Global Advertising Practice in a Borderless World

Robert Crawford, Linda Brennan, Lukas Parker, Robert Crawford, Linda Brennan, Lukas Parker

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781317421696
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

Cultural and regional differences in creating and managing advertising require unique responses to a dynamic, rapidly globalising business environment. To be global in advertising is no longer to be homogenised or standardised, it is to be at the leading edge of social and cultural trends that are changing the world as we know it.

Global Advertising Practice in a Borderless World covers a wide range of adaptive advertising practices, from major and emerging markets, in mainstream and digital advertising. It focuses on understanding how the globalisation of advertising works in practice, explored in three sections:

• globalising advertising in a media and communications context;
• advertising in a global world; and
• global advertising in a digital world.

Covering past, present and potential futures, through an impressive ensemble of global advertising practitioners and academics, the book combines academic rigour with practical insights to provide a comprehensive analysis of the changing dynamics between advertising and globalisation. It will be of great interest to researchers, educators and advanced students in advertising, global branding, international marketing, international business media, communication and cultural studies.

1
Globalisation of advertising

An overview of trends and issues

John Sinclair

Throughout the final decade of the twentieth century, the concept of globalisation became ever more seen and heard as ‘a key idea by which we understand the transition of human society into the third millennium’ (Waters, 1995, p. 1). The need had arisen for an inclusive term able to encompass the huge economic, political, and sociocultural changes that were being experienced on a world scale. ‘Globalisation’ has since become a cliché of our times, associated primarily in everyday discourse with global economic and political interrelations, but there has also developed a vigorous discourse about globalisation in the sphere of culture, in the broad sense, and this includes the globalisation of advertising.

The advertising industry has become involved in globalisation because it is a service industry that supports the foreign investment of global advertisers and has an active role in stimulating global media development. But as well as being a force for globalisation in national media and consumer markets, the advertising agency business itself is highly globalised in its organisation. This chapter will outline how globalisation has arisen in the advertising industry, and how it is manifested in its structure today. The profound transformation of advertising in the digital age must also be considered, along with related changes in modes of belonging, such as nationhood and minority status. Finally, a more nuanced appreciation of globalisation is provided by looking at how it is mediated by differences within and between world regions.

Global trends in the advertising industry

The rise of globalisation

An integral part of the commercialised culture of the everyday globalised world are the brand names owned by global advertisers. Some global brands, such as Coca-Cola, have had an international presence for generations. They belong to companies which grew from local to national scale, mainly in the US and Western European countries. In the 1960s and 1970s, such firms would become known ‘multinational’ or ‘transnational’ corporations. However, many others achieved global reach within a decade or so. Notable amongst these has been the sudden rise of communication and information technology corporations. We now find Apple, Google, and Microsoft topping the list in annual surveys, pushing down the likes of Coca-Cola and McDonald’s (Millward Brown, 2016). Either way, these are the corporate advertising clients we now call ‘global’.

Looking at the globalisation of the advertising and marketing communication industries in historical perspective, this occurred as the US- and European-based consumer goods and services corporations spread themselves into foreign markets in the 1960s and 1970s. Correspondingly, advertising agencies were also setting up offices abroad, both to serve these existing clients, and to capture new ones. Furthermore, this ‘transnationalisation’ of the brand name advertisers, with their advertising agencies in step, created demand for advertising space and time in the media of those countries they entered. National governments were thus pressured to ‘liberalise’ their media in the 1980s, meaning privatisation and deregulation. At the same time, new technologies, notably international satellite television, were breaking down the borders of the national media systems. This in turn allowed several media corporations to internationalise themselves, such as Time Warner, Sony, and News Corporation, ushering in an age of global media. With the advent of the Internet, unprecedented new modes of media globalisation and advertising have seen the rise to global dominance of Google and a host of social media platforms, accessible to many more people by mobile communications.

Current global structures

The advertising industry can best be thought of as a set of relations between the advertisers, their agencies, and the media, a ‘manufacturing/marketing/media complex’ (Sinclair, 2012). As just suggested above, the globalisation of each of these entities has proceeded in relation to the others: the advertisers being the prime movers; the agencies at their service, but also having their own interests to pursue; and the media developing in pursuit of advertising revenue. Looking now at the advertising agency business in particular, we see how certain key trends were set in train in the 1980s and continue to be formative today: first, the incorporation of international agencies into holding companies at a global level; second, the integration of other marketing services into these same groups; third, the separation or ‘unbundling’ of advertising’s two traditional functions of creating advertising campaigns and placing them strategically in the media; and, finally, the continued influence of ‘global alignment’.

For globalisation to occur in a meaningful sense, there needed to be a discourse about globalisation that could facilitate and legitimise the process, and a structural change which would make the world advertising industry truly internationalised (much more than just US agencies serving US clients in foreign markets). These conditions came together in the 1980s, with the discourse from a US management guru, Theodore Levitt, and the structural transformation brought about by the leading British advertising agency of the 1980s, Saatchi & Saatchi. Saatchi & Saatchi built itself into a global corporation by taking up Levitt’s doctrine (Mattelart, 1991) and sought to bring about ‘the world of a few mega-agencies handling the megaclients’ (Magnet, 1986, p. 39). By raising huge amounts of capital from the London Stock Exchange, Saatchi & Saatchi made a series of takeovers of companies bigger than themselves, both in the UK and the US. The holding company structure enabled them to integrate a number of independently operating international agencies under a single strategic, management, and financial umbrella. A similar path was followed by another UK agency, WPP, which took over some of the oldest and most revered agencies in the US, such as J. Walter Thompson. As of 2015, WPP was the world’s largest holding group, and, although Interpublic and another US holding group, Omnicom, maintained a massive global presence, and Saatchi & Saatchi had become part of the French holding group, Publicis, the top five was rounded out by the perennially largest agency in Japan, Dentsu (Advertising Age, 2015).

Under the holding group model, a number of international advertising agencies function independently from each other, but under a common corporate owner at a higher level of management. However, as noted above, these holding groups are not restricted to advertising agencies; they also incorporate companies in related marketing ‘disciplines’ such as public relations, market research, direct mail, and similar marketing services. We thus come to see that the holding groups are engaged in much more than the business of advertising: they embody the rhetoric of ‘integrated marketing communications’. The horizontal integration of the advertising agencies is basic to the management of ‘client conflicts’, and this was one of the main factors that led to the formation of the holding groups in the first place. Advertisers will not tolerate having an agency that is also working for a competitor. The holding group solution can be illustrated in the case of WPP’s management of the Colgate and Unilever accounts. Both are competing global clients, but WPP is structured to cater for them both, with Young & Rubicam handling Colgate, while Ogilvy & Mather takes care of competing brands for Unilever.

Vertical integration provides clients with other marketing services under WPP’s same ‘mega-group’ structure. If clients need public relations services, they can be referred to different companies in that field too, such as Burson-Marsteller, which often operate on a global basis. Similarly, market research can be provided by Millward Brown, while there are other companies again in the same stable offering non-advertising services in branding and design, direct marketing and promotions, and specialist areas such as healthcare and multicultural marketing.

Also integrated with the holding groups are specialist media-buying and planning, or ‘media’ agencies. Along with the rise of the holding companies, the 1980s saw the ‘unbundling’ of advertising’s traditional functions of placing and making advertisements, formerly handled by one ‘full-service’ agency. This is the third point listed above: the business of strategically purchasing media space and time became hived off from the ‘creative’ business of devising and executing advertising campaigns, into quite separate agencies. Client conflict can be just as much an issue to be managed in media-buying as in creative campaigns. This is because media-buying is not only a matter of getting media space and time for the best price, but involves the crucial matter of media planning. Like a creative campaign, media planning involves strategies which a client does not want to risk being leaked to competitors. Specialist media-buying and planning agencies are profitable for the holding groups, because a group can funnel the total media-buying requirements of its several creative agencies through its handful of media-buying agencies to obtain considerable buying power with the media.

The final key structural trend to be considered is global alignment. Although long-standing agency–client relationships were formed in the early days of agency expansion, once again it was the 1980s, with the global brands discourse introduced by the Saatchis, which was the crucible of change. The Saatchis encouraged their clients, such as British Airways, to consolidate their accounts with the one agency network on a worldwide basis to expedite the running of global campaigns, and also to cut costs. This became a movement towards global alignment that accelerated through the 1990s. Global alignment impacted heavily upon the independence of local agencies, because, in order for them to gain access to global clients, they had to join a global group with which those clients were globally aligned.

Impact of ‘new’ media

The relatively comfortable relationship between advertisers, agencies and media throughout the golden age of mass media in decades past (in which the media offered content that could attract audiences so as to sell access to those audiences to advertisers via the agencies) was the standard ‘business model’. However, this model has come under pressure from the Internet, particularly the rise of search advertising. As a fundamental function of Internet usage, searching through ‘search engines’ has emerged as an integral advertising platform. The search engine’s basic business model rests on its ability to offer and sell advertising, but not on any platform other than on its own. Where traditional media attracted audiences with the offer of information or entertainment content, search engines attract users to the service itself, and match search queries to ads. In both cases, the audiences or users collected are then ‘sold’ to advertisers, but in distinct ways. We have seen how traditional media depend on large advertisers, who place their advertising via an advertising agency. Search advertising has in principle diminished the need for any such intermediary. In the process, it has simultaneously enabled the rapid rise to power of Google, by far the most successful search engine in the field. The mega-groups have retaliated, not only by opening up their own ‘digital agencies’, but by staking out their claims in the new specialised commercio-technical areas which the Internet has opened up: that is, the generation, placement, distribution, measurement and general management of online advertisements. These activities now populate a new digital space, between the agencies and the Internet, and form a third area of commercial service provision for the agencies, the first two being, as has been noted, the placement and the creation of advertisements. Advertising practice has become highly technical in this new age of the algorithm.

Current trends in advertising, media and society

Advertising, branding and the nation

Advertising is a major vehicle of branding. With the rise of the press, then radio and television coming to dominate social communication in the twentieth century, branding found its supreme vehicle in advertising. Advertising thus impelled the commercial growth of these media, just as branding is a force behind the new social media today. Advertising enables brands to acquire cultural meanings, such as hierarchies of status, associations with certain kinds of people, and even something like their own personalities.

An influential analysis of branding comes from Adam Arvidsson, who has shown how consumers, rather than being the passive dupes of advertisers, actually participate in the making of a brand, albeit unequally. His insight is that brands capitalise upon ‘people’s ability to create trust, affect and shared meanings: their ability to create something in common … it is the meaning-making activity of consumers that forms the basis of brand value’ (Arvidsson, 2005, pp. 236–7). As common meanings created collectively by people (whether a nation or a sub-culture) is one of the main things we mean when we talk about ‘culture’, Arvidsson contends that brand marketers pick up on such meanings and exploit them by associating them with particular products and services.

When we talk about national identity, we not only mean the identity of the nation in relation to other nations, but also the identity of those persons who see themselves as belonging to the nation, and for whom that is a dimension of their personal identity. In this second sense, and in line with the view that consumers make meaningful choices for themselves, it can be argued that they choose national belonging rather than have it imposed on them. Such allegiances can be expressed in making purchases of certain brands, particularly those that are represented to consumers as embedded in an everyday, popular national culture that they identify with as their own. This leads Martin Davidson to claim that ‘it is in consumerism that we most express our sense of social belonging…. Culture is the society we build with our brands’ (Davidson, 1992, p. 124).

National belonging can be seen as a form of resistance to globalisation: ‘In the face of globalisation commonly shared things anchor people to place…. The ability of things to connote shared histories is potent’ (Edensor, 2002, p. 116). However fraught and tenuous the idea of national culture has become in the era of global flows, and although some brands encourage us to think of ourselves as ‘global citizens’, cultural belonging continues to be associated with place and nationhood (Morley, 2000). Externally, many nations now cultivate a brand identity, each seeking to position itself vis-à-vis other nations in the global marketplace, competing for trade, tourism and investment, or protecting the unique ‘nation of origin’ status of their exports (Moor, 2007). Modern nation states are intrinsically interested in pursuing and promoting images of national unity and belonging, and in cultivating support for their policies at home and abroad. They do so increasingly through ‘nation branding’ – ‘Cool Britannia’ is an exemplary case. That is, the nation itself now presents itself as a brand, both internally and externally. Internally, in the interests of governance and as the custodian of the national culture with which it legitimises its authority, the nation state addresses its citizens as members of the ‘imagined community’ of the nation, and hence as participants in its supposed ‘deep horizontal comradeship’ (Anderson, 1983, p. 6).

To the extent that ‘the market rather than the state has become the key reference point for national identity’ (Foster, 1999, cited in Edensor, 2002, p. 111), the ‘official nationalism’ of the nation state is now infused with what has been called the ‘commercial nationalism’ of the market (James, 1983, pp. 79). This notion also addresses people in their capacity as members of the nation, not as citizens but as consumers, and calls upon the same ‘trust, affect and shared meanings’ (Arvidsson, 2005, p. 236) involved in national belonging. The ascendance of the values of the market over those of the nation state also entails a shift from the formal, official markers of nationhood towards those that are more grounded in popular culture and its commercialisation by the media. Thus, in addition to diffusing popular traditions and narratives of national belonging, and the ‘shared meanings’ of nationhood expressed in televisual and media culture in general, branded goods, ‘as advertised on television’ and elsewhere, also become mediators of membership of the nation.

Advertising and minorities

We should also be aware that the global flows of persons in the form of migration, displacement, tourism and other forms of ‘deterritorialisation’ mean that contemporary nation states and markets alike are confronted with culturally diverse and highly fluid populations. In these circumstances, myths of national belonging and their expression in communities of consumption can exclude at the same time as they include – the mainstream, dominant culture is affirmed, while minority cultures and subcultures are ‘othered’. In terms of marketing and branding, minorities within a given national market mostly lack the scale and distribution necessary to attract the attention of marketers, although members of the same minority living in different countries, as in the case of diasporas, can form transnational markets for certain branded goods and services. Western Union for example, is literally transnational in the sense of cutting across national boundaries.

National net...