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Communications in the SixtiesAuthor(s): Richard C. ChristianSource: Journal of Marketing, Vol. 25, No. 2 (Oct., 1960), pp. 67-70Published by: American Marketing AssociationStable URL: http://www.jstor.org/stable/1248616 .

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By RICHARDC. CHRISTIANMarsteller, Rickard, Gebhardt & Reed, Inc.

Chicago

Communicationsn t h e S i x t i e sINEFFECTIVE communication is one of

industry's top problems today. Faultycommunications between employer and em-ployee; between manufacturer and sellingchannels; between producer and customer-all create economic inefficiencies and wastes.Two vital segments of the communica-tions industry-the business publication andthe advertising agency-must join the in-dustrial concern in sharpening and refiningthe tools of advertising, publicity, salespromotion, and personal selling.The "publics" of this group are wide anddiverse. Most companies, especially themanufacturers and advertisers, must com-municate their stories not only to customersand prospects, but also to the financial com-munity, shareholders, employees, and sup-pliers. These are the targets of a totalcommunications program.How can we orient this program to thesetargets? How can we insure effective ad-vertising, sales promotion, publicity, andselling efforts? The answer lies partiallyin a recognition that the greatest impact oncommunications comes from two economicfactors which have nothing directly to dowith communications.The first of these two factors is the wholebody of labor laws developed since the mid-1930s.The second is the confiscatory corporateand individual tax laws developed in thesame period.

LABOR LAWSIn the whole body of labor laws has beenthe impetus that had driven manufacturingcosts up astronomically. As long as our costincreases were accompanied by similar in-creases in productivity, we were all right.During this period, two wars tended toobscure the dangers in these labor-cost in-

creases, because much of the output of ournational plant was going into war and de-fense activities. Then, too, traditionally wehave set up tariff barriers which have pro-tected our workmen here against the in-roads of lower cost of foreign goods. Butnow there have been some drastic changes.Now we find that our costs have gone upfaster than productivity-not simply thehourly rates, but the cost of featherbeddingand job bidding and unemploymentcompen-ation. Increasingly today we are paying apremium for not working. Much of thesesloppy labor-managementpractices grew upduring the wars when of necessity the prin-ciple was production at any cost.But now the wars are over, and othercountries have money to buy and have theplants to make competitive goods at lowercosts. They not only have lower labor rates,but they do not have the same problems ofthe fringe benefits and featherbedding thatadds so greatly to the price we have to puton our goods. Until recently our improvedtechnology had made it possible for us tooffset their lower costs; but now their tech-

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JOURNAL OF MARKETINGnology is catching up with ours and in somecases perhaps even surpassing it.The tariff barriers we have built are nolonger any protection. Even with the duty,many commodities built elsewhere sell forless money in this country than our domes-tic products. At the same time we are ata competitive disadvantage selling in SouthAmerican or European countries, and, ofcourse, are frozen out in sales behind theIron Curtain, so that our traditional exportmarkets are being taken over by others.As our export market is drying up, ourcompanies are beginning to combat this, byeither setting up foreign plants of theirown or by licensing agreements abroad.How shall we sell-will we have the salescontrolled in this country or through ourforeign plants and licensees? How shall weadvertise-will we control the advertisingcreated here or is it to be produced anddirected abroad? And what is going tohappen to our business papers, magazines,and advertising agencies? Are they goingto go abroad, too?

INTERNATIONAL ARKETINGSome of us will say that export is notimportant. But now we shall have newcompetition.If we are an advertiser, our traditionalcompetitive position will be upset by theincreasing imports of foreign goods in ourproduct classification.If we are an agency, we face the possi-bility of less billing as sales and advertisingactivities move out of this country. At thesame time, we face the decision of whetheror not we wish to handle advertising in thiscountry for foreign companies who will beimporting their goods. What is this goingto do to us from a competitive standpoint?If we are a magazine, how are we goingto sell space abroad to these manufacturerswho will be shipping into our markets?How are we going to provide really goodeditorial coverage of all these world marketsinto which our foreign operated subsidi-aries and licensees will be selling?We face a vast adjustment in thinking.We are going to need new knowledge ofnew markets. The advertiser, agency, andmagazine face the prospect of big invest-

ments far ahead of reasonable returns insetting up to be competitive in a whole newcomplex of foreign marketing. We have agreat training program ahead, and manypeople are already concerned about it. Awhole new body of information is needednot only on the broad marketing aspects ofthis world-wide business, but on the simplebut totally new details such as foreign mon-etary exchange, foreign media, and graphic-arts availabilities.

TAX LAWSConsider now the second of these two

major economic factors-taxes.Nothing has built big business so muchas taxes. Many, if not most, of the mergersof our manufacturing companies have comeabout as a direct result of the tax laws.The owner of the small business which hasgrown successfully finds it difficult to buildan estate out of earned income and wantscapital gains. Then there is the problem ofinheritance taxes. In the last ten to twentyyears there have been spawned the multi-division industrial company, the concept ofdiversification, the autonomous offspring ofthe watchful parent.The same influences have led to the rashof mergers among publishing companies.To see these tax forces at work, considerPlatt, Industrial Publications, IndustrialPublishing Company, Gage.Among the advertising agencies, thesame factors have been at work. Also, asadvertisers have grown, become more diver-sified in products, markets, and geography,and have expected more services, the agen-cies have followed the same pattern.The larger companies tend to be bettermarketers and better advertisers. The agen-cies are more sophisticated, providing moreservices and better people. The magazinescan afford stronger editorial material andbetter marketing data.We find fewer industrial companieswhere the president or the sales managerruns the marketing and advertising activi-ties, as was so common thirty or forty yearsago. We have fewer "one-man agencies,"and it is more difficult for the "fringe mag-azines" because the advertiser and theagency are less sentimental and expect a

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INDUSTRIALMARKETINGgreat deal more in factual information be-fore they buy.Also, in the large multi-division companythe vogue for the marketing concept findsits greatest development. The small, infor-mally operated company has less need forinteraction between departmental special-ists. In the little company the advertisingmanager is still the general practitioner;but in the larger company the advertisingand sales-promotion activities tend to berun by a more specialized group of people,who in turn look to similarly specializedpeople in the agencies and in the media.

CHANGINGROLEOF ADVERTISINGMANAGERTherefore, the advertising manager ischanging. In the company of the futurehe is going to have much more exposure totop management and to top-managementideas. He will have more responsibility butwill be better paid. By the end of the 1960smost advertising managers will be market-ing men. To put it another way, mostly itwill be marketing men who will head adver-tising and sales promotion and publicityand related functions.We are probably in for more titlechanges. We will have CommunicationsManagers, and the title Marketing ServicesManager will become increasingly common.This man of the future who will runadvertising and sales promotion will need toknow a lot about some things he does nothave to concern himself with too muchtoday. He will need to know cost accountingto much greater extent, and have a muchbetter understanding of the real effects ofoverhead. He will understand individualproduct profitability, and what producesprofits and how they are calculated. He willhave to know a great deal more about pric-ing. He will have a much better groundingin psychology.

CHANGES N AGENCIESWhat changes can we expect in advertis-ing agencies ?It seems perfectly evident, regardless ofthe fact that we occasionally read that it istime that the advertising agency went backsimply to preparing advertising, that theagency of the future is going to be muchmore involved in the total marketing pro-

gram of the advertiser. The agency is goingto have to provide increased research andpublic relations services. It is going to haveto take on collateral materials and catalogs,whether it likes it or not. It is going tohave to produce more visual aids.The production departments in the agen-cies of the future are going to have to bemuch more sophisticated than at present.We are developing a whole new world ofgraphic arts. Few advertisers will buy insuch quantity to have real buying influencein any one of these graphics, and the extentof knowledge needed to deal with them willrequire more specially trained productionpeople.Likewise in the media department we aregoing to be staffed with true analysts. Weare likely to have specialists in overseas ad-vertising, and even media specialists bymarkets. The advertiser of the future isgoing to want this kind of attention. Mediabuying is a tremendously complex functiontoday, and will become even more so in thefuture.

TRENDSIN BUSINESSPAPER PUBLISHINGOur business papers are headed for achange, too. The competition for readingtime will, of course, grow increasingly in-tense; and so the magazines are going tohave to be edited to provide summary infor-mation on all subjects for those who needonly the basic understanding. Yet this willhave to be buttressed by details for thosewho need to know the facts in depth.With the growth of the marketing con-cept, plus the increasing importance of mar-keting in business today, industrial manu-facturers and their agencies have beenstriving to make the communications job asscientific and as effective as humanly pos-sible. In this process they have been rely-ing more and more each year on the re-search facilities of business publications.This trend has accelerated to the point thatpublishers now find themselves not only inthe publishing business but, in a very realsense, in the research business.There are at least six major areas inwhich business publications are providingresearch services to their advertisers andadvertising agencies:

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JOURNAL OF MARKETING1. Advertising and Editorial Readership Studies:Designed to tell how well advertising andeditorial pages are read.a. Advertising recognition studies

(Readex, Starch, Ad-Gage, ReaderFeedback, Mills Shepard).b. Reader impression studies (StarchReader Impression, Gallup-Robinson).c. Reading habit studies.2. Market Research Studies:Designed to analyze the market.a. General market potentials and indus-try forecasts.b. Analysis of market trends.c. Buying influence studies.

d. Buying habit studies.e. Detailed statistical market studies.f. Psychological and motivational re-search.g. Analysis of new markets and products.3. Distribution Research Studies:a. Selection of channels of distribution.b. Operating methods of dealers and/ordistributors.c. Dealer attitudes and/or opinions.d. Dealer costs and profit margins.e. General studies involving the move-ment of goods.4. Studies of Elements of Advertising:Color, size, frequency, copy, headlines,illustration, layout.5. Product Research Studies:Product specifications, characteristics,uses, trends.

6. Brand Recognition and Brand PreferenceStudies:Measurement of impact and effectivenessof marketing and promotion mix.Among the many problems that thegrowth of publication research has broughtto the publishing industry, two stand out.The first concerns the need for skilled man-power to produce the research. The secondis directly related to the economics of pro-ducing such research.

In the first case, publishers are findingthat they must build marketing and adver-tising research departments and staffs com-petent to conduct resultful and unbiasedresearch.The second problem concerns the tremen-dous cost which additional research hasimposed upon business publications. Essen-tially it is the responsibility of the pub-lisher to provide certain basic marketingand advertising research facilities and in-formation. There are two ways to coverresearch costs. One is simply to raise thepage rates. The other is to put the researchoperation of a publisher on a businesslikebasis in which there are pre-determinedcharges to the advertiser and agency forresearch services performed by the pub-lisher. These services should be offered andput on a sensible "pay-as-you-go"basis, justas any other company charges for its basicservices.There are going to be changes in space-selling practices, too. Space selling of thefuture is going to be more interpretiveselling-interpretive of both markets and ofeditorial material. And the space salesmanis going to have to spend more time in thefield with the industry and with the reader.

THE EVOLUTIONARY 60sThese developments will be evolutionarythrough most of the 1960s, but the momen-tum will build. Perhaps we have ten yearsto get ready; but, just as the Gilbreths set

up a whole class of industrial engineerswho left the old concept of the shop superin-tendent behind, just as the National LaborRelations Board changed the employmentmanager into a labor relations director, sowe can expect a new understanding of theposition and values of industrial communi-cations and promotion.

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