HOME GENTER MERGHANT BILL

FISHMAN

Bill Fishman & Affiliates 11650 lberia Place San Diego, Ca.92128

I neCENrl-Y billed a consulting fee to Ia large advertising agency. It was for my input to a pitch they'll be making for the advertising account of a giant California home center chain.

I hope they get it. The chain sure could use some new creative advertising and I like the ad agency's approach to the services they are offering. What intrigues me most is the effort that the agency is exerting to understand all facets of the retailer's business. It wasn't always that way.

At one time I controlled a multi-million dollar ad budget for a chain. Most of the budget was spent on print with a small allocation for broadcast to back up specific promotions. We had an efficient in-house advertising department and used the services ofa large local ad agency to produce and place broadcast advertising.

The agency and I had a good relationship and every once in a while I would ask them to review my total advertising and promotion programs and make some recommendations. Their offerings were always predictable-use more broadcast advertising. I looked upon their suggestions as suspect. Agencies Iove the broadcast media. Mostly, I think, because it's the easiest way for them to make a profit. Once the creative work is produced they gross l59o each time they mail the insertion order to the media.

It's a lot more difficult to produce 52 weeks a year of tabloids, and R.O.P ads. But, I've never met a retailer yet who can prove that he's successful using more broadcast than print. Let's face it; customers can't cut couDons out of the radio.

I'm sure that this agency with whom I recently worked will also include broadcast in their proposed schedule. But I know it will dovetail better with the chain's total sales promotion efforts and be geared to meet their volume and profit objectives.

Not only did the agency use the research resources at our offices to familiarize themselves with the statistical data-i.e., size of market, typical square footage per store, dollars spent per household for home center merchandise. sales per square foot, sales per salesperson, advertising expenses as a percentage of sales, gross margins by department classification and the rest of the numerical information-but, they were also interested in the other functions that affect store traffic and sales volume, For me. this is the first time I have found an advertising agency interested in the retailer's merchandising and operational problems. They asked: o Who determines what merchandise is to be advertised when and how that determination is made. o Who orders the signing and who writes the sign copy. a How coop advertising funds are generated and how they are administered.

O How much control and responsibility the store level has relating to sales, profits and advertising.

(Please turn to page 27)

Home Center

(Continued from page 24) a How movement of sale merchandise is tracked. a What each department contributes in the way of volume and profit to each store. a How future advertising information flows to the store level. o How sales personnel are trained.

In the past, Madison Avenue tYPe ad agencies looked down their noses at the retailing universe.

One of the key advertising industry trade publications only distributes 690 of their total circulation to retailers. Our retail advertising people were considered drop-outs and our "dirty" newspaper ads, some said, could not be held in comparison with the coated stock, full color, single item ads that they produced for their manufacturing clients.

Well. I believe the focus is changing. Madison Avenue has started to recognize that retailers have shed the ribbon clerk image and are today, just as, and maybe more, sophisticated than the manufac- turing universe. There are big bucks in retail advertising, lots of 'em in retail home center advertising. Our ad efforts do need more creativity-but it s got to be more than just a catchy headline and a pretty picture. It's got to be more than just clever radio copy-or an animated tv spot.

There has to be a synergistic approach

Lumber Duty: Round One

Investigation of the charges that Canada subsidizes exports of softwood lumber, shakes and shingles, and fence to the U.S. are continuing although the preliminary findings released March 8 found only minimal subsidies of less than 0.590 and no need for countervailing duties.

The International Trade Commission will issue its final decision by May 23 after going to Canada to verify information it has received and conducting a public hearing in Washington, D.C. on April 14.

In announcing the ruling, Secretary of Commerce Malcolm Baldrige said, "These determinations were made by applying our countervailing duty law to the facts discov- to the retailer's advertising program. The creativity must begin with the retailer's plans for sales and profit and that creativity must be the torch that lights the way through every display, signing, advertising, selling and service function. ered so far during the investigations. They directly address the issue of subsidies. and no other consideration except the law and the facts was involved in them." It was emphasized that the findings were preliminary and that "there will be ample opportunity for public discussion and review by all parties."

I think I've just met one advertising agency that's holding that torch!

Reaction to the announcement was varied although traders on both sides of the border took advantage of the continuation and increased their activities.

Should the final determination be a. recommendation against the U.S. petitioners seeking a duty it will end the matter. If the ITA rules in favor of the petitioners, the investigation will be continued.