Going Abroad Can Save Advertisers a Bundle
Stephen Scott trekked half way around the world to help save his advertising agency’s neck. Now he plans to go back to save something else--money.
It was back in April when an actors strike crippled television commercial production, and his biggest client, Coleco Industries, needed a whole slew of television commercials for some new toys. But, with several actors unions on strike, the ad agency couldn’t round up so much as a cue card.
That’s when Scott, chief executive of the Scott Lancaster Mills Atha ad firm, sent a team to Hong Kong to produce a dozen commercials and ended up saving about $40,000 on each ad. For Coleco, the price was right. The financially troubled toy maker lost $47.4 million in the first quarter, and it’s still looking for another hit like the Cabbage Patch doll.
Now, Scott says, he’ll be filming a lot more commercials there. “The strike is the reason I did it the first time,” said Scott, “but the strike is not the reason I’ll do it again.”
It seems that Scott discovered something that a growing number of U.S. ad firms are also beginning to find out--it can be much cheaper to film some ads overseas.
There, of course, can be problems with logistics, travel, language, equipment and shortage of professionals, experts said, but it appears that the advertising industry is following the motion picture industry across national borders.
It is an increasingly common practice for movies to be shot outside the United States--often for financial rather than artistic reasons. And while most U.S. ad agencies still produce an overwhelming number of their commercials in the United States, a majority of U.S. ad firms now produce at least some ads outside the country, according to the New York-based American Assn. of Advertising Agencies.
Some agency clients are so intent on cutting costs that up to half of their ads are filmed outside the U.S, executives say. Agencies are particularly attracted to lower production costs in parts of Canada, Australia, England, Spain, Mexico and portions of the Orient and South America.
“It’s still early in the game,” said Scott. “You’ll find other advertisers doing this by the carload over the next few years.”
Scott also says he doesn’t feel particularly unpatriotic about it, either.
“I don’t know if any sense of patriotism ever entered into it,” said Scott. “To some extent, Hollywood is killing the goose that laid the golden egg. The costs to film here are much too high. My first obligation is to save my client as much money as I can. And if I have to, I’ll go overseas to do that.”
“If there’s anything that continues to irk clients, it’s high production costs,” said Gerald McGee, managing director of the West Coast office of Ogilvy & Mather, which produces ads for Mattel. “To spend $200,000 to produce one TV commercial, well, that’s a lot of Barbie Dolls.”
As a result, his agency’s Los Angeles office shoots up to 10% of its commercials outside the U.S.--usually in Canada or Europe.
For years, most agencies went overseas only when they needed to show some international landmark in the background, such as the Eiffel Tower.
Today, advertising executives say they can save not only on salaries but also on other production costs, including studio rental fees and even lower prices on set construction. And certain residual fees that must be paid to union actors in most U.S. commercials often are not a factor overseas.
All of this hardly thrills the local actors unions. But they also know there isn’t much they can do about it. “That’s always a company’s prerogative to shoot anywhere it wants,” said Mark Locher, a spokesman for the Screen Actors Guild. “But most companies want professional, American talent.”
Indeed, shooting overseas inevitably results in plenty of unexpected headaches. Ogilvy’s McGee says it’s so hard to find good talent overseas that he often brings U.S. directors and actors with him.
Even Bill Davila gave it a whirl, but soured on it.
Davila is the television spokesman--not to mention the president--of Vons, the El Monte-based grocery chain. Two years ago, when the company pressured its former ad firm, Grey Advertising, to cut production costs, the agency responded by scheduling a three-day commercial shoot in Toronto.
Although the company did save some money, Davila says he isn’t anxious to make a repeat trip. “It took me out of the office for three days,” said Davila. “The savings weren’t that significant that I’d want to do it again.”
Fast Food Computes for This Spokesrobot
Nine Lives has Morris, the spokescat. Sunkist has Charley, the spokestuna. Now a fast-food chain has taken on a spokesrobot.
That robot is named No. 5, star of the 1986 hit film, “Short Circuit” and the soon-to-be-released sequel “Short Circuit II.” And later this month he’ll be hyping hamburgers and salads for Rax, the 520-unit fast-food chain headquartered in Columbus, Ohio.
But No. 5 will be 86ed when the promotion ends in two months, promises Dan Corrigan, executive vice president of Rax. “We’re out to sell food, not to promote robots,” said Corrigan. “When this campaign ends, that’s it for the robot.”
Ad Buyers Have Vested Interest in Rolling Stone
If someone shows up at the office wearing a chic leather jacket emblazoned with a specially designed Rolling Stone magazine logo, it’s a good bet the jacket didn’t come from Nordstrom.
And if the person wearing the jacket works for an ad agency, the jacket probably came courtesy of Rolling Stone. After all, the magazine is publishing a special issue on Sept. 8, listing the top 100 single records of the past 25 years. And to coax advertisers to buy big ads in the issue, Rolling Stone is sending out leather jackets for every full page, four-color ad purchased, said Leslie H. Zeifman, vice president and associate publisher.
How big a bargain is this? Well, the cost of each ad: $37,415. The cost of each jacket: about $120. Guess who’s getting the best deal?
The Many Attractions of Southern California
While Manhattan is still the nation’s advertising mecca, Los Angeles may be emerging as a choice spot for advertising conventions. A record 1,000 executives have registered to attend next week’s first-ever Los Angeles gathering of the Washington-based American Advertising Federation.
Why is interest so high? Well, there’s the lure of key speakers such as outspoken New York ad man Jerry Della Femina, said Robert L. Humphreys, chairman of the convention. But there may be another attraction or two. “Just about everyone has a relative in California,” said Humphreys, “and, while they don’t always tell this to the IRS, people like to mix vacations in with business trips to California.”
Outdoor Advertising--With a Real Twist
To some commuters, it might look like whoever who put up this billboard had one too many glasses of the Scotch it advertises.
But to the makers of J&B; Scotch, it is a real attention-getter. More precisely, a visual pun. This billboard, in Buena Park, near the Artesia Boulevard exit of the Santa Ana Freeway, has only a few words: “J&B; With a Twist.” But the half of the billboard with the word twist is, in fact, twisted. It looks as though it barely survived the last windstorm to pass through town.
“If commuters think it was caused by a windstorm, then it’s a failure,” said Roy Grace, whose New York agency, Grace & Rothschild, created the billboard. “But someone must be catching on. In all the outdoor advertising I’ve done for the past 20 years, nobody’s ever called me. Now, they’re calling like crazy.”
