July 31, 2013

The Light At The End Of The Internet

On May 20th, on the subject of "native advertising," I wrote...
"Nobody seems quite sure what they mean by native advertising. But I think I know what they mean. They don't know it yet, but they mean using traditional advertising strategy on the web."
For years, while the cultural impact of the web has grown enormously, I've been skeptical of its alleged brilliance as an advertising medium. Other than search, and to some degree email, it has been my belief that web advertising has been performing way below expectations.

There is a simple touchstone I apply: what mainstream, non-web-native brands have been built by online advertising? The answer is... I can't think of any. Consequently, I think of the web as a tactical medium and not a strategic one. It's where you go for sales promotion, but not brand building.

In recent months I'm starting to see some hope for the web as a serious ad medium.

First, after a thousand starts and stops, Facebook has developed some worthwhile advertising properties. In the past I've made the following comments about Facebook: 
  • "Facebook still hasn't figured out how to sell its 900 million subscribers to advertisers. If they do, it will become a huge advertising hit. But until they do, I remain skeptical."
  • "They're sitting on a gold mine, but they're throwing away the gold and selling the dirt."
  • "The platform doesn't matter. Mobile or immobile, advertising that is invisible is worthless. Period. Exclamation point." 
  • "They need to offer big-time advertisers something of real value, not the crap they are currently selling."
I believe Facebook has started to figure this out. The "native" (native my ass) ads that are running within the Facebook stream have impact. They are visible. Facebook has stopped trying to pretend that they are not in the ad business. As I also said back in May...
"... the best hope for online advertising is not pie-in-the-sky nonsense about conversations and relationships... It is taking the traditional principles of interrupting and grabbing attention, and applying them to the web."
Their recent financials, as reported last week, indicate that at least for the short term, Facebook is showing much better results. Now their task is to find the right balance between advertising and content or they will start to see erosion of their audience.

Another hopeful sign for online advertising is something that Google announced last week. Chromecast is apparently a thumb drive that you insert into a USB port on your device and it broadcasts anything from your computer to your television. At least in theory, this sounds simple and workable. We'll have to try it and see. If it works as advertised, it may actually presage the imagined "convergence" of the web and TV that the world has been promised for 15 years.

As we brilliantly said here back in 2008...
"I'm starting to get the feeling that the web's killer app is television."
We'll see.

July 30, 2013

Playing The Other Guy's Game

Over 20 years ago I left the agency business for the first time. We had sold our agency to a "global" network and after two years of working for them I decided it was not the life for me. I took the money and ran.

For three years thereafter I did creative services (mostly TV spots) directly for clients. In that three-year period I pitched against ad agencies half a dozen times. I only lost once. I learned a very important lesson during those three years -- clients hated agencies.

Behind their backs, they laughed at agency "strategic abilities." They put no value on "account service" ("all it does is keep the agency from fucking up, it doesn't do a thing for me.") They thought media planning and buying were commodities they could get anywhere. The value they saw in agencies was in creativity. They believed the only place they could get good advertising was from an agency. If they could get it somewhere else, they would.

Apparently, the advertising industry has decided that it is no longer in the creativity business.

According to the OmniPub press conference in Paris on Sunday, and the analyses in the news media yesterday, the primary rationale given for the merger between Publicis and Omnicom had nothing to do with creativity. It was mainly about their ability to compete with Google and Facebook in the collection and utilization of data.

It is not clear to this shallow mind how this new entity will be any more competent to collect and utilize data than the two old entities. I am not alone.
“I think it’s a total misdirection to think that you can leverage the scale and advantages of big data if you’re bigger. Quite the opposite,” says Simulmedia’s Dave Morgan. “These aren’t technology companies, and you don’t get better tech development out of consolidation.
Having run ad agencies myself, it is my experience that the important data about consumer behavior comes primarily from 1) the brand, and 2) media and media research companies.

Traditionally, the agency's role has been to 1) misinterpret the data 2) create questionable strategies from the data,` and 3) buy media carelessly. The idea that the agency will now be the collector and keeper of data and the go-to developer of media technology seems highly unlikely.

There are still a few agencies around that do terrific creative work and still a few clients who value it. But if we are to judge by the rationale these two agencies gave us for their merger, the agency business is betting its future on the assumption that clients will believe that the value they can get from data and technology is greater than creativity.

Let's assume for a moment that all this techno/data hysteria is valid. Since Google and Facebook essentially control web advertising, OmniPub's strategy must assume that their clients will trust them to know Google's customers better than Google does and Facebook's customers better than Facebook does. Otherwise, why not just use the data Google and Facebook (and every other online media channel) will give you for free when you make a buy?

It is hard for me to believe that even clients are that stupid.

The ad industry has decided to play the other guy's game. They are now competing in an arena in which they have distinct disadvantages. They are not as good at data or technology as their competitors. They are quietly abandoning creativity, although it is still the one and only thing that clients can't get somewhere else.

Richard Pinder, former COO of Publicis says...
“...the bulk of the enterprise’s activity is still about finding, creating and executing inspirational ideas to motivate the world’s population to choose one brand over another...there is a point beyond which scale can actually be a disadvantage—talent feels lost, ideas get killed by people who have no idea what the clients’ needs are and everything takes too long and costs too much”
Or as we like to say:
"Creative people make the ads. Everyone else makes the arrangements."
It is very tempting to predict that the ad world's desperate attempt to remake itself as a technology industry will lead to failure. But I've been around business too long. I am too  cynical to underestimate the remarkable power of big and dumb.

The Type A group will be doing a closed-circuit broadcast to about 200 TV stations today throughout North America on the subject of "The Battle For The World's Most Valuable Consumer" (people over 50.) If your group can profit from this one-hour talk, you are urged to contact us.

July 29, 2013

Advertising Industry Gives Up

I would like to be all outraged and upset by the announcement that Omnicom and Publicis are merging. But I can't. It is just the advertising industry's way of telling us that it has joined the parade.

As in so many other fields, the ad industry has discovered that it is way more profitable to provide a mediocre product to a lot of people than a high quality product to a few.

Just look at the airline industry, the banking industry, the telecom industry, the fast food industry. They provide mediocre products to massive markets. It's what huge companies do. It's what markets demand.

If you're a lazy, aristocratic CMO of a global corporation do you want to go out and find the best creative agency in Indonesia? The best digital agency in Korea? The best media agency in Argentina? Are you fucking kidding? That takes work.

Hire a worldwide bullshit factory and let some account director worry about it. You have powerpoints to prepare and conferences to address and, soon, football games to attend.

The boys in the management suite will applaud your wisdom for hiring one entity that can "do it all" (yeah, right) and "save you money" (yeah, right) at the same time.

Hiring OmniPub (or whatever dreadful name they've come up with) turns laziness into a virtue, and stupidity into foresight.

It is the perfect solution for the emptiness of our time. 

The newspaper articles, the business magazines, the TV pundits, and the bloggers will all be busy reporting on how this will affect the clients of this new agency, and what the profit picture is for Wall Street, and which big shots will get new offices and which ones will get walking papers.

No one will report on the important stuff. No one will talk to the rank and file who work for these monkeys and can tell us the truth about how corrupt, disjointed, unmanageable, and feckless they already are -- before they double in size.

But you know what? Nobody gives a shit.

No one is willing to spend for quality. No one wants to pay for service. No one cares to work very hard.

So let's give the suckers what they want and be done with it.

July 26, 2013

Friday Follies

Sad But Funny
George Zimmer, recently dislodged founder and long time TV and radio spokesman for the Men's Wearhouse, had this to say about ad people:
"...what really drives success, in my experience, is repetition and consistency, not creativity. I think people who are in the [ad] business tend to get more hung up on the creative aspects. They start to think of themselves more as artists and less as businessmen. We have the same problem with tailors, by the way."
Even if you hate the sentiment, you have to admit, it's a funny line.

Ad Contrarian On Campus
Very proud that my book, 101 Contrarian Ideas About Advertising, is one of only 3 books that is required reading at a major university this fall in a course about "Strategic Communications."

I read the course requirements and it's a good thing I wrote the book because I wouldn't qualify for the course.

Some Upcoming Gigs
The Type A's have some interesting gigs coming up in the next several weeks. Here are dates and places.
  • July 25: STAR (Society for Television, Advertising and Radio) San Francisco, ("Turnaround Marketing")
  • July 30: Noll Media Satellite Seminar, US & Canada ("The Battle For The World's Most Valuable Consumer")
  • August 22: Aging 2.0 Conference, San Francisco ("The Battle For The World's Most Valuable Consumer")
  • September 19: Portland Ad Federation ("Social Media vs Traditional Media")
  • September 26: Buffalo, NY Ad Club ("The Golden Age of Bullshit")
  • October 3: Travel Marketing Association, Hot Springs AR ("The Battle For The World's Most Valuable Consumer")
Some of these are open events. If you're going to be around, please try and drop by.

The Type A's at Noll Media's Satellite Seminar on June 4th. We'll be back doing another one on July 30th.

We are trying to do about one or two speaking gigs a month. If you'd like to book us for a conference or event, it's best to do it early. We're happy to discuss topics and costs. Just email us at info@typeagroup.com.

July 24, 2013

What Are BDAs Really Good At?

Recently I was talking with the ceo of a tech company about doing some consulting for them. We were having a nice conversation when he said, “But, Bob, the one thing that concerns me is that we are a business-to-business company and you spent your whole advertising career doing consumer advertising and marketing."

I acknowledged the truth of the statement and then went on to use one of my horrible baseball analogies to explain why it was irrelevant. My analogy went like this. A good pitcher is a good pitcher regardless of what team he is pitching for. It doesn’t matter if he has a Yankees uniform on or an Astros uniform. A good pitcher can pitch well for every team, a bad pitcher can’t pitch well for any team.

Similarly, people who are good at marketing are good at it, and people who are bad are bad. You're not likely to find a person who's terrible at marketing peanut butter but great at marketing jelly.

Later in the day I was thinking about our conversation and I had an epiphany (or an apostrophe or an epitome, or whatever the hell you call that thing you have.)

It is true that my clients were in the consumer marketing business, but I (as an agency owner) was not. I was in the B2B business. I had to convince businesses to buy what my business was selling.

Agencies do consumer marketing on behalf of their clients, but B2B marketing on behalf of themselves. In other words, I did B2B marketing successfully for 40 years and didn’t  realize it.

Which brings me back to my current obsession with globalized agency holding companies (the great George Parker calls them BDAs – Big Dumb Agencies.) Four of them currently control over 70% of the advertising in the US.

According to the people who know and judge these things, these BDA's are generally considered to be hack-ish and not very good at creating interesting advertising.

The way I see it, they may not be brilliant at communicating with consumers. But you have to admit, if they have sold themselves to 70% of the marketers in the US, they must be awesome at B2B.

July 22, 2013

The 5 Dumbest Ideas About Online Advertising

The phenomenal rise of the internet as a medium of communication, information, and entertainment has given rise to some equally phenomenal conceptual flops about advertising.

Back in the day, online advertising was going to "change everything." It has changed nothing. Advertisers are still mostly doing on the web exactly what they did in traditional advertising -- bugging the shit out of us with the crumbiest, most annoying ads possible in all the places we are most likely to be bugged and annoyed. Oh yeah, and millions of pages of self-serving "content" that no one pays any attention to.

Here at The Ad Contrarian Global Worldwide Headquarters, over the past six years, we've been chronicling the fantasies and delusions about web advertising that pass for "thinking" in marketingland.

Today we take inventory of these dumb ideas. We have selected our 5 favorites and we present them to you in one neat little bundle, in no particular order, but numbered to keep you on track.

Here are The 5 Dumbest Ideas About Online Advertising 
1. Interactivity
The hypothesis behind this daydream was that the same consumer who was frantically clicking a TV remote to escape from advertising was going to merrily click a mouse to interact with it. Marketers and agencies bought into this baloney big time. It didn't take long for it to become clear that no one wanted to interact with ads. The poor bastards trying to sell this stuff quickly changed the nomenclature from "interactive" advertising to "display" advertising. Fortunately for them, most of the flat tires who pass for "marketing experts" were too confused to realize what happened. The good news for the ad industry is that no matter how ineffectual banner advertising is, it just keeps growing and spinning off money. The rate of interaction with banner ads is below one click in a thousand. This is not interactivity. This is absence of interactivity.
2. The death of television 
From Let's Just Declare TV Dead And Move On, TechCrunch, November 2006...
"..the writing is on the wall...at the end of the day, people want to consume content without the friction of having to sit down in front of a television at an appointed time....There is a fundamental shift in consumer behavior going on..."  
In the 7 years since TechCrunch and the rest of the pundit digerati declared TV dead, viewing has been at its highest level ever in history. Other than that, they nailed it.
3. Permission marketing 
The concept here was that the "interruption model" of advertising was no longer viable and was being made obsolete by the web. The mantra was that "the consumer is in charge" and in order to be successful you had to charm "the consumer" into giving you "permission" to market to her. This has proven to be thoroughly wrong. In fact, the aforementioned banner advertising -- the poster child of the interruption model -- is growing at alarming rates and is in danger of taking over the entire Internet unless Brad Pitt gets in there and stops it.
4. The conversation 
This "big idea" posited that consumers want to have online conversations with marketers, and online engagement with brands. It turns out that even consumers aren't that stupid. This nonsense completely misinterpreted the relationship between consumers and the vast majority of the stuff they buy. It assumed every brand was Nike or Apple. The facts tell the story very clearly: the engagement rate for posts of the top 200 brands on Facebook is under 1/2 of 1%. Conversations? More like monologues.
5. Convergence 
If you believed the experts and pundits, TV and the web should have converged a long time ago. There have been a thousand different set-top boxes and gizmos that were supposed to effectuate this convergence. We were supposed to be watching all our favorite TV shows on YouTube and Hulu without the annoying interference of advertising. Convergence is nowhere near a reality. According to the latest data I can find from Nielsen, TV constitutes 98% of video viewing. Less than 2% of video is viewed on line, despite all the porn you're watching.
Now that you've read this and are feeling particularly smug because you figured this stuff out yourself a long time ago while your boss was deluded by the fantasies of web magic, let me give you a little advice. Do not take this and show it to her and say "see, I told you." You will only succeed in getting your ass fired for being a "Luddite dinosaur." Because no matter how dumb these ideas are, I guarantee you, your digital maniac of a boss is dumber.

July 17, 2013

eBay: Paid Search Is Worthless

A study done by eBay on the effectiveness of paid search for established brands has found it to be worthless.

The eBay study called Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment (no, I'm not kidding) concluded...
  • There is no short-term value in brand keyword advertising.
  • Stopping brand keyword advertising resulted in no detectable drop in traffic and sales. 
  • The non-brand keyword experiments show that SEM had a very small and statistically insignificant effect on sales.
According to the study...
"eBay historically managed over 170 million keywords and keyword combinations using algorithms that are updated daily and automatically feed into Google’s, Microsoft’s and Yahoo!’s search platforms."
Presumably, eBay commissioned the study to figure out how much of their search money was being wasting. Their conclusion seems to be: all of it.

Now before you read the entire study, just a warning. It is written in that academic style that makes your brains fall out, and includes sentences like this... 
“The instruments isolate the exogenous experimental variation in spending to estimate the causal impact of spending on changes in revenue.” 
Which I think means something like this...
"We wanted to see whether paid search is worth anything or is just another online whack-off."
It also has formulas like this...

I don't have room for the rest of the formula, but I'm sure you can work it out for yourself.

Also, the author seems dangerously fond of the word "endogeneity," which I have always felt is inappropriate in polite company.

After wading through several pages of this stuff, I think the most useful piece of information is this -- eBay concludes that people who click on a paid search listing are just looking for a shortcut to a website which they would find anyway. So why pay for it?

I have no idea whether this study is worth anything or not, but I'm hoping it starts a great big shit fight between eBay and Google, which would be tremendous fun to watch.

Near the end of the paper the authors pose this rhetorical question about paid search:
"...why do well-known branded companies spend such large amounts of money on what seems to be a rather ineffective marketing channel?"
And they answer thusly:
"...Google offer analytical advice that is not consistent with true causal estimates of ad effectiveness."
Which I think means something like this...
"Google is full of shit."

Big thanks to Dave Trott for sending me this study.

July 15, 2013

The Devolution Of Social Media Marketing

Every time I try to explain to someone who is not in the ad business (and some people who are) why social media marketing has been a disappointment, I get the same response:
"But how can you say that? Facebook has over a billion users... Twitter is the medium people have used to overthrow governments... Pinterest is this and Instagram has that...and...my daughter is constantly using social media and... and...and..."
What people don't seem to understand is that social media and social media marketing are two very different things.

Social media has been a huge worldwide success. Social media marketing has not.

Social media is to social media marketing as news is to public relations.

News is generated by news media. The objective of PR is to influence that news. Social media is chit chat generated by individuals. The objective of social media marketing is to influence the chit chat.

Just as PR is rarely successful at manipulating the reporting of the news, social media marketing is rarely successful at manipulating chit chat.

Sure, sometimes Burger King's PR department gets a story placed somewhere and they have a big PR hit. And sometimes Wendy's social media effort pays off with a social media success. But both are rare and massively unreliable.

Do PR and social media pay out in the long run? If done well, I guess so. But no one with a functioning brain believes anymore that they can rely on either to carry their marketing water for them.

Regardless of what PR experts tell you, you cannot control the news. Regardless of what social media experts tell you, you cannot control chit chat. Just as people can smell PR disguised as news, they can also smell social media marketing disguised as chit chat.

As social media marketing has been exposed for not being the magic it was purported to be, its influence -- even in the world of social media -- has waned.

The early zealots of social media marketing claimed that it was going to replace traditional paid advertising. "Talking down to consumers" (the code words zealots use to describe advertising) was going to be replaced by consumers having "conversations about brands." This wonderful little fantasy soon became unmasked for the nonsense it was.

One of the confusing elements of this topic is a distinction that many don't understand. Just as social media and social media marketing are different things, social media marketing and social media channels are often confused.

Our most successful social media channel -- Facebook -- can barely be considered a vehicle for social media marketing anymore. It has mutated into a channel for delivering traditional banner advertising. Facebook's revenue model is basically no different from any other website -- they are selling ad space. They are not in the "conversation" business. They are in the advertising space sales business.

My informal estimate is that over 1/3 of a Facebook page is covered with display ads of some sort, either outside your feed or inside it.

Social media marketing is devolving into not much more than traditional advertising on social media channels. The delusion that consumers crave conversations with marketers and engagement with brands is quickly evaporating.

July 11, 2013

Top 10 Mistakes When Advertising To Grown-Ups

Yesterday I posted this on the Type A Group website and it got a great response. In case you missed it, I thought I'd publish it here today.

One of these days your phone is going to ring. Your boss is going to want to see you in his office.  He will say, "What is the biggest opportunity for growth we are currently missing?"

You are going to mumble and fumble. He'll say, "It's people over 50 you f***ing dimwit. They account for almost 50% of all consumer spending. They control 75% of the financial assets of the country. They account for 55% of all CPG purchases. They buy over 60% of all new cars. And we are not spending a f***ing dime to talk to them."

Then you will give him all the pathetic excuses for being a calcified bozo that marketing people always come up with and he will fire your ass and have you escorted out of the building with all your crap in a cardboard box, and you will never work again.

Don't let this happen to you!

Marketers who are awake and responsive are starting to understand that there is enormous upside in talking to people over 50. But there are also pitfalls.

The best thing you can do is hire Type A to help you develop a sensible 50+ initiative for your brand. The next best thing you can do is avoid these 10 mistakes:
1. Do not hold up a mirror. Don't try to show them who they are or tell them what they believe. They don't appreciate being treated like advertising clichés.

2. They are not grandma and grandpa.  They are Barack Obama and Jerry Seinfeld and Meryl Streep and Condoleezza Rice and Bruce Springsteen. Your idiot copywriters have no clue how to talk to them.

3. Don't be afraid to be naughty. These people grew up smoking weed and listening to the Rolling Stones. Don't be so serious. Make fun of young people. Make them feel hipper than young people. And speaking of young people...

4. They do not want to be like young people. Don't listen to the morons who tell you "old people aspire to be like young people." This nonsense is 20 years out of date. Do you really think Michelle Obama wants to be like Miley Cyrus? Do you really think Steven Spielberg wants to be like Justin Bieber? These people want to be youthful, but they do not want to be like young people. This is a distinction that is totally lost on the geniuses in the advertising industry.

5. They are not down-sizing. In 2010 people over 45 outspent people under 45. By one trillion dollars.

6. They are not "stuck in their ways" and unchangeable. They are just as likely to change brands as people under 50.

7. They are not just the spill from your 18-49 media plan. You need to speak to them directly and differently. This is not simply about media choices. It's also about message.

8. They are not a collection of maladies. Don't talk to them like they're a bundle of afflictions needing remediation. They are not. They are mostly healthy, wealthy and wise. They want to have fun, not medicine.

9. Avoid casting clichés. Please -- no more grandpa and Timmy going fishing. No more silver foxes making out in the elevator. No more goofy grandmas.

10. "They don't matter in my category." Bullshit. They matter in every category. Whether you're selling dog food or donuts, they matter. They spend half the money in this country. Hello?
Now get your 50+ strategy going before that phone call comes. 

July 10, 2013

Let The Fools Believe

I had a conversation with a few advertising friends the other night.

One of them was facing a situation I had seen before. She was about to make a new business presentation. The client was expecting that the presentation would include a considerable amount of social media.

The agency knew that the social media component was of little value and was substantially window dressing. It was there because it was expected, not because it was essential. It was there because, these day, if it's not there, you are considered to be either delinquent or retro. It was there because it is de rigueur and, consequently, you cannot afford to have the question raised about why it is not there.

This particular woman was suffering about this. She had a short amount of time to make her pitch and this social media recommendation was going to take much more time than it deserved. But it was also clear that the client in question was one of those naive believers in the miracle of social media.

I used to face problems like this frequently. Regular readers know I am highly skeptical of the magical power of social media, and also skeptical of the many supernatural powers of online advertising in general. And yet, I very rarely made a stink about it at the agency.

I learned early on that trying to talk people out of their religious beliefs is a waste of time, and is generally counter-productive. If you are dealing with a person who is reasonable, a logical argument is constructive. But if you are dealing with a true believer, a logical argument is pointless.

When clients would ask me what I thought I'd tell them the truth. But they almost never asked. True believers rarely do. Instead, they came fully loaded with zeal for their faith and I was not about to extinguish their zeal. It would only buy me trouble.

This is not just true of clients. It's also true of consumers. If consumers want to believe that during President's Day weekend they can get a better deal on a new car, then don't fight it. You're going to lose. Because I promise you, if you don't sell them a car that weekend someone else will.

JC Penney learned this the hard way. They tried to convince their customers that the old "biggest-sale-of-the-year-every-week" model of retailing is bullshit. But you know what? Their customers believed in the bullshit. The more Penney tried to wean them off it, the more they lost.

Faith appears in many guises. It is often irrational and preposterous. But it is always firmly held and best left alone.

There are many fights to be fought in the world of advertising. Fighting peoples' faith -- whether in their gods, their politics, or their media choices -- is a very high risk proposition, with a very low likelihood of success.

If they want to believe, let them believe.

And while you're killing time instead of working, be sure to read Top 10 Mistakes When Advertising To Grown-Ups 

July 08, 2013

The Web Is Not Medicine

"One has seen grand theories rise, only to be toppled by stubborn facts." Oliver Sacks
When advertising's overfed suits and black t-shirts and Jimmy Choo shoes reach consensus, it's a pretty good bet that what they've agreed on will turn out to be very wrong.

One of the unchallenged truths that advertising's chattering class has advanced these days is that "the consumer is in charge." This cliché has sprung wholly formed from two conflicting hypotheses.

First is the idea that the Internet has turned us all into wise, truth-seeking, hyper-informed consumers.

Second is the idea that we have become largely inured to the harmful effects of advertising.

The problem here is in the belief that the Internet somehow counteracts the effects of advertising and marketing in other media. It is thought to be some kind of cure for the affliction of consumer-itis that has plagued us since the dawn of modern marketing and advertising. It is a lovely little fantasy.

The web is not a cure for the disease of marketing. If anything, it has helped create a more virulent strain. As a result, the consumer is no more in charge than she has ever been. If anything, the huge brands that dominate media, including the web, are more in charge than ever.
  • Consumer brands that are dominant in traditional media tend to be dominant on the web. According to one source, the top Facebook brands are: Coke, Disney, Starbucks, Oreo, Red Bull, Converse, Skittles, Playstation, iTunes, Pringles, and Victoria's Secret. All of these brands were built in the traditional advertising world. The Internet has not diminished the power of these brands. It has created new opportunities for these and other leading brands to dominate in new ways. 
  •  One of the startling and unexpected facts of consumer behavior is that our addiction to the Internet has not much affected our time spent with other media. In fact, time spent with TV in the past few years has reached record high levels. We are consuming substantially more media than we have in the past. Our web habit has not replaced our broadcast habit, it has added to it. If you are going to contend that we are spending far more time with media but it is having less influence on us, you have a very high logical hill to climb.
  • I've always believed that a good touchstone for gauging what's really influencing people is to study what the culture is interested in. Today, there is nothing that people follow as assiduously as celebrity culture. Celebrity culture is 100% driven by media. Who would give a shit about Kim Kardashian if she wasn't all over media? Once again, it is a very dubious proposition to contend that media is dominating our cultural preferences but not our consuming preferences.
There is no scientific evidence to support the idea that consumers are any more "in charge" than ever. The closest we get to actual facts is the baloney that marketing windbags have hidden behind for years:  Consumers "say" they are more informed and less influenced by media. As if you would expect them to say anything else.

It has been my observation that over the 15 years that the web has been a mainstream medium, the big have gotten far bigger and have not been replaced by brands built on line as you would expect if "the consumer is in charge" crowd was right. Consumers are now facing more categories in which 2 or 3 huge enterprises dominate, not fewer.

The sentiment here at Ad Contrarian World Headquarters, as you might expect, is exactly the opposite from the received wisdom of the crowd. We believe that consumers are more influenced than ever by media driven ideas, imagery and notions. We believe the web has  been a factor in this, not an antidote. The consumer is not "in charge" -- Nike and Disney and Coke and Comcast and McDonald's and Starbuck's et al have gained power, not lost it.

The idea that "the consumer is in charge" is an illusion that has been created by naive Internet utopians who think that the ability to tweet "Ford Focus sucks" puts them "in charge." It's been sold to us by people with a vested interest in the silly notion that the web is some kind of anti-medium that cures corporate brand dominance.

It is nothing of the sort. It is just another means by which the people who can afford to dominate media also dominate consumer behavior.

July 03, 2013

Social Media Gets An Ass-Whooping From Google, Email

Over four years ago, in a post entitled Looking For Volunteers, I wrote the following...
"TAC predicts that when the frenzy over Facebook, Twitter, and other social media calms down and the dust clears, email and search will continue to be the dreariest and most productive forms of online advertising."
In an article on Monday  entitled "Email Is Crushing Twitter, Facebook for Selling Stuff Online" Wired had this to say:
"An endless stream...of advice from marketing consultants warns businesses that they need to “get” social... Despite the hype... it’s relatively antique tech that appears to be far more important for selling stuff online.
Wired's source for this article was a company called Custora that studied "72 million customers shopping on 86 different retailer sites." Their conclusion: search and email are far more effective at generating sales results than Facebook, Twitter and banner ads.

This chart summarizes their findings:

Here's a little recap of what Wired reported:
  • "Over the past four years, online retailers have quadrupled the rate of customers acquired through email"
  • "Facebook over that same period barely registers as a way to make a sale, and the tiny percentage of people who do connect and buy over Facebook has stayed flat."
  • "By far the most popular way to get customers was “organic search,” according to the report, followed by “cost per click” ads (in both cases, read: Google)"
  • "Email customers were nearly 11 percent more valuable than average. Facebook customers were just about average. Twitter customers, meanwhile, were 23 percent less valuable than average during the two years following that first click."
  • "Custora found that Google’s ads... lead not only to clicks but to purchases"
Now, of course, this shouldn't surprise any of the brilliant readers of The Ad Contrarian. We explained why Google was so effective and Facebook was such a whack-off in this post almost two years ago.

Social media may very well be the most over-hyped of all the online advertising miracles. Which is like being the deadest guy in the graveyard.

July 01, 2013

Do Advertisers Know What They're Buying?

On April 23 of this year, Apple reported...
“We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad,”
This report was remarkable for two reasons: First, it is generally believed that Apple has not introduced any new products or features of major interest to consumers in about two years. This in an industry whose oxygen is new products and features.

Second, it is also believed that Apple's advertising has fallen from the lofty standard it had established over previous years, to a point that it is now inferior to its rivals in the tech industry.

So how did they achieve record revenues?

I am not qualified to comment on the product part of the equation, but I do have a strong opinion about the advertising part.

The answer is this: advertising serves two functions. The first function is the one that every marketer focuses on -- sales. But the second one is at least as important. Advertising is business insurance. Advertising builds equity so that when you have a fallow period you still can generate income.

This is how Apple was able to report record revenue during a period of widely acknowledged creative foundering.

One of the reasons people continued to spend their money to purchase Apple products was not likely the result of advertising that they ran in that quarter. It was because of the advertising that Apple had run the previous 25 years. It bought them insurance.

Apple products were still believed to be technically superior, even though that is questionable. Apple products were still believed to be of higher quality, even though they may not have been. (Ironically, Apple's toughest competitor, Samsung, is also one of its primary suppliers.) 

The hundreds of millions Apple spent on "insurance" over the years paid off with billions in sales in the first quarter of 2013.

It is the rare marketer that truly understands this aspect of advertising value.

Several months ago I wrote about Coca-Cola's "senior manager for marketing strategy" who ragged on social media because, "We didn't see any statistically significant relationship between our buzz and our short-term sales."

It's not my habit to be defending social media (much of which I consider misguided and ineffectual) but the prevailing attitude among marketers that everything is immediately measurable completely ignores the insurance value (or in marketing jargon, "brand equity") that accrues to them through advertising.

One of the frustrating aspects of business is that when marketers engage in advertising most don't understand what they are buying or appreciate what they are getting.