Log in

ISM Article

Where Has all the Advertising Gone

4 Oct, 2005 By: Ian Crockett imageSource

Where Has all the Advertising Gone

Dealers have experienced
incredible change over the past few decades. Growth in technology, acquisition
spurts that made many people wealthy and produced nationwide distribution firms,
and changes in the products and services provided have kept the copier industry
interesting to say the least.

The other change I’ve witnessed, although it’s been more subtle than those
mentioned above, is how office technology dealers market themselves. Once among
some of the most aggressive advertisers and innovative marketers, dealers have
become less visible and many have simply disappeared, taking more of an
underground marketing approach.

There are those notable exceptions—dealers who have seized this opportunity and
are dead set on not only becoming the marketplace leader, but also maintaining
that status. But, for the most part, there has been a change.

Why this change?

In my opinion, there are a variety of contributing factors that include, but
certainly aren’t limited to, the manufacturers, the media and an overall
business climate that expects instant gratification.

The most notable reason dealers as a whole are less aggressive is the lack of
co-op dollars to fund advertising activities. Some manufacturers have eliminated
co-op entirely, while others have very weak programs, and yet others show it on
an invoice, but immediately deduct it from the invoice or allow the dealer to
negotiate it away.

Frankly, it surprised me that manufacturers would eliminate or reduce co-op
reimbursements. I always felt it was one of the more clever business
arrangements ever designed. The dollars were packed into the purchase price to
begin with, then given back to the dealer to advertise their business.

The catch is there are, or were, guidelines that include how the manufacturer’s
name can be used, mandatory requirements on the size and usage of their logo,
and minimal requirements on how many times it has to be mentioned in a broadcast
commercial. This is clever because it allows the dealer flexibility in how they
impact their market and reinforces the manufacturer’s brand at the same time.

Even though I’ll never understand why co-op is close to extinction, I understand
how it happened.

From day one, dealers never liked working with manufacturer co-op departments.
I’ve come across some terrific co-op and advertising personnel, but most dealers
viewed them as administrative people that were given too much power and were out
of control. You know the old, “power corrupts” story.

So dealers had always told manufacturers to deduct the co-op from the purchase
price and decided they would take care of moving the product through their own
advertising. With the Alco and Danka roll-up, the pressure on the manufacturers
became more intense.

The problem is, I haven’t seen or heard an IKON or Danka commercial in years,
and when they did do their own, they weren’t that memorable. So, the whole
concept of “we’ll care take of our own advertising” has backfired.

In many cases I can’t blame the dealer for being less aggressive. While the
copier industry was experiencing acquisition mania, so was the media industry.
Time-Warner, Disney/ABC, Adelphia, Clear Channel, Infinity, and Rupert
Murdoch/Fox have brought the media into the corporate world, which is bad for
advertisers. Media rates have increased, and worse yet, it’s dramatically
reduced the level of service and the value-add that came with media

If you want to buy cable TV time and impact certain zip codes, you have one
choice—pay the rates they dictate. The only leverage is to threaten to use
another medium.

So you can’t blame dealers, especially in the large markets, for not
advertising. It can be costly.

Since advertising works, however, there are companies in other industries
willing to pay the freight, including car dealers, mortgage companies, banks,
diet programs, medical providers, and insurance brokers. You don’t see office
technology dealers on that list, which is a shame.

The marketplace is ripe, but it takes a commitment, which means taking a risk.
But most of you took a risk when you started your own business.

Due to the factors I discussed, however, the industry is going more underground,
guerilla or purely down the street. For those who have a comfortable job, living
and lifestyle, I wouldn’t change a thing other than increasing your Yellow Page

For those who want to be marketplace leaders and ultimately cash in, you’re
going to have to take risks and reach into your own pockets to invest in

WebinarCase Studies and White PapersSand Exchange Blog

imageSource Magazine Quick Links
Upcoming Events
ITEX Expo & Conference
©2015 Questex, LLC. All rights reserved
Reproduction in whole or part is prohibited
Please send any technical comments or questions to our webmaster