Advertising
Stuck to their last
Philip Kleinman
"Smoke J. Walter Thomson Kingsize, the cigarette that cares."
A joke? Well, actually yes. But, like all jokes, it contains a serious thought. The thought, which I offer to you for what it is worth, is that London advertising agencies (of which J. Walter Thompson, of course, is the biggest) have shown less interest than they might have done in diversification.
Most of the top agencies do have a number of subsidiary companies, but these are normally concerned with activities closely related to advertising, such as public relations, market research or sales promotion. JWT does not, in fact, make cigarettes. At a time when the publicity business — as always, the most exposed part of industry -is being buffeted by the chill economic winds, many agency directors may well pause to wonder whether there wouldn't have been some sense in investing some of their time, money and ideas in more secure fields of enterprise. To which you might think the obvious answer was the one about cobblers sticking to their lasts. But the point about admen is precisely that they are paid to learn as much as they can about other people's (their clients') products so as to suggest better ways of marketing them.
Agencies are also commonly hired to dream up ideas for new products. Their stock in trade is business imagination. Though they own little fixed capital, they employ a lot of brains. As far as the necessary human resources go, they would appear to be ideally equipped to get into the diversification game. In America some of the bigger ad agencies have dabbled in diversification, investing in, among other things, electronics and film pro
duction. In this country the principal example of an agency which cottoned on to the wisdom of removing some of its eggs from the advertising basket is Brunnings. Its now retired founder, the wily old Carl Brunning, set himself a long time ago to building up, among other things, a successful boat manufacturing business.
Brunning raised the money for his diversification ventures by making his agency one of the first of the handful of British agencies to go public. A less radical, but nonetheless interesting, experi
ment in diversification has been carried out recently by another publicly quoted advertising outfit, the Kimpher Group.
Kimpher grew out of an agency called Kingsley Manton and Palmer which was founded only ten years ago. Most of its money was put into acquiring a number of other small-to-medium-sized ad agencies — which does not count as diversification in the sense I have been using it here. However, the group has also set up an entirely new division devoted to book-publishing and related activities.
The division is headed by David Kingsley, one of the group's founding partners and a man well known, incidentally, for his work as a former publicity adviser to the Labour Party. The first book the division published, under the Aurelia imprint, was The Butterfly Ball and the Grasshopper's Feast, a children's story with illustrations by Alan Aldridge, which has become a best-seller. It has already inspired a record and a television programme, and a number of other commercial spin-offs are also on the way.
Aurelia's second book, published the other day, is The English Difference, a lavishly illustrated guide to our island culture aimed essentially at tourists. It may not have quite as much conamercial potential as The Butterfly Ball but should still do something to help Kimpher group profits, which have been flagging.
The group hopes to develop the non-advertising side of its business in other ways too. However, unlike Brunnings, it doesn't envisage going outside the general area of what admen like to call "communications," a vague term which covers making films but not, for instance, running a door-to-door hairdressing service. And yet there might be a lot more money in the latter, especially if it was properly promoted, as admen know how.
Flow about it, JWT? And if you get anywhere with the idea, don't forget a small commission for yours truly.
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