content of a show during production by offering information of interest to the intended audience. Exposure then comes in the show's content as well as in commercials placed during the breaks.

The content of an advertising medium is also of crucial consideration.

STAR-BULLETIN / 1952 Technology, and the way people get their media messages, has come a long way since Dec. 2, 1952, when crowds gathered at Kapiolani Furniture Store at 3654 Waialae Ave., to view KGMB-TV's first television broadcast.

Thought is first given to the desired audience because the messages must reach the right people, but secondary to that, Ng Pack said, is the quality of the content. "A high-quality environment enhances our message ... we've seen rags go out that are advertising-driven and we don't want to be in those."

As the industry has changed, the economy of it has been in tumult. The dot-com boom caused what Ng Pack called artificial inflation.

"There was so much money flying around," he said. The dot-com bomb then burst the level of ad revenue available and "all that money won't come back again," Ng Pack said.

Hawaii was largely bypassed by both the boom and the bust, which was a mixed blessing as the state did not see voluminous ad spending increases, but also did not experience as deep a decline as was seen nationally, he said.

On a national level, the radio industry, for example, had suffered through some 18 months of declining ad revenue until the hemorrhaging seemed to stop in July 2001.

The Radio Advertising Bureau reported that July figures showed the slide appeared to be waning.

The assertion was supported by August figures reported early the next month, right before the terrorist attacks on Sept. 11. Then the low point plummeted even lower.

"Locally the industry is still pretty weak. There is still weakness and consolidation going on," Ng Pack said, citing the purchase of Myers Advertising Inc. by Ogilvy & Mather Hawaii earlier this year.

"Some other smaller agencies are having financial problems, trying to survive in this environment," he said. At least one has approached his agency to explore any interest in buying them out.

Locally, ad revenues are off about 5 percent from last year, which Ng Pack estimates is better than on the mainland.

Also locally, however, the first quarter of the year was much worse than it is now, off an estimated 15 percent from the first quarter of last year, Talwar said.

Looking toward recovery, Ng Pack sees newspaper and radio leading the way because of the volume of retail advertising the mediums attract.

"In tough times, clients will abandon long-term, brand-building advertising," he said. Magazines have long lead times, and TV is often used for image-building.

Retail advertisers can take advantage of the shorter turn-around time offered by newspapers and radio.

"Companies that maintain ad spending through a recession come back stronger and faster in terms of market share," Talwar said, citing one study that tracked economic cycles over 40 years.

Ng Pack provided an analogy of two runners in a race. If one stops while the other keeps running, "they have that much further to go to catch up."