Ads can be cute, even heartwarming, but it matters little if they don't move product.

Ads can be cute, even heartwarming, but it matters little if they don't move product

There are many ways to measure the effectiveness of advertising, but if you ask the question of Bob Davis, dean of Los Angeles-area ad agency executives, he will say, "Sales."

In other words, you can talk about advertising as a long-term investment to build image, you can talk about it as being clever and cute to win attention and awards, you can talk about it as gratuitous and institutional to keep your corporated name before the public -- but the only real measurement of how well it works is how it moves merchandise, whether it's a hamburger, a car, or lawn fertilizer.

Davis is chairman of Davis, Ball & Colombatto Advertising Inc., a downtown Los Angeles agency with the distinction of having survived and grown as a single entity since its 1958 founding by Davis. Successive acquisition waves gobbled up scores of others> at one time a Los angeles agency was defined as an agency that was for sale.

DBC also has survived and grown by concentrating on a specialty, retailing. It might seem only natural that an agency with retail accounts would be sensitive to sales of its clients, but it goes deeper than that, says DBC President Brad Ball. He thinks the agencies that will make it in the tough 1990s will be those that measure their efforts primarily by client sales results no matter what kind of business is involved.

This would be particularly true if the recession many economists now think is in the wings develops locally or nationally. Although he's not forecasting a downturn, Ball does see flatness in some areas.

Bob Davis has it pinned down more concretely. DBC retail clients in the Southern California area, which have in total some 2,100 outlets, have been generating about 730 million sales transactions per year, he says. That's approximately 23 per second. As of last week, it was down to approximately 710 million.

So there has been a slight glitch in sales. Since retail activity is an important measure of the economic activity in general, it follows there also currently is at least a slight glitch in the overall local economy. If so, activity may be heating up at DBC. When a company's sales drop, it often asks its ad agency to work harder. The client demands new creativity or a switch in emphasis -- often for a reduced fee. In the case of DBC, sudden switching is not that difficult. The agency is used to it.

"If we kick off a campaign for a retailer on a Thursday and don't do well over the weekend, we're going to be re-evaluating it on Monday," says Ball.

This is particularly true in new campaigns for clients like Knott's Berry Farm or McDonald's (DBC handles the McDonald's Operators Association in several Western states), which depend largely on impulse sales, Ball says.

No man has greater love for his job than Ball. He once skied down a man-made mountain of Bandini fertilizer for a commercial when the actor assigned to the task balked. "I had to join the Screen Actors Guild and I still get minor residuals," he comments.

In retail advertising it is one thing to launch a new advertising or marketing plan and sometimes quite another to get the individual retailers to comply -- that is, put up the displays, feature the coupons or whatever it may be. Toward this end, DBC personnel "shop the stores" of clients to check up.

Also, sales results of clients are fed daily to DBC offices and quickly computerized. "We can get a handle on the last French fry sold by McDonald's daily or even by the hour, if that's what we want," says Ball.

Mark Davis, Bob Davis' son and executive vice president and general manager of DBC, echoes the theme: "In the final analysis, advertising is to sell products. We're not in it for awards> our creativity is how best to help sales of a client vis-a-vis its competitor."

He cites Ralphs Grocery Co. as an example. It's up against Vons, which stresses service, and Lucky, which stresses price. So the agency had to come up with something different> in the competitive swim, Ralphs had to stand for something that wasn't a territory staked out by others.

The agency came up with selectivity and variety. The theme settled in: Ralphs is never out of an item it advertises. If a shopper does find the store is out of the item, a Ralphs' dollar, script that can be used to buy any item in the store, is given for the value of the missing merchandise.

DBC will bill about $135 million this year, up slightly over last year. It has 190 employees, 140 in its Los Angeles office. It has offices in San Francisco, Portland, Sacramento, Tucson and Phoenix, and is a partner in a joint venture with Ferrer/Ad America, Mexico's largest agency. Also, it owns Gelman & Gray Public Relations.

Bob Davis remembers vividly the ad agency situation in Los Angeles when he opened in 1958, perhaps because there wasn't much to remember. "There were only two or three local agencies and some branch offices of national agencies," he says. "Los Angeles wasn't the easiest place to get business> there just wasn't that much here."

That changes, of course, with the advent of the Japanese auto industry here.

DBC grew up with the savings and loan industry, a basic Los Angeles business for decades -- tuned, of course, to the big housing and mortgage market here. At one time, when account conflicts were considered acceptable, the agency handled several S&Ls. "They sort of encouraged handling of more than one S&L," Davis recalls. "Competing accounts presented no real problems. The more you had, the better they thought you were at handling their advertising."

One could say that billings at DBC -- factoring out new accounts -- could be a sensitive measure of the local economy, since budgets of its clients, to a large degree, are determined by sales. When sales go down, budgets go down.

So far, says Davis, he has seen no budget cutting, although he senses a "slight downturn" in business locally." At Toyota (DBC represents the Toyota Dealers Association) sales are still strong, and we think they'll continue that way," Davis says. "They're maybe a little softer than they have been, but that's true of all retail sales. Nobody can decide whether or not we're in a recession."

People

Richard N. Lyness, will leave his post as president and executive director of the Southern California Cable Marketing Council at the end of this year ... Wendy Brickman has been appointed director of marketing at Tri-Coast International, distributor of specialty home video products ... Earl Gamndel has been appointed executive vice president-international for Saatchi & Saatchi DFS/Pacific ... Lark Baskerville is the new director of human resources at Rubin Postaer & Associates ... Nancy J. Miller has joined Nelson/Ralston/Robb Communications as an account executive.

Miscellany

United Press International and Financial News Network have formed UPI Financial Information Services to provide business and financial news and information for other media and investment services ... Rhino Chasers Beer, a product that has just entered the California market, will donate 51 percent of its profits to the African Wildlife Foundation.

Accounts

Alpern, Langer & Greenwald is the new agency for Lew Ritter Fine Men's Clothier of Beverly Hills ... Pollare/Fischer Communications has expanded its roster to include Southern California Gas Co., J. Paul Getty Trust and the Daniels Organization, Century City real estate firm.