September 16, 2020

The Mystery Of Modern Media

There was a time, not that long ago, when advertisers could reach just about everyone pretty easily. All it took was a lot of money and a simple media buy on a handful of TV, radio, and print outlets. Back then, harnessing the power of mass media was not a guarantee of success, but it was almost always a key component.

It helped create enormous brands like McDonald's, Coke, Pepsi, Nike, Apple, Ford, Chevy, AT&T, Tide, Crest, Bank of America, Visa, MasterCard, Toyota, Tylenol, Kleenex, Budweiser... OK, I'll stop.

Things are a lot more complicated these days. Media has fractionalized into much smaller entities while media consumption has increased significantly. It is not nearly as easy as it once was to reach mass audiences. While you once only had to choose among 3 or 4 video (TV) options, today you have hundreds. While you once had a few dozen print options to analyze, today there are literally millions of websites serving a similar function. A media strategist's job is far more daunting.

One of the results of this change in media reality has been a change in media strategy. Whereas brand builders once believed that wide reach was essential to building a dominant brand, this belief has gone out of fashion. It has been replaced by the belief that the most effective use of media is one-to-one, personalized messages.

I would like to offer, for your consideration, an alternative point of view.

It is beyond question that it is much harder for brand builders to reach mass audiences these days. But I would like to question the presumption that because reaching mass audiences has become more difficult, pivoting to a personalized, one-to-one media strategy is the correct response.

In other words, have we recognized the disease but prescribed the wrong medication? The fact that online media technology now allows us to tailor messages to individuals, doesn't necessarily mean it's a better idea. The fact that it's more convenient doesn't necessarily make it more suited to the job of building brands.

And the fact that mass reach is much harder to achieve does not mean that it is a bad strategy. It just means that it takes more work and perhaps it takes a more sophisticated strategy - and more sophisticated strategists - to execute properly.

Sadly, we have taken media strategy in the opposite direction. Despite the extraordinary complexity of the digital media ecosystem we have substantially tethered our media strategists to the most crude and unsophisticated aspirations -- high click rates and low CPMs. You can sit in media meetings for months listening to highfalutin' jargon, you can suffer endless data analyses, you can scrutinize this-ographics and that-ographics, but in the end when the reports come in and the chips are on the table, most likely it's going to come down to the crudest, least sophisticated and least challenging of outcomes -- clicks and CPMs.

This is evidence that the principles of brand building have been subsumed by the practices of the direct marketing industry.

The fact that brands that were built in advertising's era of wide reach like the aforementioned  McDonald's, Coke, Pepsi, Nike, Apple, Ford, Chevy, AT&T, Tide, Crest, Bank of America, Visa, MasterCard, Toyota, Tylenol, Kleenex, Budweiser...still dominate their categories a couple of decades after digital personalization became a "thing," ought to at least give us pause to consider that perhaps we have misdiagnosed the situation. 

There is also evidence outside advertising that mass reach is an essential ingredient to brand dominance. Newer mega-brands like Google, Facebook, Amazon, and Tesla, who were launched without huge advertising budgets, have profited from widespread media attention. They've achieved wide public recognition through PR, news stories worth billions, the shenanigans of ceo's, and the actions of investors and business commentators. Although not necessarily tied to advertising, their successes are also evidence of the power of mass attention in media.

One of the key ingredients in creating a dominant brand is fame. As I suggested in Advertising For Skeptics...

"There are several ways for brands to achieve fame. Some do it by being clearly superior and generating exceptional word of mouth. This is obviously the best way to become famous. Some get lucky. They’re good copy. In their formative years these brands spent very little on marketing but (it was) hard to open the business section without finding references to them.

Others become famous through imaginative PR initiatives, clever stunts, the charismatic personalities of their leaders, or a combination of these things. There are many ways to achieve fame. Sadly, positive word of mouth is wonderful, but rarely manageable. The likelihood of the press falling in love with you is one tick above zero. Imaginative PR is invaluable but very hard to come by. And charismatic leaders are one in a thousand and, let’s be honest, usually assholes. The most expensive way to become famous is through advertising. It is the most expensive, but also the most reliable. It is the only avenue to fame that you can buy your way into."

It may be that mass reach is still the key to building a dominant brand, but we need more sophisticated marketers and more sophisticated media strategists to show us how to achieve wide reach economically in an era of media fragmentation. 

What we have a hard time finding are huge dominant brands who have achieved their stature through one-to-one, personalized media. 

Instead of giving up on mass media because it is expensive and difficult to achieve, and defaulting to a problematic and largely unproven theory of personalized media, perhaps we need some smart people to create a better model of what mass reach in the modern advertising world looks like.

The essence of building a dominant brand has not changed -- because human nature has not changed. We are still far more likely to purchase products we are familiar with and we believe are socially acceptable. 

To those who think narrowly-focused, targeted media are more powerful than mass reach in building dominant brands, I would continue to pose this question: Do you think Donald Trump would be president if The Apprentice had been a webinar?

June 08, 2020

Carnival Of Hypocrisy

"By 2017, American companies had put at least $2.6 trillion into offshore tax shelters...Nike had $12.2 billion.... The company estimates that if its $12.2 billion was repatriated to the U.S., it would owe $4.1 billion in U.S. taxes... Designating its profits this way allows the company to avoid paying even a dime of U.S. income taxes on these profits..." - The Oregonian. More about this in a minute.

The horrible murder of George Floyd was treated by the marketing industry this week as an opportunity to express sincere desire for change. Sadly, it also exposed our talent for hypocrisy.

While brand marketers were exhorting us to end practices that cause social damage to black Americans, they were themselves deeply engaged in some of the most pernicious practices.

I have my own standard for evaluating a company's true commitment to social justice. It is this: to what extremes does it go to avoid paying taxes?

Taxation may be unpleasant. Tax dollars are often squandered on idiotic schemes. Paying taxes may reduce a corporation's returns to investors. But taxation is by far the most potent source of resources for societies to redress social ills. Taxation funds education. Taxation funds housing. Taxation funds health initiatives. Taxation funds social services.

There is no way around this -- when corporations take extraordinary measures to avoid paying taxes, they are doing extraordinary harm to citizens who have the greatest need for education, housing, health, and social services. If brands really believe that Black Lives Matter they must stop starving our country of the resources to improve black lives by hiding their taxable profits in offshore tax havens. Like it or not, to a substantial degree, taxation is the engine that funds social justice.

There will be those who say that these tax dodges are perfectly legal. In many cases they are. This fact impresses me not one bit. If you're going to use social media or paid media to pound your chest about social justice, you have a higher responsibility than just to obey the letter of the law. There is little honor in being legally compliant and ethically opportunistic.

Dear business colleagues -- if you really want to help heal this country here's step one: Pay your fucking taxes. Until you're willing to do that, please instruct your marketing departments to spare us the high-minded pieties.

Let's make this so simple that even a ceo can understand it: You can't be for social justice and against paying taxes.

April 13, 2020

Puzzles and Mysteries

I was rummaging through old blog posts and came upon this one from almost 13 years ago. Since no one read my blog 13 years ago, and I liked this post, I thought I'd re-post it.

An article by Malcolm Gladwell in The New Yorker leads me to believe that advertising people can learn something from spies about solving business problems.

Gladwell tells us about a national security expert, Gregory Treverton, who distinguished between two kinds of problems: puzzles and mysteries. His distinctions have great value for us.

Puzzles, he wrote, are problems for which there is not enough information. An example of a puzzle: Where is Jimmy Hoffa buried? If we had more information, we would know the answer. If someone told us “Jimmy Hoffa is buried in New Jersey,” we’d know a little more than we know now. If they said,“He’s buried in northern New Jersey,” we’d know even more. If they said,“He’s buried in the Meadowlands,” we’d have an answer to our puzzle.

On the other hand, there are mysteries. Mysteries are problems for which we have plenty of information, but no accurate analysis. An example of a mystery: Why do inner-city schools do such a crappy job of educating kids? There are thousands of studies. Every education department of every university in America has done a study on this; every committee of Congress has done a report on it; every editorial writer has a theory about it, and every pundit has an opinion. And yet, we have no definitive answer. More studies and more information are not likely to yield an answer. What is needed is an accurate analysis of the voluminous information that already exists.

Gladwell gives a wonderful example of the importance of distinguishing between puzzles and mysteries. In 1943, during World War II, the Allies were concerned about Germany’s boast of having developed a “superweapon.” Did they really have a superweapon, or was it just propaganda? There were two ways to deal with this problem. It could be dealt with as a puzzle, and spies could be sent out to gather more information. Or it could be dealt with as a mystery, and information the Allies already had could be analyzed.

Fortunately, American intelligence had a bunch of brainiacs who were known as “the screwball division.” They were “slightly batty geniuses” who were brilliant at analyzing information that was readily available to anyone. So instead of sending out spies disguised in mustaches to infiltrate German munition factories, the intelligence community gave the brainiacs German newspapers and radio broadcasts. These guys pored over the information that already existed and accurately predicted that the Germans had, in fact, developed a new weapon, the V-1 rocket. And they also accurately predicted both that it had been stalled in development and when it would be ready.

As a matter of fact, in retrospective analysis, these guys had been correct an amazing 81% of the time in their analyses during the war. A success rate many times higher than the spies.

How does this apply to us? We ad people are almost always tasked by our clients with solving some variation of the following problem: How do we sell more stuff? Sometimes it is a subset of that question like -- who is our target customer? or, what should our primary ad medium be? or, which of these campaigns should we go with? or, what should our brand position be?

One hundred percent of the time these problems are dealt with as puzzles, not mysteries. We always assume that one more study will yield the magic answer. Research is commissioned. Spies are sent out to live with customers, or to interview them, or hold group discussions with them.

The results of these endeavors are all too frequently disappointing. The methodologies are usually dressed up to appear scientifically bullet-proof. But the initial enthusiasm for the process often recedes when the answers aren't conclusive or unimpressive real-world results start rolling in.

On the other hand, most companies have stacks of research and reams of data about their customers and about their industry. This mountain of existing information is almost never consulted. In my entire career, I have never seen or heard a marketing problem treated as a mystery. I have never once heard a marketing officer say,“You know, we have all this research we’ve done over the years and all this data from the industry. Before we do more research, I want someone to go through this stuff and tell me what it means.”

Why do we prefer to deal with business problems as puzzles rather than mysteries? Because it's easier. Going through thousands of pages and discerning patterns is hard work -- the important patterns are not usually visible on the surface. It requires a special intelligence to be able to examine imprecise, unfiltered, inconclusive, often contradictory information and come up with a correct analysis.

It is much more comforting to send a researcher or planner out with a fake mustache and give her six weeks to come back with an answer. Unfortunately, as we all have experienced, an alarming amount of the research we do yields little of actionable value. The following year the report becomes part of the dusty heap of poorly analyzed information sitting around adding to the mystery.

So what are we to do?

The key is to break down the tyranny of titles and find out who our "slightly batty geniuses" are. Simply because an individual has the title of “account planner” or “research director” or "global strategy guru" or “CMO” doesn’t make him an expert detective. In my experience, planners and researchers tend to be puzzle doers, not mystery solvers.

However, there are people who are just naturally good at solving mysteries. They may come from the accounting department or the creative department or the media department or the sales department. We need to identify these people in our organizations. 

Before spies are sent out, these people need to be exposed to all the information that exists and allowed to weigh in on the questions we’re all trying to solve.

The hard part of solving marketing problems is not getting more information, it’s figuring out what the information we already have means.