Broadcasting Telecasting (Oct-Dec 1963)

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THE SATISFIED CUSTOMERS Leading advertisers recite success stories that stemmed from radio-television selling Whether the job is to introduce a new product or give new life to an old one, broadcast advertising can play a major role in getting it done. This message emerged from a series of advertising case histories presented to the Association of National Advertisers annual meeting last week (also see below and page 27). Television was cast in the leading role in introducing two major new products and in rejuvenating a 70-year-old one, while TV and radio were given important supporting assignments in introducing another new one. The advertising value of "documentary-type public service programs" on television — and especially controversial programs — were underscored by Donald L. Clark, marketing planning director of The Xerox Corp., which used TV to introduce its big new Xerox 914 office copier and is currently using documentaries to promote both the 914 and the newer and smaller 813 copier. In recounting the Xerox success with TV (Broadcasting, Feb. 18), Mr. Clark said television was chosen because it could demonstrate the new machine and that documentaries were chosen because they appeal especially to "community leaders [who] are the ones who can influence the acquisition of a copying machine." "Through sponsorship of television documentaries," Mr. Clark said, "we believe we can reach this influential leadership group much more economically than by any other type of programing or methods of communication." Selective sponsorship of "controversial, provocative programs," he added, "provides us with a unique opportunity to tell not only a product story, but also a corporate story [which] adds to the stature and image of Xerox." On the trail that boosted Xerox sales from $27.5 million in 1959 to $104 million in 1962, the company sponsored CBS Reports on CBS-TV in 1961-62, Chet Huntley Reporting on NBC-TV in 1962-63 and, more recently, irregularly scheduled documentaries on NBC and ABC-TV. The agency for Xerox is Papert, Koenig, Lois, New York. For the introduction, still going on, of General Mills' new Wondra instantized flour, according to Donald F. Swanson, marketing manager, television was given primary media responsibility because like the Xerox copier, Wondra needed to demonstrate "all its wonderful benefits." Since the introduction in mid-September, Mr. Swanson said, "Wondra has been using saturation spot TV campaigns in the top 175 markets, plus a network TV assortment that has included five daytime programs and the Judy Garland Show on CBS, Patty Duke Show, Jerry Lewis, Hootenanny and Outer Limits on ABC, and Mr. Novak and International Showtime on NBC. Sales, Mr. Swanson said, are running ahead of expectations. The agency is Dancer-Fitzgerald-Sample. Edgar W. Nelson, marketing vice president of Lehn & Fink, told how the 70-year-old Lysol disinfectant reversed a falling sales trend by using television. Actually, he said, the sales trend was reversed merely by cancelling a campaign in women's magazines, while a new copy theme on television helped generate gains that boosted Lysol's share of the market. Factory shipments in Television and radio may dominate national advertising, but they're practically ignored in the fine print of contracts covering advertiser-agency relationships. A study of 109 such contracts, released by the Association of National Advertisers last week, showed that a preponderance didn't specify how, or even whether, the agencies would be paid for such work as creating and producing commercials and programs, or sitting in on rehearsals, auditions and filmings. This doesn't mean that agencies and their clients don't have agreements covering such things. Rather, ANA officials explained, it means they haven't thought it necessary to write them out. Many entire "contracts" between advertisers and their agencies fall into the same category — they're oral, or covered by documents no more specific than letters of intent. ANA reported that of about 500 companies queried, 161 said they had no written contracts with their agencies. A total of 196 others said they do have contracts, and 109 submitted copies. These formed the basis of ANA's report, which undertakes to summarize current contract practices in specifying duties, services, responsibilities, billing and payment procedures, agency compensation and other areas of the adver 1962-63, he said, ran 33% higher than in 1959-60. Lysol launched its new campaign in the winter of 1961, taking advantage of the minute participations which, he said, the TV networks were then beginning to offer in considerable number as an alternative to regular sponsorships. Selected publications were used on a supplementary basis. In all, Mr. Nelson estimated, the new campaign cost "about 65% of what we had been spending during the years of [Lysol's] decline." "The results," he said, "were everything we had hoped for." In the introduction of Royal Crown Cola Co.'s new low-calorie Diet-Rite Cola, both radio and television were given supporting roles, with the biggest budget going into newspapers to exploit "the news value of this product," according to T. A. Mayton, Royal Crown's director of national advertising. Extent of radio-TV and other media usage was not revealed, but Mr. Mayton reported that in some markets the first year's sales objectives were exceeded in 60 days. tiser-agency relationship. Traditional Payment ■ The report's summary of agency-compensation provisions showed that 97 of the 109 contracts provide for payment of the traditional 15% media commission on gross billings for time and space. Where the buy is noncommissionable, the majority paid the agency net cost plus 17.65% For the production of radio and TV commercials, eight contracts stipulate that the agency will provide this service without charge; eight pay on hourly rates, cost formulas or fees set by the agency; four pay at cost plus 17.65%, three at cost plus 15% , two at fees to be negotiated or agreed upon in advance, two specify no charge until the work is accepted and used by the client — and 82 don't mention the subject at all. For the creation, direction or production of TV and radio programs, 14 contracts say fees will be negotiated or agreed upon in advance, eight say the work will be paid for at cost plus 17.65%, eight others provide for hourly rates, cost formulas or fees set by the agency, three pay at cost plus 15%, one at cost only — and 75 don't mention the subject. For special supervisory services, such as representing the client's interests at auditions, rehearsals and filmings, 10 call for no payment, five for reimbursement of agency's cost, four for cost plus ADVERTISER-AGENCY PACTS ANA study shows radio-television practically ignored in the small print of contracts 54 (BROADCAST ADVERTISING) BROADCASTING, November 18, 1963