Milwaukee Biz Blog

Regardless of your industry, one thing is true: in an increasingly competitive marketplace, you’ve got to fight to maintain your reputation as a reliable, preferred partner. You must continuously earn your customers’ trust.

Unfortunately, from BP to AIG to News Corp., you don’t have to look far today to learn how not to build trust.

It’s an issue everywhere you look, including in my own industry of marketing communications. Recognizing a need to set a better example, the Institute for Advertising Ethics (IAE) has established the “Principles and Practices for Advertising.” The eight principles advance the highest personal and professional ethics in advertising, public relations and marketing communications, including:

1. Sharing truth while serving the public.
2. Creating and disseminating commercial information to consumers.
3. Distinguishing ads, public relations and corporate communications from news and editorial content and entertainment, both online and offline.
4. Disclosing all material conditions, such as payment or receipt of a free product, affecting endorsements in social and traditional channels, as well as the identity of endorsers, all in the interest of full disclosure and transparency.
5. Treating consumers fairly based on the nature of the audience to whom the ads are directed and the nature of the product or service advertised.
6. Never compromising consumers’ personal privacy in marketing communications; their choices as to whether to participate in providing personal information should be transparent and easily made.
7. Following federal, state and local advertising laws, and cooperating with industry self-regulatory programs for the resolution of advertising practices.
8. Discussing privately potential ethical concerns, and giving permission to teams creating ads to express internally their ethical concerns.

Although these principles were developed for marketing communications, in reality they’re applicable to all business activities. After all, ethical conduct is a critical component of every successful business relationship. The strongest relationships are built not just on contracts and transactions, but on the ethical foundations of honesty, trust and open engagement.

And ultimately, there is a bottom-line benefit. Building trust through a demonstrated commitment to ethics helps tap into customers’ positive emotions. That, in turn, primes customers to make purchasing decisions in your favor as well as promote your brand through their personal networks (via word of mouth or social media) – attracting more customers in the process.

Remember that ethical principles also are important to potential employees. Smart, talented, ethical people seek to work for smart, talented, ethical companies. Upholding ethics helps to attract like-minded talent you need to reinforce ethical conduct and maintain customers’ trust.

The IAE, which is administered by the American Advertising Federation (AAF), in partnership with the Donald W. Reynolds Journalism Institute (RJI) and the Missouri School of Journalism, aims to make its principles the industry standard. Our agency, Scheibel Halaska Inc., has signed on, and we hope many of our counterparts follow.

But it shouldn’t stop there. I believe it’s time we make ethics a top priority in every industry. As important as our customers’ trust is to our success, can we afford to do anything else?

Andy Narrai is the chief operating officer of Scheibel Halaska Inc. in Milwaukee.

"Never before in history has innovation offered the promise of so much to so many in so short a time."- Bill Gates

Although Mr. Microsoft's words referred to today's pace of technological innovation in general, they're especially relevant in the specific context of new media opportunities. No other period in history has seen the emergence of as many distinctly new media options as the one we find ourselves in today.

But most major advertisers have been reluctant to leave the comfortable embrace of traditional media (TV, radio, newspaper, magazines, etc.). Sure … they've talked about and dabbled in new media, but their budgets have remained firmly entrenched in the old stand-bys. However, recent survey data shows that the major players may finally be ready to "put their money where their mouths are."

According to the 2007 Media Investment Survey conducted by the American Advertising Federation (AAF) - on whose national board I serve - nearly three-quarters of respondents are reserving up to 20 percent of their media investment budgets for experimentation in the new media ecosystem. In fact, 52 percent say … "I am more likely to anticipate, prepare for, and get out in front of changes in the media landscape."

Many recent developments in new media were long-anticipated (TV programs on the internet, text messaging, social media). However, the pace of innovation is such that there several also caught the industry by surprise, including:

• The rush to Second Life-type virtual community space.
• The rise of YouTube.
• The popularity of mash-ups or Web applications that have more than one source

"Without change there is no innovation, creativity, or incentive for improvement."- William Pollard

All these new options are a boon for the creative output of the advertising industry. In fact, a full 87.4 percent of respondents believe that media innovations inspire creativity, and they're willing to invest their budgets to harness that creativity.

When asked about approaches to media planning in the coming year, respondents ranked "I am always open to new ways to use traditional media" highest (at 78 percent), followed by "the right media mix almost always includes a balance of traditional and nontraditional media" (at 75.5 percent) and "the search for new media properties to grow my brand never stops" (at 57.7 percent).

The AAF survey makes it abundantly clear that there will never again be "business as usual" regarding media options available to the advertising and marketing industry. The pace of change is such that those that are not in a constant state of experimentation and will fast find themselves at a severe competitive disadvantage.

The AAF Media Investment Survey 2007 included nearly 1,000 advertising industry leaders, spread across agency (38 percent), media (26.9 percent), advertiser/client (13.6 percent) and other (21.4 percent, composed mostly of suppliers and academics) sectors, with the majority being at the director (19 percent), owner (18 percent) or manager (17.6 percent) level. Nearly 31 percent of participants are part of a team that makes the final media investment decision for their company.

Andy Narrai is director of client services at Scheibel Halaska Inc. of Milwaukee. Additional information is available at www.insidesh.com.