October 28, 2020

The Luxury Of Strategy

Loudmouth ad weasels like me are always going off on the need for advertisers to abandon their addiction to short term-ism and focus their attention on the long term imperative of building their brands. 

There is plenty of evidence (including that of Field and Binet) that in the long run marketers are better served if their ad budgets are more weighted toward brand-building advertising and less weighted toward short-term promotional advertising.

The problem with this is that for a great many marketers surviving this week is a more compelling prospect than the promise of a magnificent brand five years from now. Many businesses simply can't afford to do advertising that doesn't deliver instant returns.

This is not just an unpleasant reality of business, it is a fact of life. Short term and long term objectives are not always aligned. There are many things we do for short term benefits that are harmful in the long term.

The world would be a much simpler, more reasonable place if we could abandon the habits that make life livable in the short run, and precarious in the long run. Sadly, the world doesn't work that way.

Tactics can often be a matter of life and death, while strategy is often a luxury. As Mike Tyson once said, "Everyone has a strategy until they get hit."

Having spent centuries in the ad business, one thing I learned is that the tactical always seems to drive out the strategic. When the rubber meets the road, and decisions about spending money have to be made, if financial resources are scarce, the tactical always wins.

One of the most powerful and unrecognized benefits of a successful brand is the financial wherewithal to support both tactical and strategic advertising. Most businesses don't have the means to do this.

Strategy is the advantage of the wealthy.

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.