Some Companies Say the Best Ad Agency Is No Ad Agency at All

Kareem Abdul-Jabbar jogs onto the basketball court to make his farewell speech--and the fans go bonkers.

The Lakers center slaps a high-five to teammate Mychal Thompson, then grabs the microphone. “I’d like to add just one footnote to my career,” he says. Then, the camera pans to his feet--which are tucked into a pair of LA Gear basketball shoes.

Wait a minute. This isn’t really Abdul-Jabbar’s last goodby. It’s a commercial. But it’s not such a bad commercial. In fact, the effectiveness of this recent LA Gear ad may be the fact that, initially, many people had a hard time deciphering whether or not it is an ad. So, which advertising agency created it? J. Walter Thompson? Nope. Ogilvy & Mather? Wrong. Chiat/Day? No way.

LA Gear created and filmed the ad all by itself. And the Marina del Rey-based athletic shoe maker has basically been creating all of its own ads since 1985. “To bring in an ad agency is a massive undertaking,” said Sandy Saemann, executive vice president of LA Gear. “If I gave an agency the job to shoot our commercials, I’d have to send 18 people to every shoot just to check and double-check that they do everything right. The way I figure it, I might as well do it myself.”

Although many people assume that all advertisements are created by ad agencies, that is hardly the case. And LA Gear isn’t the only big company in Southern California to make its own commercials. Walt Disney Co.’s film division has been creating all of its own ads--including coming-attraction teasers for movies--for several years.

The ad Disney created for the film “Who Framed Roger Rabbit?” even won a Clio Award this year--one of the most prestigious awards in the ad business. And while companies often look to ad agencies to purchase TV commercial time or newspaper ad space for them, a surprising number of Los Angeles area firms are opting to create their own ads.

Why? There are a number of reasons. Some companies are run by entrepreneurs who simply won’t listen to ad agencies. Others--particularly some retailers--face such tight time constraints that they feel that too much time is wasted by constantly bouncing ad ideas back from client to agency.

Some companies think that they can save money by doing it themselves, while others simply think that they can do it better on their own. Then, there are those companies, like LA Gear, that have had sour experiences with ad agencies.

“We wanted to see if an agency could do what an agency should do,” said Saemann, “but it turned into an absurd situation.”

The athletic shoe maker’s ad budget jumped considerably after the company went public in 1985. So, LA Gear turned to the Los Angeles office of Ogilvy & Mather to create some ads. The company and the agency disagree considerably about what happened.

Saemann said the agency presented them with an ad that featured a frog that croaked the word, Reebok. “Why would I want to waste time advertising another company?” Saemann said.

Ogilvy officials, in turn, say they never created such an ad. “We never presented anything even close to that,” said Gerald McGee, general manager of Ogilvy’s Los Angeles office. But after just two months, LA Gear dropped Ogilvy and has created its own ads ever since.

This do-it-yourself form of promotion--known within the industry as in-house advertising--seems to work well for LA Gear. In just five years, LA Gear has become the world’s No. 3 athletic shoe maker--behind Nike and Reebok. And while LA Gear expects to spend about $28 million creating its own ads this year, Saemann--who also directs the ads--figures that, overall, the company is saving about $2.5 million by not using an agency.

Not that everyone thinks that the LA Gear ads are top notch. One Los Angeles ad executive, who asked that his name not to be used because his company is still trying to land the LA Gear account, said: “LA Gear does well in spite of its ads--not because of them.”

Some TV viewers might be more familiar with LA Gear’s “It wasn’t a fantasy” ad campaign. In one of the more sensual ads, a basketball player finds himself shooting hoops with an extremely attractive woman. In another ad, a teen-age guy--unable to impress an attractive girl--finally vents his frustrations by telling her, “You’re such a brat.”

How effective are these LA Gear ads?

“I won’t pass judgment on the creative style,” said Jack Fleischer, senior buyer of adult athletic footwear at J. C. Penney headquarters in Dallas, “but the bottom line for us is, the LA Gear ads do sell product.”

Similarly, Buena Vista Pictures, which distributes movies made by Walt Disney Co., also creates all of its own ads. This includes TV commercials, print ads and even the coming-attractions promotional pieces--called trailers--that are shown at movie theaters.

All of the ads for the popular, animated film “Who Framed Roger Rabbit?” were made in-house. Likewise, recent ads for the movies “Dead Poet’s Society” and “Honey, I Shrunk the Kids,” also were created by the marketing department at Buena Vista.

“An outside supplier couldn’t be privy to all the information that I’m familiar with,” explained Robert Jahn, senior vice president of creative services at Buena Vista, which distributes Walt Disney Pictures, Touchstone Pictures and Hollywood Pictures. “On a daily basis, I see what’s being done, from script stage to finished product. I’m aware of all the pluses and negatives about every film simply because I’m here.”

What’s more, because he’s located at Walt Disney Studios, Jahn has constant assess to the people whose opinions on advertising can count most. For example, shortly after Buena Vista filmed an emotionally charged trailer for the Touchstone film “Beaches,” Jahn showed the trailer to Bette Midler, who starred in the film. She thought that the trailer was far too downbeat and suggested a much lighter one.

“So, I cut a second trailer that was far superior,” said Jahn, “and I don’t think that ever would have happened if it was handled by an outside agency. Remember, we’re here meeting with the principals all the time.”

A similar thing happened with the trailer for “Roger Rabbit.” Jahn showed an early trailer to Stephen Spielberg, the film’s executive producer. Spielberg suggested that the trailer include more of the action-packed cartoon from the beginning of the film. “It took this meeting with the makers of the film to show us where we went wrong,” said Jahn. And it isn’t likely that an ad agency would have had that opportunity, he said.

By creating the ads themselves, Disney also can save lots of time and money. When an agency is involved, said Jahn, “every time you want to change something, you have to call a meeting, bring them in and discuss everything. But as it is now, we can literally do it at lunch time.”

And Jahn figures that it costs nearly three times as much money for an agency to create an ad as it costs him to do it himself. A movie trailer that costs Disney $100,000 to make would cost about $300,000 for an agency to create. And a TV spot that Disney can put together for about $60,000 would cost about $180,000 at an agency, he estimated.

Of course, there are some disadvantages to snubbing ad agencies. “There are times when, for whatever reason, I just can’t seem to get it right,” said Jahn. “After three or four tries, I might say to myself, ‘Gee, it would be nice if this was someone else’s problem.’ ”

These are words that sound familiar to some ad executives. “After a while,” said Richard B. Edler, general manager of the ad firm McCann-Erickson/Los Angeles, “most companies that create their own ads decide they’re better off hiring outside resources.”

Recently, two Los Angeles companies--radio station KBIG-FM and Redken Laboratories Inc.--that had previously created their own ads decided to hire agencies.

“An ad agency can take a fresh look,” said Francine Stessel, director of corporate communications at Canoga Park-based Redken, which makes hair- and skin-care products. “They’re not influenced by what goes on here on a day-to-day basis.”

And radio station KBIG-FM recently hired Santa Monica ad agency Suissa & Associates. “It is much more expensive to have an agency create your ads,” said Stacy Okonowsky, director of marketing at KBIG. “But the end result justifies the product. When you look at all the money you spend buying commercial time, this is a drop in the bucket.”

Advertising executives say companies that create their own ads can lose their objectivity. “No matter how objective they try to be, the ads are usually a reflection of management’s thoughts,” said Dennis R. Coe, president of the Los Angeles office of Eiseman, Johns & Laws Advertising. “It’s tough to throw something on that table that is really different.”

But LA Gear’s Saemann, who once owned his own small ad agency, says that doesn’t concern him. “We’ve received hundred of letters from companies that want to create our ads,” he said. “There are companies that have changed agencies five times, and they still have terrible commercials.”

Pepsi Still Loyal to Lakers in New Spots

Los Angeles Laker Coach Pat Riley now has something in common with Magic Johnson besides basketball. They’re both pitching Pepsi.

In a TV commercial that premiered Monday on all three major networks, Riley stands in front of a Diet Coke and Diet Pepsi machine, then buys a Diet Pepsi. “Look at your choices, pick the best one, then go for it,” Riley says in the ad that was created by the Los Angeles office of Tracy-Locke.

Even though the Lakers were soundly trounced by the Detroit Pistons in the NBA championship series, a Pepsi spokesman said the firm had no qualms about Riley appearing in his first Pepsi commercial, which will air only in Southern California. “In our book,” said the Pepsi spokesman, “Riley is still a winner.”