CHICAGO - In the short-term Philip Morris' dramatic 40% price cut of its flagship Marlboro will equate to more work for its workhorse agency Leo Burnett Co. But at the same time, the cut on the premium brand has also served as a brutal reminder that the agency cannot depend on what used to be big money-rich accounts to build its business.
Marlboro was a dying brand when Burnett was handed the business in 1954. In it's first job as a Philip Morris fixer-upper, Burnett turned around the gender target and eventually sales. Until recently, the brand never looked back.
Last week's announcement exposed some cracks inside Burnett's huge armour. As its blue chip clients begin to show their age, Burnett is finding that developing the correct response is a little more challenging. The Marlboro Man is the biggest example. But there are others. United Airlines, another one of Burnett's icons, is also suffering from battle fatigue as budgets are being sacraficed in order to keep airlines afloat. Kraft General Foods, Heinz, and Miller Lite all are facing slowdowns, and ultimately cutbacks in general advertising as they look toward cheaper, non-traditional ways of reaching the consumer.
'Burnett's revenue is not just tied to a Marlboro print ad anymore,' said one Burnett source. 'The definition of what Burnett does for Marlboro has changed. It's not just print ads. It's all the other stuff.'
That may be a difficult pill for Burnett to swallow. Its recent, costly, surge into below-the-line training throughout the agency is partly the result of some of the constraints. Although executives refused to be interviewed for this story, Leo Burnett U.S.A. president and chief creative officer Ted Bell has said recently that getting creatives, which have relied on big TV or print-production efforts, to think in other ways has been difficult. 'But once they realize they can do great creative for something as small as a matchbook cover, they get just as excited about it.'
Burnett creatives will have to get used to it. The agency is about to see the majority of its revenue from Marlboro go from the traditional 'Come to where the flavor is,' print ad, to non-traditional promotions, such as the one just completed for the Marlboro Adventure Team. Catalogs, couponing, and point-of-sale materials will be the norm for Marlboro, as figuring out how to tag a 15% commission on those things becomes more difficult.
Copyright Adweek L.P. (1993)