Monday, October 19, 2009

Will Madison Avenue become the Airlines?

There's a story making the rounds in the news over the past couple of days that to me has resonance to our industry. It's yet another case of a company making a dubious move because it is cost-effective.

This article, "To Cut Costs, Airlines Send Repairs Abroad," is about the airlines sending its planes to El Salvador for repairs--ostensibly out-sourcing repairs to cut costs. Repairs cost about 1/3 as much in El Salvador as they do when they're done in the States.

Now, I don't believe I am a racist. But my impression of El Salvador is that it's hardly the model of a modern 21st Century economy. My guess is that things we take for granted in this country, like indoor plumbing and rural electrification are likely some decades off in El Salvador. And if you disagree with my bias, I defy you to fly to El Salvador if you need a kidney transplant or even to have a broken arm set properly.

But, the airlines are saving money. Which is good for their stock-holders. Which is the only thing that matters these days.

Advertising agencies are dabbling in similar territories. (Though no one will die if a banner ad is not coded properly.) We are "off-shoring" agency services to cheaper climes. We are raising productivity demands on the few remaining people left on staff back here in the US.

Former presidential appointee to the National Transportation Safety Board, John Goglia said, "The absence of an accident doesn't mean you're safe." Likewise, the absence of a screw-up doesn't mean an ad is good--that an ad will work in the marketplace.

But we don't care about that anymore. We care only about the stock-holders.

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