ADVERTISING

Revolution for the Hec of It

Advertising CEO revolutionized the industry with fixed price offerings.
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For a small advertising agency, Philadelphia-based Harris Edward Communications Inc. (HEC) sure gets a lot of attention. Why? Well, it probably doesn't hurt that president Elizabeth F. Harris says she has a mission -- to revolutionize the advertising industry.

To get her revolution started, Harris released a 28-page catalog in January, offering fixed prices for more than 100 different types of advertising projects, from stationery design ($2,160) to 30-second television spots ($15,320). This was heresy in an industry in which compensation is negotiated on a case-by-case basis. So was Harris's introduction of discounts for volume purchases.

Since its release, HEC's catalog has generated much talk in the advertising world, not to mention articles in everything from Advertising Age to The New York Times. But Harris, 34, insists her list is more than a publicity stunt. Harris says she was shocked at the inconsistent pricing she found in independent agencies when she became president of HEC in 1981. As she grew the company from a one-woman show to a 35-person agency with $18 million in 1987 billings, she tried to figure out a rational pricing structure. By calculating her average production costs for various types of projects, Harris created an in-house price list that became the basis for her published one. "Nobody has ever seen this business as a commodities market," she says. "And I do.'

Harris's critics couldn't disagree more. Advertising is a creative medium, they argue. "You can't sell this stuff as a commodity," says Fred Mitchell, editor of The ADvisor newsletter. "It's not going to take off." And while the plan may make sense for smaller advertisers, says consultant Alvin Achenbaum, it's too unwieldy for larger ones.

But Harris is unfazed by the criticism. Businesses, she says, need advertising budgets they can understand and count on, which is precisely what her plan offers. Since January, she adds, HEC has gained two new clients and had a fourfold increase in requests for presentations. She predicts 1988 billings will rise more than a third, to at least $25 million.

As for the revolution, even Harris concedes it will take time. "My competitors aren't going to copy this idea until they see they're losing business," she says.

-- Martha E. Mangelsdorf

* * *

A Price Sampler
Here are some selections from HEC's price* "menu" for projects purchased à la carte:

10-second straightannouncer radio spot $415

One-page news release 515

Black-and-whitefull-page print ad 5,535

In full color 7,110

Three-component direct-mail kit, two-color, typically including cover letter, brochure, and outside envelope 12,870

60-secondtelevision spot 20,415

* * *

* Prices do not include "extras" such as broadcast time, postage, and mailing list rentals.

Last updated: Sep 1, 1988




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