Opinion: How to Keep Business in Michigan
By Toby Barlow
While Michigan is in the throes of its upside-down economy, it has been scrambling to find creative solutions. Gov. Jennifer Granholm has been (smartly) promoting green jobs. Meanwhile, we offer generous tax breaks to the film industry, which arguably provides some economic help and boosts local morale.
Meanwhile, community leaders have come up with their own smart solutions, including one that, as someone who works in advertising, I see as having a lot of value. A team led by Campbell-Ludwig CEO-designate, Bill Ludwig, has been pushing to extend those film industry incentives to commercial production. This sense since auto companies put over a billion dollars a year into the filming and editing of car ads, and the lion's share of that money winds up in the pockets of production companies in New York and California. Given the right incentives, a greater portion of that work could stay here in Michigan. I don't know the current status of this particular legislation, but it would add jobs to our economy and deserves serious support in Lansing.
Still, despite these best efforts, things keep slipping downhill. Next month, as everyone in the industry knows, Detroit's BBDO office will close. An estimated 485 employees will lose their jobs. This is an incredibly sad thing. Over many decades, BBDO has done good, great, and even world-famous work for the Chrysler's brands, most notably the ads they did for Jeep, but in the end they were too reliant on one big car client, and when that client looked elsewhere, they were out of luck.
So clearly, just as with the rest of Michigan's economy, one thing that would help local advertising agencies here is greater diversification. Yes, to a large degree, it's up to the agencies themselves. Doner Advertising has thrived for years without a domestic auto account. Campbell Ewald has done an admirable job of attracting a range of clients outside the industry, including award-winning work for the U.S. Postal Service and the Navy. My own agency, Team Detroit, has also recently added Scott's Miracle Grow, Ohio Art and Warrior Sports to its roster.
But in extreme times like these, extra efforts are perhaps necessary and there is additional leverage that a smart, proactive state government could provide if it decided to act. It occurs to me that a notion similar to Ludwig's could bring additional help to the region. Despite its myriad of woes, Michigan is still home to many large, thriving, successful businesses, including Kellogg's, Whirlpool, Domino's, and Herman Miller. These are multi-million dollar brands whose collective advertising budgets add up to billions of dollars. But Kellogg's advertising agency is based in Illinois, Domino's is based in Colorado.
If Granholm and the state government could find a way to entice these companies - through tax incentives and other means - to hire advertising agencies located within their own home state, it would immediately put millions of dollars annually back into the state's economy. Now, perhaps these companies are perfectly happy with their current advertising, though it would be hard for them to argue that these ad agencies are serving them in a demonstrably better way than what they could get right here at home (I, for one, cannot remember seeing one single great Kellogg's ad nor one memorable Domino's ad in the past three years. Can you?) But obviously this isn't about coercion; the companies would still be perfectly free to choose. This is all about the carrot, not the stick. Perhaps they will say that Michigan agencies can't sell as well as agencies elsewhere, though, given the chance, I'm sure we could convince them otherwise (we are in the art of persuasion after all.)
All the state would do is develop and promote incentives to encourage these large, global companies to begin a conversation with some of these agencies. Even if just one of these giants moves their marketing here, the incomes generated will end up supporting local economies (the restaurants, the dry cleaners, etc), while the additional tax base would support education and local infrastructure.
So the companies would win, and not only because they would get equal - and probably superior - service from local agencies, but also because their standard of living would be positively impacted as well. Their own schools would be stronger, their own roads would have fewer potholes, their neighbors would be happier, and life would be better. Who knows, maybe their homes would even be worth more.
There would be at least one added benefit. After firing BBDO, Chrysler has split the account, hiring new agencies in Texas and Minneapolis. Meanwhile, GM is considering agencies for Cadillac that are based in New York. By creating the right sort of incentives, Michigan could even encourage the auto manufacturers to keep their marketing dollars—and jobs—here in Michigan too. That wouldn't be a bad thing, would it? After all, we do still love our car companies.
Toby Barlow is chief creative officer of Team Detroit, an advertising firm.