and better foods. Additionally, they buy many other items at the supermarket: Magazines, cigarettes, stockings, kitchen utensils, etc. *** all are paid for out of the grocery budget. Recently, you have seen several magazine and newspaper articles on "Why Our Food Is a Bargain." That is a correct statement, as it relates to the overall cost-of-living items, and especially when measured in terms of hourly wages related to purchasing power. Ten years ago, in 1952, the American factory employee worked 51 hours to earn enough money with which to buy the Government's monthly market basket of farm foods. This year, in 1962, 10 years later, he earns enough money from 37 hours of work to buy the same standard "market basket." He has the income of 14 hours work for spending for other things a real contribution to our total economy. In this country, we spend about 20 cents of our dollar income, after taxes, for food. This leaves 80 cents available for buying other things. In Russia they need about 50 cents of their dollar to buy foods. PROMOTION-MINDED INDUSTRY Our manufacturers are highly promotion-minded. In 1962, they will be investing $1.2 billion in advertising. A 1961 listing of the top 100 advertisers in 7 media showed that 30 of the first 50 manufacturers belong to GMA, and 57 out of the top 100. In addition to media advertising, our GMA members spent many millions of dollars in promotional material and in the marketing of their products. This year they will invest over $120 million in research for the creation of new products and the improvement of their old ones, and new uses for them. We are very promotion-minded. INDUSTRYWIDE TEAMWORK Our industry has a splendid record of teamwork cooperation of all the segments which make up the lifeline from farm to table. Our manufacturers enjoy a fine relationship with each other, and we work in fine harmony with the six national distributor associations and their members. This fine teamwork cooperation has contributed greatly to improving the facilities of distributing our products to the American people. CONSTANTLY CHANGING INDUSTRY Today's success of a company's business carries no survival guarantee for tomorrow. Many products which were considered old standbys yesterday have been replaced with improved models or with different products serving the purposes more efficiently and economically. Examples: Cake mixes have reduced the needs for baking powders and other ingredients. Detergents have taken the place of soap in many instances. Instant and frozen products have become regular household items. Any concern that does not invest heavily in research, in advertising, in new and improved products will find it increasingly difficult to keep pace with progress. COST OF ADVERTISING For this audience, it is not necessary to comment upon the rising cost of advertising, whether it is per page or per broadcast. You know the story, and GMA members know it. Our manufacturers are great users of advertising. Naturally, they are concerned about the rising costs, not only covering advertising, but all costs. While costs are increasing, competition is growing constantly more severe, and the rate of profit per dollar sales is heavily squeezed. What I want to say is that manufacturers must constantly realize a greater sales return from their advertising dollar. How can we bring this about? Last year we met with 16 top management people of national magazines. We wanted to discuss with them the facts of life covering advertiser-media relationships. We pointed out that many years ago the advertising department of the manufacturer and the sales department operated independently of each other, even though both had the same purpose, namely, to increase sales. Management did something about it. Now manufacturers are coordinating the work of both departments, and they key into the director of marketing. Both departments supplement each other. Taking a page out of that book of experience, we suggested to the publishers that the day was here when their editorial department and business department might better understand their interdependency relationships as they affect the operating results of their company; and as their operations may affect the advertisertheir bread and butter. While emphasizing that we would fight to the hilt to preserve their freedom to publish material of their own choice, at the same time, we invited them to consider publishing some favorable articles about the food industry instead of only singling out isolated cases of criticism. Certainly there are many fine things to say about this industry of interest to their readers and as the readers turn the pages and come across an interesting article, they will react more favorably to the advertisement, and be more inclined to purchase the product. We can point with pride to some of the things which have happened since our visit. Look magazine ran an article explaining the cost-of-living index published monthly by the Government. Reader's Digest, an article on "Why Our Food Is A Bargain." Ladies' Home Journal, a series of articles on food. Life magazine, several institutional ads, and is devoting its total November 23 Thanksgiving issue to food. We could mention many other consumer and business magazines that carry frequent favorable articles about this industry, like Family Circle, Women's Day, Food Field Reporter, and so on. These articles will surely help to create a better understanding of this industry and a favorable public attitude toward it. And our manufacturers-your advertisers feel more friendly to the management people. ADVERTISER AND TELEVISION RELATIONS I wish that I could say similar nice things about the relationship of our advertisers with television. Even though the networks receive about 65 percent of their advertising revenue from GMA members, there is lots to be desired as it applies to our relationship with their top management. We are not aware of any great amount of cooperation which television has extended to us in passing along interesting, favorable information to the public, information such as appeared in the magazine articles. The newspapers throughout the United States publish a great deal of information relating to food prices, food supplies, nutrition, and so on. I have before me an article appearing in the Hammond (La.) Sun with boxcar headlines: "How about a great big hand for our food enterprises?" We have stacks of such clippings from hundreds of newspapers. In contrast with these favorable items, we have seen some television newscasts where they seemingly took great delight in bellowing out stories that were critical of this industry. And they told only the critical side. It seems to us that television stations, which have a great influence and responsibility for forming public opinion, would want to report both sides of the story-the whole story. We are not aware of any attempts by television stations to verify the accuracy of critical statements, or to obtain the other side of the story. The press communicates with us freely when statements of doubtful accuracy are received. Another comment: When our Government's monthly cost-of-living index shows an increase, commentators make a big deal out of it, even though the increase as it applies to food might be one-tenth of 1 percent-the equivalent of about 3 cents a week added to the cost of the family grocery bill. Usually such increases apply to seasonal items which are certainly not a necessity for the consumer when she can select from some 8.000 other items. There is plenty of interesting material available about this industry for radio/TV use, and broadcasting such information should create a better public attitude, the advertising would be more effective, and the advertiser would get more for his advertising dollar. It is something to think over. GMA ANNUAL MEETING We just finished our 54th annual meeting-a 5-day meeting, including five luncheons and three dinners. It began with the GMA Food Forum on Friday. We had our regular meeting on Monday, Tuesday, and Wednesday; and on Thursday an all-day meeting devoted to "General Merchandise." We dedicated our meeting to the consumer-our boss. Our theme: The Food Industry Salutes the Consumer. We considered it appropriate to present a public story about this industry's accomplishments so that people will have a better understanding of what we do and how they benefit; and therefore they will not be as easily misled by the misinformation fed them by the propagandists. Media was well represented. Participating in the program we had six people from the national magazines, two from the daily press, and two women from radio, and, of course, our Thursday luncheon speaker was your own Pete Cash. The need of expanding our communications was stressed throughout. We all recognize that we are moving into an era when we must do a much better job of communicating with the American people, with our employees, with Government-with everybody. Doing a good production and distribution job, and supplying great varieties of tasty, nutritious foods at reasonable prices seemingly is no longer enough. This may appear strange but it is nonetheless so. Why is it necessary to move communications up to the top for priority attention? Because in this country we have people who make a living out of faultfinding and harassing industry. And the fine communication facilities and free speech make it possible for them to get their story told. At last year's hearings conducted by Senator Hart's committee on packaging, labeling, etc., the professionals had a field day. Using clever phrases and isolated cases as examples, they charged this industry with offering deceptive packages, slack-filled packages, mislabeling, insufficient labeling, and misleading promotions. In our industry we have some 300.000 retailers, some 20.000 manufacturers who produce the 8.000 items available in supermarkets, and a total business volume of about $80 billion. In any industry as large as this one and so involved, it is normal that some things will go wrong. By clever wording they used isolated cases as examples of wrongdoing and smudged the entire food industry. Even though we deplore some of their tactics, the professional voices of the consumer serve a useful purpose. By pointing out any shortcomings, they alert management to reexamine its own operations and make whatever corrections are indicated. So, while we welcome constructive criticism, at the same time, we must be sufficiently capable to get our story across to the American people to retain their confidence in us so that they will continue buying our advertised products. THE CHAIN OF DEMAND I want to come back to the theme of your meeting and to your statement that today it is pull that determines sales rather than push. As stated earlier, we fully agree with that. Our manufacturers and distributors are convinced of this and, therefore back up their conviction by investing more and more advertising dollars every year. Spending the advertising dollar has become a science in selecting where to spend his dollar-the advertiser must assure himself of getting the best sales results. He will place increased dependence on specific information as to the net effectiveness of media, as opposed to information now available on gross exposure of readers, viewers or listeners. So, it makes good sense that the advertiser and media cooperate to the fullest in working for the greatest sales results. I close my remarks with a very pertinent question: What can you do additionally that will influence your advertiser to spend more of his advertising dollars with you? [From Sponsor, editorial, Nov. 26, 1962] AN OUTRAGEOUS AND SHOCKING SPEECH WHAT WE BELIEVE IN AND WHAT WE FIGHT FOR If you did not hear, or have not seen, the speech delivered by Paul S. Willis, president of the Grocery Manufacturers of America, before the recent meeting of the Television Bureau of Advertising in New York, we suggest that you read it carefully. It appears on the preceding pages. In our opinion it contains some of the most outrageous and shocking statements ever delivered at an industry meeting. Worse still, it betrays evidence of a type of mentality and type of thinking which, unless checked soon and hard and fast, can easily destroy the whole structure of the American free press and free broadcasting. Mr. Willis, posing as a spokesman for an $80 billion industry, and waving the big bludgeon of a $1.2 billion advertising expenditure, told Television Bureau members that the time has come for more editorial "cooperation" with food manufacturers. Blandly, and with the kind of innocence usually seen only among the very senile or very infantile, he revealed the disgraceful fact that last year a GMA committee put the arm on 16 supposedly powerful publishers. In Willis' words, "We wanted to discuss with them the facts of life about advertiser-media relationships." In the GMA's bright lexicon, this means seeing to it that editorial and advertising departments understand their "interdependency." The magazine boys got the message. In the past year a flood of puffy, public relations-type food articles have appeared in Life, Look, the Saturday Evening Post, Good Housekeeping, This Week, Reader's Digest-name the proudest names in the mass magazine field, they've all knuckled under. Gleefully Willis detailed the results of the GMA powerplay. But he went on ominously, "There's lots to be desired in our relations with top TV managements." In other words, as one distressed Television Bureau member remarked at the Waldorf. "He's telling us 'We've ground the print boys under our heels; now we're going to start in on you.'” MISGUIDED, FALLACIOUS THINKING Well, maybe that will happen. But Sponsor believes that the time has come when all thoughtful broadcasters, publishers, and advertising men must stand up and challenge publicly the entire Willis-GMA concept. It is based on fallacious, misguided, misbegotten thinking, and the sooner its GMA adherents get slapped down, the better off we all shall be. Paul Willis is wrong, dead wrong. And the reasons why he is wrong have nothing to do with those old-fashioned, maudlin arguments about the need to preserve "editorial integrity" or protect the pristine virginity of editors and program people from the lecherous assaults of the advertising department. The real evil in the GMA approach, as TV Guide editor Merrill Panitt pointed out recently to the ANA, is that this kind of pressure leads inevitably to a weakening of mass media advertising values. There isn't an editor or broadcast program chief in America today who isn't subject to an almost unbearable barrage from public relations image-builders who want to cadge free time and space to promote their own special interests. And when this barrage is backed, as it is by GMA, with the ugly, bullying, implied threat of advertising cancellations, it is not always easy to resist. But it is absolutely imperative-not only for reasons of self-respect and integrity, but for the advertisers' own ultimate good-that the resistance be vigorously and constantly demonstrated. In any mass medium the primary responsibility of an editorial or program executive is to deliver an audience—a specific, sizable, interested, even enthusiastic audience. He owes this not only to himself and to his owners, but especially and most importantly to his advertisers. And the only way he can be certain of building, holding, and stimulating this audience is by constantly seeking out its real interests, and discovering new ways to challenge and appeal to it. He cannot hope to do this if he turns his medium into a house organ for special interests. He cannot do it with a policy of accommodation and appeasement. He must continually fight against those who say, "This is what I want your public to read or hear." He must stand firm in providing what his public itself wants to receive, and digest. Otherwise, he betrays himself, and inevitably betrays his advertisers. WHO DOES WILLIS SPEAK FOR? In presuming to act as spokesman for the grocery manufacturers industry, Paul Willis, as president of GMA, seems to have impressive credentials. But Sponsor wants to know-does Willis really have the specific backing of the companies which make up the association's membership? Among these are such important TV advertisers as Procter & Gamble, General Foods, and General Mills. Is Willis speaking for Howard Morgens, president of P. & G., Charles G. Mortimer, chairman of General Foods, and Charles H. Bell, chairman of General Mills? Sponsor has addressed personal copies of this editorial to each of these gentlemen and asked them specifically whether Willis, in his pressure tactics on mass media, reflects their sentiments. Or is he merely a harmless bureaucrat, speaking wildly and violently out of turn? If the GMA president actually represents the viewpoint of leading GMA member companies, then we believe these companies should themselves be attacked. If he doesn't, then he should be reprimanded by his membership. Hon. PHILIP A. HART, GROCERY MANUFACTURERS OF AMERICA, INC., Senate Office Building, Washington, D.C. DEAR SENATOR: When I appeared before your committee last week, your Mrs. Goodwin referred to an address I delivered on November 16, 1962, at the annual meeting of the Television Bureau of Advertising, Inc. She submitted for inclusion in the record editorials which appeared in Sponsor magazine and in Kiplinger's Changing Times. These editorials charged us with "pressuring" magazines and TV stations to use articles favorable to the food industry, implying that unless they did so, they might lose advertising revenue. I want to state most emphatically that at no time has the GMA or I as president ever pressured any media to use anything. Anyone who has read such "threats" out of my talks or articles did so with a prejudiced mind, and, I can only assume, for the purpose of making headlines or stirring up controversy. All of this, of course, had nothing to do with the proposals in S. 387. When Mrs. Goodwin made her statement, my immediate reaction was to say that since her subject had no relation whatsoever to your bill, and since I was not on trial, that her material should have been ruled out of order. However, feeling that this might have created the impression that we have something to hide, which we do not, I kept quiet. I have been president of GMA for over 25 years, and in my position I am constantly in the spotlight. To do a good job I must get along with people and always command their respect. This calls for constant observance of good ethics. Putting pressure on media certainly does not fall within the category of good ethics. I have every reason to feel very proud of my own record and integrity both in business and Government activities. Therefore, I feel justified in resenting the misrepresentations and false accusations in the editorials. For the record I enclose a copy of my November 16 address. It is proper to mention that this was approved by the president of the Television Bureau of Advertising before I addressed the meeting. I also enclose a copy of the article which appeared in Reader's Digest on "Why Our Food Is a Bargain"; also the article in Look, "What You Don't Know About Living Costs"; an article in the American Weekly, "Are Food Prices Too High?"-these are some of the articles to which Mrs. Goodwin referred. The publishers evidently thought that these subjects had sufficient reader interest to warrant using them in their publications. As further evidence of the great interest which publishers feel the American people have in food, Life magazine devoted its entire Thanksgiving issue last November to this subject. A copy of this special issue, entitled "Bounty of Food," accompanies this letter. My final comment is this: During GMA's entire existence there has never been a provision in any of the budgets for paid advertising. GMA has no plans for engaging in paid advertising. GMA has at no time attempted to influence any of its members as to where and how they should spend their advertising dollar. It has no interest in doing so in the future. Each member makes its own decisions as to where it spends its advertising dollar. The Sponsor and Kiplinger people must surely be aware of this fact, as is all other media. Cordially yours, PAUL S. WILLIS, President. |