The agony and the agency.

• Author: Martin, Ed
• Position: North Carolina's advertising industry - Industry Overview

Keep the Model A name and 76-year-old cherry flavor, but convince teen-agers that your soft drink is cool.

That's the game plan for Cheerwine by Salisbury's Carolina Beverage Co. and its advertising agency, Trone Advertising Inc. of Greensboro. More than just an ad campaign, the soft drink's makeover points up many of the forces influencing Tar Heel ad agencies during the recent worldwide slump.

The drink Salisbury businessman L.D. Peeler concocted in his basement in 1917 had a faithful but limited following by the late '80s. Fanciers sipped fewer than 100 million cans a year, compared with a combined 40 billion for industry leaders Coca-Cola and Pepsi.

In October 1991, Cheerwine's agency, Long, Haymes & Carr of Winston-Salem, was acquired by Lintas: Worldwide, a New York conglomerate. Lintas is owned by Interpublic Group, whose stable includes such big New York agencies as Saatchi & Saatchi and McCann-Erickson, with thousands of clients, including Coca-Cola.

You must dump Cheerwine, Lintas told Long, Haymes & Carr. "It was quite a shock," Carolina Beverage President Mark Ritchie says. Cheerwine signed with Trone, which according to AdWeek is the state's third-largest agency. Trone's 1992 billings of $71.1 million were up from $51.2 million in 1990.

Trone and Ritchie set about repositioning Cheerwine. Gone is almost all newspaper and television advertising. Radio spots target not just teens but specific groups of teens: fans of rock, "urban contemporary" and country music.

"Soft-drink purchase habits are formed in the teen years, so we're focusing on 12- to 17-year-olds," Ritchie says. "The 17-to-24 range is our secondary target -- convenience-store shoppers. These groups don't read newspapers. If they do, they don't read ads. TV delivers, but it's expensive."

Trone's efforts appear to be working. With a media budget of less than $1 million, Cheerwine's 1992 sales were up 7%, three times the industry figure.

Similar stories can be told throughout North Carolina. Mergers, takeovers and downsizing have hit businesses; advertisers need to wring more from ad bucks, forcing agencies to wring more from employees; big agencies are becoming more prominent nationally, while little ones evolve or die; mass marketing slowly withers as targeted advertising focuses down to the street and house number.

Raleigh's McKinney & Silver -- an agency that spent the past three years bobbing up and down like a fishing cork -- apparently surfaced stronger than...