Advertising industry plots ‘new media’ strategy at LV convention

David Strow

Wednesday, June 21, 2000 | 11:09 a.m.

The advertising industry may be facing a sea of change, but industry experts believe that basic strategies -- and the traditional media of newspapers, magazines, radio and television -- will be around for some time to come.

That was one of the central messages Tuesday at the national convention of the American Advertising Federation, the industry's leading trade association with 50,000 members. The Las Vegas conference will continue through Thursday.

Despite the boom in so-called "new media," such as the Internet, "I don't think anyone thinks that traditional media is going away," said Wally Snyder, president and chief executive of AAF. "It's only going to get better."

One of the biggest potential changes is now being faced by the gaming industry. One year ago this month, the U.S. Supreme Court threw out a federal ban on showing gambling in broadcast advertising.

But Larry Varnes, chief strategic officer of Los Angeles advertising firm Grey Worldwide -- which has held the Caesars Palace account for the last 15 years, and does widespread work for Caesars parent Park Place Entertainment Corp. -- said Las Vegas casinos haven't seized upon the ruling. One Park Place casino, Paris Las Vegas, does show some gambling in its advertising, "but it's not the main focus," Varnes said.

"To date, there's been no major movement by (Las Vegas) casinos into displaying gaming, primarily because everyone knows you can come here and gamble," Varnes said. "The reason we don't (display gambling) is because the product is the same, casino to casino to casino. A big property really doesn't need to advertise the gaming aspect."

During the period when a ban on showing gambling existed, casinos instead focused on showing the "experience" each casino offered. Much of this advertising is done through a variety of media in Southern California, including billboards, television and radio ads and magazine ads, each geared toward building the casino's brand.

"Our job is to make this (Caesars Palace) a must-see attraction for every person who comes to Las Vegas," Varnes said. "What you're selling is really much more of an experience."

By building that kind of importance in a consumer's mind, a property is better positioned to draw more business and capture more of the visitor's discretionary dollars -- particularly their gambling dollars, Varnes said.

Varnes believes, however, that California's tribal casinos will take a far more aggressive stance to promoting gambling. Their selling point will be convenience and access to Las Vegas-style gambling, rather than a themed property rivaling Las Vegas -- a similar strategy to that used by riverboat casinos throughout the midwest, Varnes said.

"Given they have the ability to make some gains, they will have a much more aggressive (strategy) trying to keep California's gaming population in California, rather than going to Nevada," Varnes said. "(The tribes) will step up."

Gaming, of course, isn't the only industry facing change, particularly as new media, such as the Internet, broadband and wireless technologies emerge.

But like Las Vegas casinos, the advertising strategy of one of America's most powerful companies, Wal-Mart Stores Inc., remains the same -- place the ads where they're most likely to be seen.

"We allow our customers to tell us where to advertise," said Paul Higham, senior vice president of marketing at Wal-Mart. "The role of a newspaper or television station is to have extraordinary editorial content so customers will view your (advertising) a lot. It's not really any more complicated that that."

The focus of Wal-Mart's research -- which involves talking with 40,000 customers a month -- centers on figuring out how customers behave, then targeting the product and advertising to key in on that behavior.

To illustrate the success of that strategy, Higham talked about an experience he had one evening while leaving the corporate headquarters of Wal-Mart in Bentonville, Ark. He ended up behind a truck with a very unusual logo in Bentonville -- a picture of cartoon character Calvin defacing a Wal-Mart logo.

At first, Higham said he was disturbed -- until he saw the motorist turn into a Wal-Mart parking lot, get out of the truck, and walk inside.

"Calvin is attitude," Higham said. "Wal-Mart is behavior."

Though basic strategies remain the same, companies and agencies must still struggle with how to maximize their advertising dollars in the Internet age.

"The big strategy question is how do you fit these all together for your brand," Snyder said. "A lot of companies are looking for ways to fit these into the big picture, not for ways to replace traditional media."

It's unlikely that the Internet will challenge newspapers, magazines, radio and TV for advertising dominance any time soon -- while growing very rapidly, the Internet advertising business is currently grossing between $3 billion to $4 billion per year out of a $200 billion-plus advertising industry, Snyder said.

Still, advertisers are searching for ways to blend the media together. One technology now being examined, he said, involves print ads that, once scanned by a computer, direct the computer to visit the advertiser's website.

But the only way the industry will be able to move into these newer media, Snyder said, is to attract younger employees who better understand how new technologies work. That's an especially urgent need, given the tremendous shortage of employees the advertising industry now faces, Snyder said.

"Agencies are crying in unison that there's not enough knowledgeable people to go around," Snyder said. "Salaries in advertising must go up. Professional passion only goes so far when you can't pay the rent in Washington, D.C., or New York, N.Y."