March 17, 2014

Recognizing Foolishness In Everyone But Ourselves

One of the great truisms of marketing is that a good deal of consumer behavior makes no sense.

While we often go out of our way to scour Google for the lowest prices and the best reviews, we also frequently behave in ways that defy common sense. When it comes to buying stuff, or any other human behavior for that matter, we are not logic machines.

Back when I worked on Toyota, there was a great example of this. The Toyota Corolla was built at a plant here in California that was a joint venture between Toyota and Chevrolet. In addition to the Corolla, the plant also built the Chevy Geo Prism, which was the exact same car as the Corolla.

The Prism was built on the same line, by the same people, in the same plant as the Corolla. The only difference was that at the end of the line someone would either put a Corolla badge or a Prism badge on the car. The Corolla cost $1,500 more than the Prism, yet it outsold it 3 to 1.

We in the ad business are always reminding our clients that consumer behavior is not always rational. We lecture them on the importance of emotion as a factor in buying decisions and brand preferences. We explain to them that an ad is not a court case in which the best argument wins.

And yet, while we are exquisitely sensitive to the illogical nature of consumer behavior, we are completely oblivious to illogical behavior in our own business decisions. Our business decisions are just as illogical and just as governed by emotions as consumer buying decisions.

An example:

Last week I spent a few days in San Diego attending conferences that, in part, were about marketing to people over 50.

As you may know, a large part of my consulting these days is explaining to the flat tires in mainstream marketing how much money they're pissing away by ignoring the people with all the cash.

At one conference, sponsored by the American Society on Aging, I was on the faculty (I was a presenter) and at the other, called the Boomer Summit I was a "reporter" (these days, I'm not sure if that's a promotion from "blogger" or a demotion.)

To give you an example of how astoundingly illogical the marketing and advertising industries are, I think this one fact will do it:
If people over 50 in the U.S. were a country, they would be the third largest economy in the world:
1. USA
2. China
3. Americans over 50
They are bigger economically than Japan, or Germany, or Martin Sorrell. They buy 62% of all new cars and 55% of consumer package goods. And yet, they are the target for only 5% of US advertising.

We in advertising and marketing have all kinds of fairy stories and stupid bullshit excuses for why we don't advertise to these people. In fact, the truth is we don't advertise to them for reasons that are completely illogical and fully emotional.
  • We don't like being associated with old people
  • We like to feel young and hip
  • We can't build a career on success marketing to older people
  • Consequently, we have invented all kinds of bullshit reasons why we ignore them
One of the great failures of the advertising industry is how clueless we are to our own prejudices and illogical behaviors. We know how to recognize foolishness in everyone but ourselves.

Pathetic Excuse For Laziness...
I am in the middle of a heavy travel schedule and will be posting intermittently over the next month.


Cecil B. DeMille said...

Lazy is never going to change until there's a consequence for it. Unless and until marketing is utterly razed to its foundations and begun again with real knowledge and none of the jargon-babbling bullshit that masquerades as knowledge, nothing will change.

We've created an economy of idiocy. As long as that economy is successful, there is no impetus for change.

Stephen Eichenbaum said...

Right again. On everything.

steakandcheese said...

This is off topic, but it seems you were right when you said that the "ad pipeline can be screwed up in no time" when talking about Apple:

michaelmann said...

re: Toyota vs Chevy - I think cars might be one of the few areas where brand capital and loyalty actually count. Here in Australia in particular. I bought a Corolla a few years back, despite there being better cars in the price bracket. Why? Because they're bomb-proof. Toyota's are renowned for reliability and they hold their resale value better. I knew we'd sell the car after a few years, so (combined with a good finance rate) we bought a Corolla.

Kia and Hyundai make better featured and sexier cars for the same money. So do Ford. So do Nissan. But their improvements have only come in recent years, before that they were cheap Korean-built turds. Toyota has been making hardy cars for decades. Thus.....Toyota.

Jon P said...

In the case of the Geo, I may have gone with the Corolla instead, simply because I knew it would be 3 times easier to re-sell, and I'd get $1500 more for it when I needed to unload the thing.

But honestly, everyone realizes that pulling into a parking lot in a Toyota, while being embarrasing enough by itself, would be much less so than showing up in a compact Chevy. That perception alone could be worth thousands. Hopefully most people who drive around in Beemers are self aware enough to know it's probably not for the performance.

About advertising to the 50+ crowd: now that I'm part of it, I couldn't agree with you more. I'm just wondering when all this disposable income you speak of will start arriving.