Advertising as we know it has been in trouble for quite a while now. Entrepreneurs have known that for quite a while. In the era of accountability thanks to the Internet’s CPA/PPC, advertisement still gets away with promises and “eyeballs” but no measured results.
Of course ad executives will reply with confusing terms like recency (reach + frequency) and tired taglines like “building the brand by increasing mindshare”.

Mark Stevens has a great book on this and related issues in his excellent book “Your Marketing Sucks”

The principle of the book is pretty simple: if you spend $ 1.00 on an advertising effort, it should returns at least $ 1.01 to your bottom line, not including the $ 1.00 spend so that your net income will increase by at least 1 penny. And I agree! Of course it should not be true for EVERY single effort, but it should be true as a whole. If your entire marketing+advertising+sales+branding+whateveryoucanttocallit efforts don’t return their own expenses plus something . . . you are selling dollar bills for 90 cents!

What is really peculiar is that while the Advertising industry is in denial, and are doing their best to spin news (they are great at spinning), it’s quite amusing to observe that AdWeek, in order to cut costs, is no longer weekly, but it will be only be published 36 times per year. Link: AdWeek Changes Weekly Publishing Schedule.

]]> http://sodb.com/advertising/is-advertising-in-trouble.html/feed 0 http://sodb.com/advertising/nick-brien-is-half-right.html http://sodb.com/advertising/nick-brien-is-half-right.html#comments Fri, 09 Nov 2007 16:02:01 +0000 lorenzo http://sodb.com/blog/2007/11/09/nick-brien-is-half-right/

AdAge has a great article on Nick Brien, worldwide CEO of Universal McCann [link].   However I must take objection to a couple of statements:

1. “When clients say, ‘Talk to me about new media,’ I say, ‘No I am not going to talk to you about new media, I am going to talk to you about new marketing,’”.   I  can see his point, but actually it is a new world altogether, a world where audiences are empowered with tools that leverage their numbers and voices:  social networks, blogs, message boards, email, SMS, social networks enabled services like slideshare.net, and social networks enabling services like flickr.com.  It should be no surprise here; the notion that Markets are Conversations has been around for quite a while now.
2. “A brand is ultimately a promise …” This is where Nick gets it really wrong!  Marketing is the promise, Brand is Love.  Brand is the relationship between the audience and the product;  it resides in the mind of the audience, where the company is acting like a Brand Trustee.  Apple Inc. is the trustee for the Apple brand, and the iPod brand, and the MacBook brand.  Audiences may fall in love with iPod but not with MacBook, or they might fall out of love for iPod and fall in love with MacBook.  And just like in any relationship, the promises you keep cement the relationship, the ones you don’t will be forgiven up to a point, and then might be turned against you.  Marketing is the promise, the communication of things to come.

All in all, read the article.  The first half is better then the second half, but again, if you consider the audience (advertisers) and the context (AdAge), we can forgive a couple of inaccuracies.  Can we?

Inspired by: Study: TV Spots Reduce Consumers’ Sensitivity to Price ChangeDo your own research and you can prove anything you want. An easy way is to take a subset of a complex event, and draw conclusions linking your offering to the subset, bypassing totally the complex event.

The principle of “Price is an issue in the absence of value” correctly presupposes that brand is a big component of value. When we as consumers evaluate the purchase of one item over another one, brand is indeed one of the component of our perception value, and price becomes an issue only when the brand it’s not enough to justify the price differential with a less expensive brand.

Big Brands spend a lot of money on TV advertisement today, no doubt about it, and YES TV advertising does sustain Brands (A), especially the BIG ones. And BIG brands do enjoy the principle of “Price is an issue in the absence of value” (B), which results in a less price sensitivity of the consumer (C).
But there are many factors that sustain brands (A1, A2, ….An), therefore the correct logic is

(A1, A2, ….An) -> B -> C

Simplify the formula to

A -> B -> C

is what logic describes as “Non sequitur”, if it were true, a massive TV Advertisement campaign would be sufficient to enable any company to increase their prices without any loss of market share.

Building a brand is not as simple as deploying a TV advertisement campaign, it might have been at some point in time, but it is no more. And the concept of brand is now a Complex meaning, a mesh of Love, Trust, Community . . . (add your own qualities here), and it belongs to its audience, not to the company.

Good readings are:

• Trading Up: why we buy the things we buy;
• LoveMarks: brands as a Love relationshionship.