PHILIP J. SALVATI : Getting Respect--Finally : Ad Agencies Holding Their Own Against the Big Boys

For years, the advertising industry meant Madison Avenue. New York. The Big Apple.

That made Los Angeles pretty much the tail on the dog. And that made Orange County the flea on the tail of the dog.

No more. These days, Orange County-based ad agencies say they are holding their own against the big boys. Major companies arriving to establish corporate headquarters in such places as Irvine and Newport Beach have brought hefty accounts with them. Local ad agencies have garnered their fair share of those accounts.

Philip J. Salvati, president of Salvati Montgomery Sakoda Inc. in Costa Mesa, says county ad agencies are finally getting some of the respect that they deserve.

At least his firm has certainly been getting its share of respect lately. Salvati Montgomery Sakoda Inc. won a Belding Award last month in competition with the top agencies in Southern California. The agency won 46 trophies at this year’s Orange County AdAwards, including Best of Show, a total second only to dGWB in Irvine.

Salvati, 48, who says he has worked his entire career in Orange County, started the firm in 1981, with Scott Montgomery and Ken Sakoda. Besides its local base, the agency also has an office in Phoenix for its account with Arizona’s largest financial institution, Valley National Bank.

Though local, Salvati said the firm strives to produce advertising that is the match of anything produced nationally. The firm prides itself on so-called “guerrilla advertising,” ads that make a big splash on a limited budget.

Salvati said the firm has avoided specializing in certain types of clients. The result is a client list hawking products ranging from electronic organs to roofing shingles: the International House of Pancakes, Yamaha Electronics, Yamaha Sporting Goods, CUE Paging Corp., Santa Margarita Co., James Hardie Building Products and Marcy Fitness Products.

Salvati recently discussed his views on the advertising business with Times staff writer Chris Woodyard.

Q. From an advertising standpoint, is Orange County unique?

A. I really don’t think Orange County can be isolated and compared as being different to most markets across the country, with one exception. And that is that (Orange County) is a very affluent marketplace. And in a very affluent marketplace, I think you are going to get a demographic profile of our audience down here that will probably show the majority of people are much more sophisticated and much more educated and have higher household incomes. So you can’t really pull the wool over these people’s eyes when you present your advertising campaign to them. But we like to think of ourselves as a national advertising agency with employees who happen to live and to work in Orange County. We do things on a national basis.

Q. Ever think of locating the agency somewhere else?

A. Actually, no. I started my career in Orange County, and I love the environment. At one time, I was not really pleased with the progress we were making as far as developing our business. But that’s really changed. The market is maturing, becoming much more sophisticated. And I think right now, this is a really great place to be. I think you are going to see much more attention paid to this market by outside advertising agencies, because they are going to realize that the potential for doing business with good, large clients is going to be here. So I think we are in a very good spot right now, a very good spot for a lot of reasons--our growth, our size, our knowledge of the marketplace and the fact we’re doing a job for clients.

Q. What should a client look for in an ad agency?

A. Well, I think most people try to identify who is doing the best job out there. It’s not an easy job. It’s a very important task to perform. Most important is the end result, the product. Advertising with a flair. Advertising that’s not afraid to break through the clutter that’s out there.

Q. But isn’t it difficult to get clients to go along with a non-traditional approach?

A. It’s a battle that goes on on a daily basis. Not every advertising agency and every client are suited to each other. I think we have had our share of mismatches over the past eight years. And we have also had our share of beautiful marriages. And the agency that has a client willing to take chances is a very lucky agency, because without that client’s support, you can’t do the kind of work you want to do, and what is ultimately the best breakthrough advertising you can produce.

Q. When you say creative, does that mean a humorous approach or more of a “Wow, that’s different” approach?

A. It’s a combination of all those things. It’s humorous. It’s exciting. It’s breakthrough. And we want to strive to do different advertising. We feel that advertising that is considered “me-too” advertising really won’t sell products. Really, despite the fact that a lot of advertisers who do what we call “me-too” advertising put an awful lot of media weight behind their products, sheer media weight doesn’t always work. You can’t bore people into buying products.

Q. What do you mean by “media weight”?

A. The frequency of exposure before the consumer. It takes a lot of dollars to do that. And so people who rely on sheer media weight to make an impression are really doing a disservice to their clients, because they are wasting money. What you really like to have is a breakthrough idea, something that catches the imagination of the consumer and allows the consumer to really relate to something that was said.

Q. Give an example of what you mean by a “breakthrough” ad.

A. There was one that most consumers know about and remember. It was the Apple Computer “1984” spot done by Chiat/Day/Mojo in Los Angeles. That is one of the most talked-about commercials ever made, and it was only run one time. Obviously, there was a lot of money put behind that one particular commercial, and I’m sure it was close to $1 million to produce that spot.

Q. You’re referring to the vision of “1984” ad that showed a woman carrying a torch?

A. That’s right. So that’s one of the most talked-about ads. Since that time, there have been several others. Most recently, there has been a campaign done by an agency up in the northern part of the West here, Wieden & Kennedy up in Portland, Ore., for Nike. And the Nike stuff is a real breakthrough.

Q. What particular do you think of Nike’s ads, such as those featuring pro football/baseball player Bo Jackson?

A. They very effectively use celebrity personalities. They use personalities that really make sense in respect to the products being used. Other kinds of things on the national level are the Miller Lite spots. Another thing we have to remember in this business is that the people who are watching television, listening to radio or reading newspapers are doing so for two reasons: one, entertainment value, or two, for information. They are not involved with those mediums because they want to be sold something.

Q. So how should the ad relate to the programming? Should it be more informational or more entertaining or both?

A. Well, all advertising should be informational, otherwise it’s wasteful. But if you can combine information with humor or some kind of interest level or in a way that relates to the consumer, that’s the best advertising you can have.

Q. What is the trend right now in TV ads? Is it going more toward shorter commercials or longer?

A. Well, actually, there have been a lot of 10- and 15-second spots, extremely short ads, done of late. But in addition to those things, I think a reversal’s been happening. Rather than shorter-format commercials, you’re seeing a lot of longer-format commercials--like 60 seconds.

The most recent spot I refer to is (Chrysler Corp. Chairman) Lee Iaccoca talking about their new automobiles coming down and how they fare against the Japanese manufacturers. And he needed a 60-second format in order to do that. He needed to set up the premise that American manufacturers need to wake up to what is happening here and that they have the products and the wherewithal to be effective in this market.

Q. Do you think that is an effective ad?

A. I think it’s a very effective ad, and it’s important to understand that not every spokesman can pull something like that off. I think the fact that Lee Iaccoca is the spokesman has a lot to do with the potential success of that ad. He’s a very charismatic individual, and I think people will pay more attention to him than they would to somebody else. It remains to be seen whether the effectiveness of that ad will pay off in the showroom.

Q. Is that a hard thing to choose between, effectiveness or moving products?

A. Ultimately, the results are measured at the cash register. But there are many ways to measure effectiveness of advertising. In that particular case, I think what Iacocca was trying to communicate was the position that Chrysler has and the position that American manufacturers have, compared to the Japanese. He was really doing some institutional image-building there.

Q. Not every firm has a Lee Iacocca. When you sit down with a new client, how do you measure the kinds of assets that can be used in ads.

A. You try to determine what the unique selling proposition is. And most products have something of benefit that they can say is unique. And if they don’t have a benefit that is unique, you try to get the client in their product development to keep in the back of their mind that they have to do one thing to make their product stand out. But in advertising, you do the very best you can with what you have to work with. Hopefully, you find clients who manufacture products that are better than the competition, and that’s what you model your campaign on.

Q. This is the age of health and fitness. I’ve noticed how one of your clients, the International House of Pancakes, has tied into the Los Angeles Marathon. How important is it to play up health and fitness in advertising products?

A. I think health and fitness is here to stay. It’s not a fad (but) something that most people are finding that they are making part of their everyday life style. To what degree depends on the individual. Whenever we could tie into a particular event like the L.A. Marathon, it is important to do so, because a segment of the audience is very health-conscious.

Q. Do you think celebrity tie-ins are more important than ever?

A. I don’t really believe that they’ve really waned over the past decade. I think they’ve always been really strong as far as the appeal of having celebrity spokespersons. I think you are seeing a change now as to how they’ve been used and when they are being used, but they have always been very popular. I remember back years ago, when Great Western Savings had John Wayne as their spokesman and the impact that had on their marketing effort.

Q. And what do you expect to happen with made-for-advertising characters like Joe Isuzu, the lying car salesman?

A. That’s part of the scene also. I think having someone like David Leisure, who is the Joe Isuzu character, has really made a star out of him but has also put Isuzu on the map as far as their visibility also. I know a lot of manufacturers of tennis rackets, clothes, etc., will go out to colleges and high schools and sign potential stars before they become big names. And the reason for doing that is obviously because it’s much more affordable to do that before the name is developed than afterward. Then there’s a tie, and they follow this group of people through their careers, and some of them make it and some of them don’t, but those who do they have on contract.

Q. What do you think advertising will be like during the next decade?

A. I think it will be very exciting. One reason it will be very exciting is there is more competition now than ever. I think it’s going to be a real challenge.

Q. What do you think a 30-second TV spot will look like in 1998?

A.I think a lot of things that make a commercial stand out today will make it stand out 10 years from now. National television is being affected because of the cable television. With cable television, you have a lot more penetration.

Q. Isn’t that going to be to the detriment of advertisers? There won’t be one single place you can go to advertise broadly.

A. Well, you can look at it that way as far as that might be a negative, but there’s also a very big positive: Cable television allows the advertiser to pick and choose his audience and pick and choose his location at a very reasonable cost.

Q. So you have a greater ability to target?

A. Exactly. If you only need to reach a certain area of Los Angeles or Orange County, you will be able to select cable systems in those areas that allow you to reach only those people. And you will be able to select programing that appeals to a certain demographic profile.

Q. What about the TV spot itself? Do you think they will be as quick-paced as today?

A. It’s hard to say. It may be it is effective now because of the limited attention span that the consumer has. I think we’re finding consumers today are much more pressured than ever before. They are pressured not only in their work environment, but they are pressured in their social environment. And they really don’t have time to have to squeeze out a particular message. So when a consumer watches a television spot, there is a tendency for advertisers in a lot of cases to give them as much information as they can. The mind can pick up a lot of images.

Q. It sounds like, in advertising, the image is stronger than the word.

A.I think so. I think any time you have the benefit of action, color or anything that you can visually relate to as well as the spoken word, that double impact is going to be more effective than just one-dimensional.

Q. Where do you think Orange County ad agencies will be in the next five to 10 years? Do you think the industry will continue to grow here in number and size?

A. Actually, I suspect that there won’t be more advertising agencies, because there are quite a few now. I think there probably (will be) well over 200, 250 advertising agencies in this county when you consider the boutique-sized agencies, the one-, two-, and three-person-shop-sized agencies, way up to the larger shops. I think there won’t be more advertising agencies. I think there will be fewer but larger and better advertising agencies. There’s going to be a weeding out, and that’s because of the competition that I spoke of that we in this industry are going to have to face for the next few years. So I think we are going to have to be as good as we possibly can be in order to survive. But I think that’s good. I think it’s good not only for our industry but for the people who are going to have to use us.

Q. Does L.A. give you the respect it should? Is Orange County equal or on the way?

A. I think a lot has been written and said about the “Orange Curtain,” the barrier between Los Angeles and Orange County in respect to advertising and the quality of the work. But I firmly believe the quality of work being done in Orange County could match the quality of work done anywhere in the country, including Los Angeles. And I think the perception of Orange County being less perceptive or less creative is a thing of the past.