Reconciling Sharp And Ritson

I'm much more interested in advertising than I am in marketing. But there are a couple of marketing people I pay particular attention to. They are Byron Sharp and Marc Ritson.

They are both professors and both work in Australia. Sharp wrote "How Brands Grow" which is a wonderful marketing book.

Ritson is one of the most entertaining and sensible speakers and writers on marketing you'll ever come across.

Unlike me, they're not just bomb-throwing blowhards with strongly held, ill-informed opinions. These guys actually know things.

They agree on a whole lot of stuff regarding the clown show that is contemporary marketing. But there's one thing they disagree on -- the value of segmentation and targeting.

At the risk of mischaracterizing their positions, let me be clear that these are my words and interpretations, not theirs. And this is my dumbass distillation of their positions on the subject.

Sharp thinks that in mass marketed consumer product categories segmentation and targeting are often empty exercises. Ritson thinks that segmentation and targeting are one of the essentials of marketing.

Sharp's argument is that for mass marketed brands, growth is a function of how many customers you can acquire, and that the best way to acquire as many customers as possible is to advertise to as many people as possible.

Sharp does a good job of convincing us that one of the attributes of leading brands is that they have a long tail of light users. He asserts that the best way to acquire a long tail is by talking to everyone.

Ritson argues that no one can afford to reach everyone efficiently. He would say that without segmentation and targeting, strategy becomes dangerously nebulous and media dollars get sprinkled lightly everywhere instead of focused where they can do the most good.

I'm somewhere in the middle.

I'm a big believer in mass media. But my experience in the real world of agency life taught me that this is often not practical, and that somewhere along the line the reality of budget constraints will interfere with the desire to talk to everyone.

In other words, every budget decision becomes a targeting decision.

So the key issue is what is the most efficient way for a major brand to use advertising dollars to acquire new customers?

I believe the answer is somewhere in between their positions. To the extent possible mass media should be utilized. But it should be tempered by a bias toward targeting heavy users of the category.

So when targeting and segmentation are employed they should be based on behavior, not demographics, psychographics, or any other thingographics.

As Prof. Sharp points out in his book, heavy users in a category tend to be promiscuous - they often use several brands in the category. Consequently, there is plenty of opportunity to attract new users to your brand from within the segment of the population that is already active in the category.

For example, the dominant brand of soft drink in the U.S. is Coca-Cola. But Coca-Cola only has about an 18% share of market. This means that 82% of the time people who drink soda don't buy Coke.

It seems reasonable to me that the best use of one's advertising money is to spend it against the component of the population that likes and participates in the category but has not been converted to your brand. This is an argument in favor of segmentation.

However, it ain't that easy to identify these people because in mass marketed categories like soft drinks they tend to be widely dispersed throughout the population. In this I agree with Sharp.

While I would love to spend all my ad dollars focused on actual soda drinkers, and particularly heavy using ones, it's hard to see how you can put up a billboard that is only seen by these people.

That leaves me in between the two professors. To me, the usefulness of segmentation and targeting have been oversold, but are still valuable. But the idea of spending money against light or non-users has also been oversold.

If, as Sharp asserts, heavy category users tend to be promiscuous, I would suggest that acquiring a long tail of light users for your brand is best achieved as a by-product of targeting the frequent users in the category.

It seems that this hypothesis could be easily verified or refuted by studying the category habits of light brand users. In other words, is the long tail of light Coke users comprised mainly of light users of soft drinks or frequent users of soft drinks? (Professors, have at it.)

While finer segmentation and targeting may be useful in niche categories and B2B, I believe for most mass marketed products there are only a few important segmentation distinctions that provide significant value and they are mainly behavioral (e.g., category users vs. non-users; luxury vs ordinary.) You will certainly sell more golf balls by targeting golfers rather than tennis players, but once you make that cut I suspect the returns of further segmentation diminish quickly.

So I guess I'm in the middle.

What makes advertising and marketing endlessly fascinating is that nothing is absolute. It's all about likelihoods and probabilities. I wrote a mostly incomprehensible little pamphlet called "Quantum Advertising" a few years ago that I'm strangely fond of and that speculates on the duality of the nature of advertising.

Sharp and Ritson are wonderful examples of how contradictory theories can exist side by side and still both be valuable and convincing.

Either Facebook Is Nuts Or I Am

In our last exciting episode, we decided that Facebook's business strategy is a pig's breakfast. They reach a billion people but all they can do is sell crappy little ads to divorce lawyers for $1.50.

We described this problem in esoteric marketing terms (well, esoteric for a dumb-ass blogger, anyway) as one of confusing the "demand creation" model with the "demand fulfillment" model (please don't make me explain that again. Just read this.)

So where does this lead us? It leads us to the conclusion that Facebook is in the wrong business.

First, let's start with a little media theory. Of all the overblown ideas being hustled by the online ad industry the biggest, by far, is "targeting."

Media science baloney notwithstanding, reach is way more important to big marketers than targeting. To paraphrase a former colleague of mine when asked by a cola maker who their target should be, he replied, "Any asshole with a mouth."

Big brands need big reach, not the diminishing returns of finer and finer targeting.

The "precision targeting" of online advertising is supposed to make it far more efficient and effective. Not even close. Not even close to close.

In fact, online advertising's record of motivating consumers is alarmingly terrible. With all their clouds full of data, Facebook ads attract 5 clicks for every 10,000 views. This is mindblowingly ineffective.

In fact, in a recent experiment a blank display ad -- blank! --with no copy, no art, no nothing, just empty space -- had a higher click rate than the average "precisely targeted" Facebook ad. The whole online targeting/effectiveness thing has so far proven to be a complete and utter joke.

Of course advertisers -- being dumber than stumps -- don't realize that "targeting" means absolutely nothing without impact. Who cares how many left-handed Episcopalian cheese-makers you can reach if they don't notice the ad? As a certain Mr. Bernbach once said, "If no one notices your advertising everything else is academic."

Secondly, why would a company that can reach a billion people even want to sell targeting? They should be selling anti-targeting. They should be selling reach. They are the only media property in the solar system that reaches a billion people and they are trading on their ability to reach falafel lovers in Yonkers.

Facebook has taken precision targeting bullshit to its logical absurdity. They're sitting on a gold mine, but they're throwing away the gold and selling the dirt.

So, you might ask, why is Facebook pursuing this strategy?

The answer is that they have to. They refuse to allow advertisers to use Facebook to create ads with any degree of impact. Consequently, they have nothing of value to sell to substantial advertisers. All they have is negligible little junk space for weight-loss hustlers.

Now we get to the speculative part of this exposition. Demurrals notwithstanding, I think the creepy Zuckerberg kid doesn't really want to be in the ad business. Like all these rich web phonies, he sees himself as some kind of high-minded visionary. Advertising just doesn't fit his smug idea of who he is and what he stands for. Just look at this ridiculous spot he produced to celebrate himself.

To him, advertising is a crass affair, unbecoming his noble purpose. Which is why it is relegated to invisible little postage stamps on a part of the page no one looks at.

In short, he's embarrassed about being in the ad business. To be honest here, so am I. But I don't have investors.

Here's what Facebook needs to do:

• They need to forget about "precision targeting." It's bullshit and it's not working. And it's not the business they should be in anyway.

• They need to sell reach. They have tried. But as currently configured it is a pathetic joke. Reach and frequency are irrelevant if the ad units have no impact. See Mr. B above.

•  The platform doesn't matter. Mobile or immobile, advertising that is invisible is worthless. Period. Exclamation point. All this hyperventilating about Facebook's mobile strategy is a red herring.

• They need to offer big-time advertisers something of real value, not the crap they are currently selling.

There are only two ways this is going to happen. First, the Z-man has to get used to the idea that he's in the ad business. Second, he has to get rid of all the Global Chief  Engagement Content Relationship Jargonators. He has to get some ad sales people who know what the f/k they're selling, and then give them something worthwhile to sell.

All The Marketing Geniuses Have Been Wrong. Duh.

For years now I have been spouting off about the wrong-headedness of online "precision targeting" versus mass media.

In 2012, in a post called Either Facebook Is Nuts Or I Am, I wrote...

"Big brands need big reach, not the diminishing returns of finer and finer targeting...They (Facebook) needs to forget about "precision targeting." It's bullshit and it's not working...They need to sell reach."

In 2013, in a post called The Hidden Danger Of Precision Targeting I wrote...

"One of the great benefits of mass media is that it lacks precision targeting. It reaches all the users in your category, including the users of your competitor's brand."

In 2014, I wrote The Power Of Sloppy

"Have you ever wondered how McDonald's and Coca-Cola and Nike and Toyota and Apple and all the other enormous worldwide brands became successful? For one thing, they were sloppy. They had to be. They didn't have big data or precision targeting. They couldn't punch a key and immediately identify left-handed Lutheran dry cleaners who rode recumbent bicycles. So they had to use mass media and talk to everyone. Not only did they not suffer for it, they prospered from it."

In 2015, in a post entitled "What If Targeting Doesn't Work" I wrote,

"What if all the 'precision targeting' we do is mostly unnecessary complexity masquerading as knowledge? "

Earlier this year, in Waste Not, Grow Not, I wrote

"We are thinking like direct marketers, not brand marketers. We are ineffectually using 'precision targeting' to try to engage the perfect individual, and by eschewing mass media we are harming our brand in three ways. 

1. We are not reaching those within our target segment who are not active on line or whose data we haven't mined.

2. We are not reaching the unexpected...buyers, of whom there are legions. 

3. We are not building a brand. Mass media advertising may be "wasteful" by the nearsighted standards of digital and direct marketers. However, some very wise people have pointed out that the nature of what we call "waste" may, in fact, be the very stuff that brands are built on."

And then there was this.

This week, my years of aberrant ranting finally got some vindication when The Wall Street Journal ran a story entitled "P&G To Scale Back Targeted Facebook Ads"

"Procter & Gamble Co., the biggest advertising spender in the world, will move away from ads on Facebook that target specific consumers, concluding that the practice has limited effectiveness.

Marc Pritchard, P&G’s chief marketing officer, said the company has realized it took the strategy too far. 'We targeted too much, and we went too narrow'

P&G could be the bellwether on how consumer goods companies and big brands use digital advertising. Over the past year some marketers, specifically consumer product companies, have discovered they need to go 'much more broad' with their advertising "

I hate to be the one to say "I told you so"...wait a minute. No I don't.

The High Cost Of Online Trash

The online advertising ecosystem is impossibly complex. Today, I will try to provide a highly simplified overview written for non-media-savvy, non-tech-savvy readers. The idea is to give civilians like copywriters, marketing managers, and auto dealers a big-picture view of the online display ad environment and a point of view on its pitfalls. I have tried my best to write it in plain English and make it so simple even a CEO can understand it.

As a copywriter, I am not an expert on media buying so be warned. To account for that, I have bounced this off some digital media experts who have assured me that it is as accurate as you can reasonably expect from a dumbass blogger. This is excerpted from my forthcoming book "Delusional: How Marketers Waste Billions on Fraud and Fairy Tales" which will be published later this year. Okay, here we go...

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“...We keep feeding the beast by pouring incredible sums of money into this unproductive, unmanageable abyss. Remarkably, we keep doing so even though we know that only 25 percent of every digital dollar reaches the consumer. … [that] represents more than $20 billion in marketing waste, inefficiency and ineffectiveness.” Bob Liodice, CEO, Association of National Advertisers

There are basically two ways to buy online display advertising.

• Contextually — Buying “contextually" means you buy the old-fashioned way. If you’re trying to reach golfers, you buy ads on the Golf Digest website. The context of the website determines the buying criteria.

• Behaviorally  — Buying behaviorally means you don’t buy ads on a specific website, you follow presumed golfers wherever they go on the web and buy ads wherever they land e.g., a beer website or an airline website. The behavior of the target determines the buying criteria, not the nature of the website. 

The big difference between traditional advertising and online advertising is that previously we could never know the behavior of individuals. Now, with "tracking" we can follow people across the web as we were never able to do with TV, radio, or print and reach them wherever they go.

The advantages of buying behaviorally are presumed to be…


Economy: Behavioral targeting reduces costs by allowing you to find those who are presumed to be golfers at cheaper locations than Golf Digest. By following a golfer to someplacecheap.com you can show her the same ad you might have shown her on the Golf Digest website, but at a lower cost. This results in lower CPMs (costs-per-thousand.) Keep this in mind because it will become important later.

Precision: Adtech helps you identify not just golfers in general, but left-handed women golfers over 35. Presumably, this results in "more relevant" advertising.

The concept of behavioral targeting has been widely adopted by the advertising industry. As a general rule, behaviorally targeted ads are bought programmatically (by software.) Programmatic buying currently represents about 80% of online display advertising.

On the other hand, for the most part contextual advertising is bought directly from the publisher or the publisher’s network. While it may employ the use of some software, it is most often not bought programmatically.* 

The question for advertisers is this -- is it more efficient to buy behaviorally or contextually? Because of the complexity of the system, it is almost impossible to compare apples to apples. But let’s try our best.

There are at least four aspects of behavioral targeting that are problematic:

• Accuracy: How accurate is the targeting data? Behavioral advertising is only as good as the data that informs it. There is troubling evidence that data residing in the adtech ecosystem -- particularly data bought from data brokers --- is not as accurate as might be hoped. We experience it every day when we get ads for stuff we bought three months ago and ads for products we have no interest in. In one test, targeting data bought from a data broker was able to correctly intuit the sex of an individual 43% of the time. A cat flipping a coin would be right 50% of the time.

• The “tech tax:” According to the World Federation of Advertisers and others, adtech, the technology that drives behavioral buying, costs about 60% of every ad dollar. In other words, buying, managing, and verifying the data that is needed for a programmatic buy eats up about 60¢ of every ad dollar. This means that of every dollar spent on behaviorally targeted advertising, only 40% is “working media.” Said another way, every ad dollar buys 60¢ of technology and 40¢ of advertising.

• The “fraud tax:” The web is riddled with ad fraud. The actual amount of fraud in the system is controversial, with estimates running from 5% to over 50%. Experts would agree that in open ad exchanges web fraud is probably at least 20% greater than it is when buying direct. Many would say it is far higher.
   
• The "long tail" of trash: There are tens of millions of websites. Many of them are pure junk. Many of them buy fake traffic to appear successful. Many of them aren't even real but are software that mimics a website for the purpose of attracting ad dollars. But they all sell ad space very cheaply. Programmatic systems see low prices on these junk sites and fake sites and bid on the worthless ad space they are selling to meet CPM goals. A famous case history involves Chase bank. They were advertising on 400,000 sites every month. They reduced the number of monthly sites to 5,000 (a reduction of almost 99%) and saw no difference in performance. An astounding number of the sites they were buying from programmatically were worthless.

One of the big problems in marketing today is math illiteracy. Too many people in advertising simply don’t know how to “do the math.” Let’s do some simple math and see where it leads us.

- We know adtech eats 60¢ of every programmatic ad dollar. This means when we buy programmatically we have 40¢ left for working media.

- If fraud takes another 20% of our 40¢, it means we have 32¢ left for working media.

- So, if directly-bought (contextual) advertising delivers 100% working media, and programmatically-bought (behavioral) advertising delivers 32% working media, behavioral advertising has to perform at about three times the level of contextual advertising to be a break-even proposition.** Put another way, the technology we are paying for only pays out if the resulting media buy is three times as effective.

Experts I have spoken to tell me that it is highly unlikely that behavioral ads can perform at three times the level of contextual ads. In fact, it is not unusual for them to perform at a lower level.

There are other reasons why programmatically-bought behavioral advertising is questionable:

Brand safety: When you buy directly you know where your ad is going to run. When you buy programmatically it can run almost anywhere.

Data abuse: When you buy directly you greatly reduce the need for the adtech industry to collect the massive amount of data that drives behavioral targeting and leads to data abuse and privacy abuse.
 Additionally, the data you use to target and track your most likely customers programmatically are fed into the adtech system and become easily available to your biggest competitors. It's called "data leakage."

Fraud abatement: When you buy directly you greatly reduce the potential for fraud. You usually pay directly to a publisher which means there is much less opportunity for fraudsters to insert themselves into the complexity of the process.

Transparency: The complexity of the programmatic ad ecosystem makes the tracking of ad dollars grossly opaque. This has resulted in scandal after scandal and is now the central focus of an FBI investigation. Directly bought advertising is far more transparent. You know who and what you are paying for and you know what you’re getting.

Behavioral targeting and its cousin, programmatic buying, are flawed concepts that have been sold to the marketing industry by people who have invested billions in systems designed to extract money from the ad buying industry. The more these people can complicate the system and insert themselves between the advertiser and the publisher, the more money they can extract.

Why is 80% of online advertising now bought programmatically? One very simple reason -- the "extractors" have convinced marketers that lower CPMs equal better value. As we said earlier, behavioral targeting often results in lower CPMs. But credible studies on this subject show that lower CPMs are not necessarily the result of more efficient buying. They are often the result of bottom-feeding -- more trash, more waste, more bots, more fraud and less value.

In traditional media -- where you know exactly what you're buying and the ecosystem isn’t drowning in trash and fraud -- using CPMs to evaluate efficiency is sensible. But online, where tens of millions of worthless and imaginary websites compete for your ad dollars by offering very low costs, using CPMs as a measure of efficiency is a mistake. Low CPMs are a truer indication of how much trash you're buying than how much efficiency you’re getting.

As regular readers know, I believe the adtech ecosystem -- and its evil spawn of tracking and surveillance -- are a dangerous and corrupting influence on advertising and on society. I hope this piece has demonstrated to the uninitiated that it is also bad business.

* There are hybrid ways to buy (e.g., programmatic direct) but we're trying to keep things simple here.

** In an effort to compare apple-to-apples and keep the math simple, I have given programmatic a working media number of 40% and direct buying 100%. In reality, direct buying doesn't produce 100% working media and programmatic buying doesn't produce 40% working media. The Association of National Advertisers says that programmatic buying only produces 25% working media I don’t know where that other 15% of “waste” for programmatic goes, so to be fair I’m going to assume that it is applicable to both programmatic and direct buying methods. In other words, direct buying probably results in something like 85% working media and programmatic something like 25% working media. But to keep the math simple I have given them both a 15% percent promotion to 100% and 40%.

Targeting's Diminishing Returns

In the past few weeks I've written a couple of posts (here and here) about the lousy record of "hyper-targeting." My bottom line on this has been... 

"As we have developed the ability to target people more and more precisely on the web, click-through rates of these hyper-targeted ads have dropped dramatically."

The question is, why? If you believe conventional advertising wisdom, being able to target people based on individual behaviors, attitudes, and demographics ought to make advertising substantially more effective. And yet no one's smarter than the facts. It hasn't made online ads more effective. So what's going on?

A thoughtful friend of mine, Bob Knorpp, who hosts the BeanCast, wrote the other day to offer his opinion. Bob said,

"The trouble with targeted marketing is no one is really willing to do it. We take a few data points, hit lame demographic messaging and call it one to one. Then people like you (correctly, I might add) point out that it isn't as effective as mass.
 
Obviously mass is effective. Targeted marketers who claim otherwise are full of shit. But saying that targeted marketing doesn't work based on the fact that no one is doing it effectively is not proof against the practice, as much as an indictment against marketers' improper use of the tools."

If I may paraphrase Bob's point, it is this: The problem is not with the theory of hyper-targeting, the problem is that it's not being executed very well. Only time will tell if Bob is right about this, but I'm unconvinced.

I have watched digital media people do what they do, and as far as I can tell, they're pretty damn good. I don't think that's the problem. I think the problem is deeper and falls into two areas.

First, I think that the smaller we slice and dice populations the quicker the returns are diminished. Once we get beyond a certain point, we are just playing math games and are not really increasing effectiveness. Vinny Warren says his old boss once told him, "You can’t parse humanity." While Vinny's ex-boss may have overstated his case a bit (there's no future in trying to sell golf balls to tennis players) I do believe there is an inverse relationship between the granularity of our targeting and its productivity. 

Second, I think that the quality of the message provides us with far more opportunity than the meticulousness of the targeting. The marketing industry seems to have bought into the fantasy that media strategy -- not the message -- is where the leverage is. It is pretty clear from the results that, so far, this hypothesis has been wrong.

Maybe Knorpp is right and we just need to execute more effectively. I'm officially skeptical.

Marketers And Millennials

Earlier this week, The Drum had a piece by Samuel Scott about marketing and millennials.  As an add-on to the piece, Scott interviewed me about my thoughts on the subject. The following is a reprint of that interview.

Samuel Scott: One rule in marketing is to 'hook ​ them while they're young', so marketers have usually devoted some of their budgets to that. After all, no one would want to purchase luxury cars in middle age unless they had seen ads for those cars their entire lives. How useful has this approach been in general over the decades? Has the usefulness of this practice changed in recent years?

Bob Hoffman: It depends on the category. People buy luxury cars in middle age that didn’t even exist when they were young (Tesla). But some products (Coke) are bought not because we saw an ad yesterday, but because of the ads we’ve seen for 20 (or 30 or 40) years. For the most part, advertising now because you think somebody’s going to buy your product in 20 years is stupid. We see that all the time in the car industry.

​Scott: A frequent comment about millennials is that they are still broke at worst or underemployed at best following factors including the 2008 financial crisis. How valuable of a demographic segment are they today? But even if they have less money today, will they not have more money tomorrow? What is the problem with brand advertisers targeting them with long-term goals in mind?

Hoffman: There’s nothing wrong with targeting millennials when appropriate. The problem isn’t targeting. The problem is obsession.

Scott: ​Of course, 'millennials' may be a demographic segment but they may not be a useful marketing segment. Why are there so many news articles and marketing essays today that focus on what millennials want as though they have a single identity and set of characteristics?

Hoffman: There is just as much diversity within generations as there is between generations. The idiotic idea that all millennials are this or all baby boomers are that is just the stupid lazy thinking that makes most of marketing a joke. Remember, marketing consultants and researchers have to make a living. So every few years they have to come up with new 'generational' bullshit to sell to jackasses in marketing departments and ad agencies.

Scott: Most news articles out there portray millennials in a negative light. They are supposedly narcissistic, selfie-absorbed snowflakes who are lazy and want trophies for everything. I don't believe that. But why does everyone have those negative perceptions?

Hoffman: You can always find a component of any population that is lazy, self-absorbed and narcissistic. Nothing new here. But because culture and technology change, the manifestations of laziness, self-absorption and narcissism change. Consequently there is always something that seems new to write about. It’s horseshit, but it’s good copy.

​Scott: ​ Many marketers believe in segmentation. But is there not a case for some B2C products and platforms with millions of users such as Snapchat or Coca-Cola targeting a broad demographic group such as millennials?

Hoffman: Sure. At different age stages we use different types of products.

Scott: From what I have read, baby boomers have all the money and are projected to live a very long time. So, why do you think that marketers ignore them?

Hoffman: I could write a text book on this subject. In short, marketers ignore mature people because we hate them. All the 'reasons' for ignoring older people are bullshit. Ignoring mature people and obsessing over millennials is just narcissism disguised as strategy. It is marketing by selfie-stick.

Scott: Can you cite any examples of brands losing sales or market share by focusing on millennials?

Hoffman: Scion targeted millennials, although at the time people over 35 bought 88% of 'youth vehicles'. It succeeded in becoming the car brand with the youngest owner population — and it went out of business.

Scott: What do you recommend brands do in the future in terms of generational targeting?

Hoffman: I recommend they ignore the ignorant, lazy thinking of generational cliches. Stop trying to hold a mirror up to your target and saying “we’re just like you”. Advertising should be about the desirability of your product, not your superficial assumptions about who I am.

Scott: What do you wish digital-focused millennials would know about traditional marketing and advertising?

Hoffman: I wish they knew how much they don’t know.

Scott: Lastly, I myself straddle the border between Generation X and the millennials. Generation X has always gotten lost in the debate. What do you think of us?

Hoffman: I think you’re all lazy, self-absorbed and narcissistic.

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In other news...
I have a new website which you are welcome to visit here.
The Australian Financial Review did a nice story on my misgivings about online advertising here.

Advertising's Arrow Of Progress

One of the interesting aspects of advertising that we have explored from time to time is whether we should think of it more as art or science.

With the growth in the use of mathematics, metrics, and data, it certainly appears like certain aspects of advertising are becoming more "scientific."

However, I am not convinced that advertising as a whole is any more scientific than ever.

From a practical standpoint, there is one factor that clearly differentiates art from science. In science, there is an "arrow of progress." By this I mean, science points in a direction and progresses toward that end.

If you have high blood pressure today, you are more likely to be successfully treated for it than you were 50 years ago.

If you buy a new car, it is more likely to last longer, be safer, work more reliably, and be more efficient than it was 50 years ago.

If you have a personal computer, it can do more things, more effectively, more quickly and more reliably than it did 50...wait a minute. We didn't have personal computers 50 years ago.

The point is, science provides us with technological progress by degrees that builds on itself and improves stuff.

Art, on the other hand, does not have an "arrow of progress." It's not supposed to. Art is about human interpretation -- emotions and aesthetics -- not ongoing improvements. You want to improve on the Mona Lisa? Good luck.

There is no way to talk about whether the work of Roy Lichtenstein represents "progress" from DaVinci. You may prefer one to the other, but to speak about progress is meaningless.

Similarly, is there an arrow of progress from Beethoven to Gershwin? Or Shakespeare to Updike? One may certainly have influenced the other, and styles certainly change, but talking about "improvement" is moot.

That doesn't mean art isn't inventive or innovative. Or that older forms don't influence newer forms. It just means that art moves unsystematically and, unlike science, we don't judge new art based on having "improved upon" old art.

So the question of whether advertising should be considered more science than art rests on answering this question: Is there an arrow of progress? In other words, is advertising more effective than it used to be?

If advertising contains a growing body of useful knowledge that has lead it to become more effective, it should be considered a science. If effectiveness has not improved over time, than it is probably more an art than a science.

Exploring the literature of advertising over the past ten years, one would have to conclude that advertising is less effective, not more. The literature is rife with assertions and research that conclude that advertising effectiveness has diminished over time.

There are certain elements of advertising that seem to utilize scientific principles more regularly -- direct response advertising, media planning -- but there isn't much in the way of conclusive evidence that there is an arrow of progress.

In fact, despite all the hoo-hah over the precision targeting of online advertising, behavioral targeting seems to be only marginally more effective than no targeting at all. And it is not at all clear that this marginal effect is even due to targeting. It may well be that the reason precision targeting appears to be more effective is that the people who are being targeted have been so carefully selected that they are the most natural candidates for buying the product, regardless of advertising.

But even if we stipulate that certain aspects of advertising have become more scientific, I would still contend that the overarching goal of advertising -- the creation of successful brands -- is no nearer to a scientific practice than it was when I entered the advertising business 40 years ago.

Some would contend that the emergence of interactive media, i.e., the web, has led us to a new understanding of brand building that requires electronic co-creating and community building with consumers. The problem with this argument is that a stroll through any supermarket in the country fails to uncover any significant brand of anything that has been built through either online advertising or social media.

From what I can see, despite all the technology we have applied and all the words that have been written, we have uncovered no new generally accepted principles about the nature of brand building or consumer behavior.

Most marketers are still thrashing around in the dark trying to either build a brand or maintain one.

Regardless of the growing veneer of scientific processes, there is no arrow of progress that has helped us understand how to create more successful advertising.

The Hidden Danger Of Precision Targeting

There is very little difference between your customer and your competitor’s customer.

And get ready for a shock. To them there is very little difference between you and your competitor.

Most consumers are oblivious to the positioning subtleties among major brands. The average consumer has no idea why Coke is different from Pepsi, or Crest is different from Colgate. They see no difference between Jif and Skippy. They are unimpressed and uninformed about the arcane positioning distinctions between Bounty and Brawny paper towels.

Most of their purchasing habits are just that -- habits. Interpreting their behavior as some sort of ideological commitment to your brand is a delusion.

In fact, most of the positioning and differentiation work done by advertisers and marketers are academic exercises that are lost on consumers. Consumers have more important things on their mind.

This is why trying to draw precise targeting differences and grand strategic insights between your buyers and your competitor's buyers is such a fruitless endeavor. Being too precise in your targeting means you are missing one of your biggest prospects – your competitor’s customer.

Heavy users in your category are promiscuous. They may have a favorite brand, but they are generally not fiercely brand loyal.

Advertising vehicles that allow you to “engage” and have “conversations” with your brand's heavy users by promising precision targeting provide very limited opportunity to grow your business. In fact, they often distract you from your proper objective – attracting new customers.

This is why social media have proven to be highly suspect in building sales. Who follows you on Facebook and Twitter? They are mainly your committed customers. They are not your primary source of growth. Should you ignore them? Of course not. But neither should you be obsessed with them, as is common practice in the world of social media.

One of the great benefits of mass media is that it lacks precision targeting. It reaches all the users in your category, including the users of your competitor's brand.

These people – the ones who are not your loyal fans – are the ones who can grow your business.

Display: A House Of Cards

Despite its dismal track record, spending on display advertising keeps growing at an astonishing rate. Forrester Research is projecting a 17% compound annual growth over the next 5 years.

As far as I'm concerned, it's a house of cards. And if the house goes down, it will take a lot of advertising-supported online businesses with it.

Here are some reasons I believe display is a house of cards:

• Interactivity has proven to be a joke. Nobody interacts with display advertising. Click through rates are abysmal and keep dropping.

• The promise of precision targeting has also proven to be a farce. Facebook, the poster child for precision targeting, has click rate results so low that they refuse to publish them. If "precision targeting" can't deliver better results, what the hell is the point?

• Ironically, despite its promise of pinpoint targeting, display is looking more and more like it's attracting the scattershot advertiser -- the tonnage direct marketer.

• Even if pinpoint targeting was real, what difference does it make if nobody notices the ads? In most cases, the physical properties of display ads render them essentially invisible. Have you ever heard anyone discuss that awesome display ad they saw?

• The amount of known click fraud is alarming. The amount of unknown click fraud is...unknown.

• The amount of known website visitor fraud is also alarming. The amount of unknown website visitor fraud is...you get the picture.

• After 15 years, can you name a single significant consumer brand that has been built by display advertising? I didn't think so.

There are plenty of smart people in the advertising industry who know display has been a mess, but are keeping their mouths shut because there is too much at stake. Remember, prudent, intelligent people in the ad industry who were skeptical of the magical powers of "interactive" advertising were excoriated for years for being Luddite dinosaurs (who moi?)

There are a few things that could destabilize display's house of cards.

• A high profile fraud scandal

• Widespread recognition of Facebook's display ad dysfunction

• Mobile not living up to expectations

• A major agency or research company throwing open the emperor's closet

I'm not predicting that display's house of cards is going to collapse. It is too well entrenched for that. But if it started to follow the downward track of print advertising, I wouldn't be shocked.

Be sure to see my piece today at Digiday on banner advertising.

Old Spice Numbers Smell Fishy

I've been on vacation for a while, but I've noticed a lot of web fuss about the Old Spice Red Zone After Hours Body Wash campaign. The one with that guy who looks just like me.

In case you've been even further from civilization than I have, the campaign has been an advertising and media sensation, winning major awards and poking its head into every corner of the social web.

Well, according an article from Yahoo! entitled "Despite Enormous Popularity, Old Spice Guy Not Helping Sales" the campaign is, um, not helping sales.

The article links to a BNET post that quotes Brandweek magazine:

"... sales of the featured product—Red Zone After Hours Body Wash—aren’t necessarily tracking with that consumer appeal: In the 52 weeks ended June 13, sales of the brand have dropped 7 percent according to SymphonyIRI..."

I am officially skeptical.

I think this campaign is a winner and I will be very surprised if it does not result in excellent results for Old Spice.

Some thoughts:

• I don't trust the IRI numbers. Something smells fishy to me.

• While the campaign is technically for Red Zone After Hours Body Wash, I believe that for most observers it is for Old Spice, the brand.  Consequently, I will expect to see increases in sales for Old Spice even if the IRI numbers are accurate for Red Zone.

• If the campaign does fail (which will surprise me) I believe it will be because of targeting. As regular readers know, I am a fiend about targeting the heavy user in a category. I don't know who buys a lot of this stuff so what I'm about to say is speculation. This campaign seems to me to be targeting at horny housewives and gay guys. If women buy a lot of this stuff for their men, then the targeting is correct. However, if men buy this stuff for themselves, there is a targeting issue. 

• Nonetheless, I expect it to be successful because great creative is usually the best strategy of all.

Thanks to Mark Manion for the lead on this.

Facebook's About Face

Here at the Ketel One Conference Center of The Ad Contrarian Global Headquarters, we've been talking lately about the remarkable success that Facebook has achieved.

Not only have we been talking about it, but we've been high-fiving ourselves and taking full credit for it.

Perhaps you remember Facebook in its initial incarnation. It was the social media upstart that was going to slay the traditional advertising dragon. Well, it seems that it has done just the opposite. It has become a juggernaut of traditional paid advertising.

Some of the baloney that Facebook first tried to sell us was:

• Consumers wanted to "join the conversation" about brands on line.

• Precision targeting and social media marketing were going to make mass marketing obsolete.

• Traditional paid advertising was a thing of the past.

But according to The New York Times...

"Facebook has changed its pitch and the products it offers advertisers so often that many marketing executives are wary."

Now Facebook is making money hand over fist, its stock value has soared, and they've done it by completely abandoning their initial principles and implementing the semi-brilliant marketing advice of a certain Luddite dinosaur blogger.

A couple of years ago a piece appeared in this space entitled Either Facebook Is Nuts Or I Am. The piece made a few points:

First, was that Facebook's "precision targeting" strategy was dumb.

"Why would a company that can reach a billion people...want to sell targeting? They should be selling anti-targeting. They should be selling reach. They are the only media property in the solar system that reaches a billion people (yet) they are trading on their ability to reach falafel lovers in Yonkers.

They're sitting on a gold mine, but they're throwing away the gold and selling the dirt."

Second was that they had to abandon the social media marketing fantasy and realize they were in the advertising sales business...

"...the Z-man has to get used to the idea that he's in the ad business... he has to get rid of all the Global Chief  Engagement Content Relationship Jargonators.

He has to get some ad sales people who know what the f/k they're selling, and then give them something worthwhile to sell. "

Third, they needed to forget about the little postage stamp ads they were peddling and develop some ad units that had impact.

"They need to offer big-time advertisers something of real value, not the crap they are currently selling."

Two recent reports, a very positive one in The New York Times and a very negative one in The Wall Street Journal, indicate that Facebook management have become assiduous readers of this blog.

First, they are soft-pedaling the precision targeting and emphasizing the mass reach. Reporting on a meeting that Facebook's sales staff had with a big client, The Times reporter says......

"At the meeting (Facebook's) ad strategists were saying they wanted (the client) to spend money to show ads to every American woman 45 and older on Facebook — as many as 32 million people."

Next, they have pretty much abandoned the social media bullshit...

"A few years ago, the company was telling brands to increase the number of people following their pages. Now it says fans are largely irrelevant." 

And finally, they have gotten rid of the no-impact crappy little side bar ads and replaced them with big fat ads right in the middle of your feed, and as The Journal said..." a changed format for Facebook's right-hand column ads. They're now larger..."

Unfortunately, old habits die hard. Even though Facebook is no longer kidding themselves about what business they're in, the nitwits in agencies and marketing departments still don't get it. According to a piece in Media Post, Facebook just signed a $100,000,000 advertising deal with marketing giant RB. Here's what a clueless RB jargonmeister had to say:

"This is not about advertising, but rather about collaboration to drive growth for RB brands and engagement on Facebook,"

Oh, good. For a minute there I thought this might be about advertising.


Thanks to Jim Dittmann and Prof. Byron Sharp for links regarding today's post.

Does Targeting Work?

In 2004, a guy named Jim Nail, Principle Analyst for Forrester Research, had this to say to The New York Times...

“You’re seeing the end of the era of mass marketing."

In the intervening eight years, it has become an article of faith among the marketing and advertising lemmingocracy that mass marketing as we know it is moribund.

According to this hypothesis, the holy grail of advertising is now targeting. Technology has provided marketers with the ability to deliver  advertising messages targeted to individual consumer profiles and needs. This is typified by web advertising served to us based on a stunning amount of personal information which is collected about us. Soon, the theory goes, cable TV will also be able to find us down to the level of the node that carries our signal and likewise deliver personalized advertising messages. This, according to Mr. Nail and his cohort, has reduced mass marketing to irrelevancy.

The facts, however, tell a very different story.

It is certainly true that we know a lot more about people as individuals then ever before. In fact, we know a frightening amount. It is also true that we have the ability to serve ads based on what we know about individual behaviors, attitudes, demographics, and finances. Yes, we have the technology.

There's only one problem. It ain't working.

As we have developed the ability to target people more and more precisely, click-through rates of these hyper-targeted ads have dropped like a pearl onion in a dry martini. According to Google, click-through rates, on average, have fallen below one in a thousand. And the poster child of personal information gathering and targeting, Facebook, has click-through rates about 5 in ten thousand.

These rates are remarkably -- one is tempted to say -- astoundingly low.

In fact, since the infancy of the web, in the mid-to-late 90's -- when the web had far less detailed personal data on us -- click-through rates have declined by over 95%. Not a fabulous record of success.

There seems to be little convincing data that the new age of hyper-targeted advertising is having the miraculous effect promised to us. In fact, there is plenty of evidence to the contrary.

Maybe advertising success isn't as much about targeting as our newly-anointed media geniuses would have us believe.  Maybe it's about having something interesting to say and somewhere intrusive to say it.

Maybe it doesn't matter how good our aim is if all we are shooting is marshmallows with slingshots.

P&G Gets It Half Right

Procter & Gamble, the world's largest advertising spender, made big waves last week when they announced that they were taking a shit-load of money out of "precision targeted" Facebook advertising. Their cmo said...

'We targeted too much, and we went too narrow'

P&G is discovering too late what a growing number of big-time advertisers have found out -- the headlong rush into "precision targeted" display advertising has been a mess.

The age-old strategy of data-based direct marketers (which is essentially what "precision targeted" online advertising is) is proving to be a failure for brand marketers.

By 2013, P&G had moved over 1/3 of its ad dollars online.

In 2014, P&G cut ad spending by 14%.  Why were they cutting ad spending? The usual delusional horseshit about online advertising:

“...effectiveness and the consumer impact of our advertising spending will be well ahead of the prior year,...an optimized media mix with more digital, mobile, search and social presence..." said their cfo.

And what has been the result of all this optimized media brilliance? In the past 12 months, P&G's sales results have been a disaster, with an alarming sales drop of 8%. And when you're P&G, 8% equals 6 billion dollars.

As regular readers know, I have been warning advertisers about the bullshit they have been sold about "precision targeting" for years.

But let's be careful before we blame targeting for all the problems of display advertising.

It goes deeper than that. It's not just the targeting that's the problem for big marketers. It's the nature of the beast.

Online display advertising has evolved into electronic junk mail. If you're a direct marketer, or if you're running a short-term promotion, maybe display can be effective. But if you're a brand marketer, it's a sinkhole. Ask P&G.

P&G is not moving money out of Facebook, it is just re-arranging its Facebook investment to buy reach instead of "precision targeting."

But buying more reach is not the same as getting more impact. And from the corner office here at The Ad Contrarian Worldwide Headquarters, it still looks to us like display advertising, in any quantity and on any platform, has very little impact.

As we reported here a few weeks ago, a recent study shows that the amount of attention consumers pay to display ads is shockingly low.

There is a little voice inside me whispering that P&G is actually covering for Facebook by converting their "targeted" dollars to "reach." Something is telling me that perhaps P&G is locked in to an advertising contract with Facebook and is just doing what it can to waste less money.

It may take a few years to find out what's really going on here. Stay tuned.

And one more thing...

There's something that's bothering the shit out of me about the P&G story.

There has been a lot of bad news about ineffectiveness and fraud in online advertising in the past year. Why does it always come from research companies, news media, or clients. Why does it never come from agencies?

How can it be that the people who are supposed to be the experts never know?

Can it be that agencies really do not know what the fuck is going on in their own business and have to be told by researchers, news media, and clients? Or are they playing a double game?

The Data Delusion

Systems in extremis often delude themselves into believing they are something they are not.

Our educational system has convinced itself that it's not really in the education business. It's in the "self-discovery" business or the business of "celebrating diversity" or other such nonsense. The result is that it is very successful at not educating our kids.

Pepsi decided a few years ago that it was no longer in the business of selling soda. It was in the social responsibility business. The result was years of disastrous sales.

The advertising business is currently going through such a cycle. We are no longer about making advertising. In fact, making ads is looked down upon as a quaint, out-of-date notion.

Unfortunately, we can't quite decide what business we are in.

For a few years we were in the "branding" business. The "branding" business posited that consumers had deep connections to brands, and that sales results were in direct proportion to brand "meanings." The result was the marketing equivalent of empty suits -- mundane products with silly, high-minded philosophies and vacuous advertising.

Then we were in the "conversation" business. This meant that instead of making ads, our primary purpose was to generate "conversations" between buyers and sellers. The rationale behind this fantasy took the aforementioned belief that consumers care deeply about brands to a new level. Now they wanted to interact and have relationships with us.

Our newest delusion is that we're in the data business. "Big data" is the big thing. The theory behind this latest dead end is the hypothesis that the key to marketing success is precision targeting. In fact, precision targeting has thus far proven to be a dispiriting bust. The poster child for precision targeting is Facebook, which has more data and knows more about us than we know about ourselves.

And yet advertising on Facebook has been uniquely ineffective. An astounding experiment done several months ago showed that ads with no content and no targeting performed 60% better than "precision targeted" Facebook ads. Major brands have stayed away in droves.

So what is all this confusion and misdirection in the advertising business about?

The answer is quite simple. About 15 years ago our industry decided that traditional advertising had run its course. We had run out of steam and were searching for new ideas. The web was the perfect solution. It was a brand new medium in which anything was possible.

It represented everything we were searching for -- new technologies, new creative possibilities, and a youthful new "branding" opportunity for the tired old ad business.

There's only one little problem: it ain't workin' very well.

No one pays any attention to the ads. No one wants to have conversations with us or read our self-serving content. But we are ideologically committed to the web. It is still our precious baby -- regardless of the discouraging facts.

Our latest web pipe dream is data. But data is a solution looking for a problem. The fact is, we now have more data about consumers than we ever dreamed possible. We know where everyone is every minute of the day. We have no trouble reaching people efficiently. Our problem is not lack of information. If anything, we are overloaded with information.

Our problem is finding something interesting to say to people that will get their attention.

As John Hegarty, founder of Bartle Bogle Hegarty, said recently,

"I've spent my life dealing with people who've got all the data in the world and yet they can't invent anything."

We will continue to imagine new varieties of web magic until such time as our clients'  need for results catches up to our industry's ideological commitment to chasing rainbows. Big data is just the latest rainbow.

As usual, the ad industry is focused on everything but the problem.

What If Targeting Doesn't Work?

As regular readers know, I have a basement full of oddball ideas about advertising. One of them is that "media science" may be a lot of hooey.

What if all the "precision targeting" we do is mostly unnecessary complexity masquerading as knowledge?

What if there's only one important cut we need to make when planning media -- does the person participate in our category or not?

If we're selling golf balls, the only important targeting question we have to ask is, "Does this person play golf?" If we're selling wine the only important question to ask is, "Does she drink wine?" If we sell tires the only important question is, "Do they own a car?"

All the other stuff -- their education, their income, their weight, height, and serial number, their zip code and psychosexual predelictions, the websites they visited yesterday, and the number of chickens in their backyard -- may be interesting, but what if they don't do a damn thing to make our media buys more effective?

During my semi-brilliant advertising career I would never have suggested such a thing to a client. Clients don't like oddball ideas. They are resolutely devoted to believing what everybody else believes. And everyone else believes that leveraging data to create precision targeting is the future of advertising.

I guess it would be simple enough to either prove or disprove this theory.

I'd love to see an advertiser do a split run. In one market buy media based on the usual  demographics, psychographics, data-o-graphics, programmat-o-graphics, graph-o-graphics, and bullshit-o-graphics.

In another matched market run the same campaign but make the media buy based on one behavioral criterion -- does the person participate in our category or not?

I'd love to see the results.

The Power Of Sloppy

Have you ever wondered how McDonald's and Coca-Cola and Nike and Toyota and Apple and all the other enormous worldwide brands became successful?

For one thing, they were sloppy. They had to be.

They didn't have big data or precision targeting. They couldn't punch a key and immediately identify left-handed Lutheran dry cleaners who rode recumbent bicycles.

So they had to use mass media and talk to everyone. Not only did they not suffer for it, they prospered from it.

Mass market advertising is the most powerful media tool ever invented for the building of brands. In fact, despite the blather of contemporary marketing pundits, it remains so today.

If you walk through your local supermarket, you'll find that these mass advertised brands are the brands you'll find on the shelves. No "Facebook" brands. No "Twitter" brands. No "banner" brands.

Is there a lesson here? There is an enormous lesson staring us right in the face.

It is this: precision targeting may be an effective strategy for direct marketers and niche brands, but if you want to build or grow a big brand, mass advertising is by far your best media strategy.

Of course, some degree of targeting is essential. You don't want to try to sell golf balls to tennis players or run beer spots on "Oprah."

But there is a point you reach very quickly at which slicing and dicing the population into finer and finer fractions becomes counter-productive. Your assumptions become less accurate, your reach becomes less fruitful, and your focus becomes too parochial.

When you target too explicitly, you lose the value of unintended consequences. You lose the power of the unknown. Who would have guessed that 88% of "youth cars" would be sold to people over 35?

The simple fact is that marketers are not as good at predicting the ultimate make-up of their customer mix as they think they are. And the best way to mitigate against this is to be a little sloppy and tell your story to as many people as you can.

If you want to be a niche brand, do niche advertising. If you want to grow a big brand, you need to do mass market advertising.

You need to harness the power of sloppy.

Invisible Advertising

As media options for advertisers have become radically more complex, our ideas about the value of various media types have become concomitantly more esoteric.

We analyze media efficiencies based on very advanced ideas of consumer behavior. We try to understand how and why consumers use certain types of media and we optimize our media efficiencies by following those behaviors. We use highly muscular targeting models to find exactly the right audience and exactly the right environment for our messages.

And yet, as our ability to target has gotten dramatically more precise  -- particularly for online  advertising -- our results have gotten progressively more dismal. So what the hell is going on?

The answer is that we have grossly exaggerated the usefulness of media science. We have also overlooked something far simpler and more consequential. There is one characteristic of advertising that we never seem to discuss, that never enters into the evaluation process, and that, in the end, may trump all the arcane media analyses and targeting models.

In addition to having strategic and executional properties, advertising also has physical properties. These physical properties may, in the end, have a greater effect on success than media science. The simple physical nature of an ad may be far more relevant in predicting its power than any of the mysterious media calculations.

The fact that an ad occupies a whole page, or a whole screen, may be a lot more germane to its effectiveness than how well it is targeted. A big old billboard that targets no one in particular may be, dollar-for-dollar, a more efficient media buy than a display ad that precisely targets left-handed Mennonite yogurt eaters, but is so physically insignificant as to be unobservable.

To state it another way, it doesn't really matter how well-targeted a Facebook ad is if its physical properties make it invisible. The fact that it is a tiny little thing sitting in an area of a page we have all learned to ignore is critical to understanding why Facebook ads are so alarmingly ineffective. The fact that it may be targeted with absolute precision is meaningless if it is essentially invisible.

Which leads me to a piece written recently by Seth Godin. The piece is called "Advertising's bumpy transition (and why it matters to you)." It is basically an apologia for online advertising.

Seth is a very bright guy and he makes some interesting points about media choices. He is particularly astute in his criticism of print advertising. But there is also a lot to argue with.

If I understand Seth's main thesis correctly (and frankly, I'm not sure I do) I think he is saying that advertisers undervalue digital advertising because they don't understand the power that is represented by "focus." By "focus" I think he means a digital environment that is specific and uncluttered and conducive to the particular interests of a distinct type of consumer.

He is correct that placing display ads in focused environments is probably a lot more judicious than throwing them willy-nilly all over the web. But they are still famously ineffective.

Seth believes that once advertisers understand "focus" they will have a deeper appreciation for the power of online display advertising. I don't think so. I think advertisers already have seen that while "focus" may be preferable to absence of focus, it has not led to terribly effective advertising.

The problem is not one of targeting or focus. The problem is that the physical properties of display ads render them essentially invisible. Until this problem is somehow addressed, display ads will continue to under-perform and their value will continue to deteriorate regardless of how brilliantly they are placed.

Categorizing ad types as "old media" versus "new media," or "traditional media" versus "digital media," or "online media" versus "offline media" is not an intelligent way to think about advertising. In fact, because of its physical properties an online display ad has much more in common with a small space newspaper ad than it does with a YouTube video or a website.

Media science notwithstanding, there are only two types of advertising in the world: visible advertising and invisible advertising. The farther away from understanding this you get, the more confused you become.

Is The Great Twitter Scare Waning?

Can it be that The Great Twitter Scare Of '09 is starting to wane? Comscore reports that Twitter usage in the U.S. dropped about 8% in October. That's a lot to drop in one month.

In fact, Twitter usage has dropped in two of the last three months. The only month of the last three in which it grew was September, in which it grew less than 1%. 

Digital Agency Guy Makes Sense

As you all know, I like to take swings at bullshit. Lately, social media bullshit has been my favorite target.

However, as I often say (but am never remembered for) it is not social media per se that makes me gag (after all, I am a blogger,) it's the nonsense promulgated by social media zealots, hustlers and bullshit artists that gets me going.

This weekend I read an intelligent piece called The Content Delusion by a digital agency guy, Eric Karjaluoto. Not only did he make sense, he did it without using the words "conversation" or "engagement" even once. And that, my friends, is a record.

On The Other Hand

Last week, after I  posted  Distinctions That Need To Be Drawn a few commenters pointed me in the direction of this thing from Razorfish.

I got through two paragraphs of this cliche-fest and had to quit before my brains fell out.

On the other, other hand, nice little illustration on the page by my former colleague David Fullarton.

Friday In Seattle

Last Friday I had the pleasure of speaking to the radio industry group up in Seattle (the PSRBA.)

The topic of my talk was "The Three Most Annoying Trends in Advertising." And, as I said to them, it was hard to pick just three.

I believe they taped the event and I hope to get a look at it soon. If it's not too embarrassing, I'll post it here.

The Geniuses Who Run Our World

The City of Oakland (where I live) has a very high dropout rate among high schoolers (over 30%) which it would like to lower. Like all political entities, the city will do everything possible except address the actual problem -- bad parenting.

Of course, the first thing they did was to have a conference. A conference is a great thing to have because it gives you the feeling that you're doing something while you're actually doing nothing. It's activity without progress.

At the conference, the following suggestion on lowering dropout rates was seriously discussed -- eliminate the grade of "D."

Apparently, in the educational bureaucracy these days, whether kids actually learn something is of secondary importance. 

The Geniuses Who Buy Online Media

Interactive maniacs are always going on and on about how efficient online advertising is because of geo-targeting and behavioral targeting and who-know-what-kind-of-bullshit-targeting.

So yesterday I went to my company's Facebook page. There I found an ad for Nissan.  First of all, no one has been to our Facebook page in about a year, including me. The only reason I got there was because I clicked the wrong link. Second, our biggest client is Toyota, which it says right on our page.

So some knucklehead at Nissan is paying good money to advertise on a site nobody goes to in a social media environment that is completely hostile to his brand.

That's some smart marketing, baby.

Bully Awards Update

So far, we've had great response to the Bully Awards for Achievement in Advertising and Marketing Bullshit. If you'd like to nominate something, just click on this link. As soon as I get some time, I'm going to start posting the nominees and give you a chance to vote. Some should be posted by Monday. Nominees accepted until December 1st.

Beating Their Heads Against The Wall

For several years now, we at Ad Contrarian Global Headquarters have been ranting about the astonishing stupidity of marketers for relentlessly chasing young people and ignoring people over 50.

Just to recap the case:

• People over 50 control over 75% of the financial assets of the US.
• Baby boomers dominate 94% of all consumer packaged goods categories.
• They purchase almost 40% of consumer packaged goods
• They account for 1/3 of all TV viewers, online users, social media users and Twitter users
• Even in technology categories, where marketers assume young people dominate, baby boomers  "are purchasing at rates just as high as other segments, and because they are often buying for their kids, many are double-dipping." 

The astounding part: according to Nielsen, less than 5% of advertising is aimed at people over 50.

Apparently NBC is going to make a big presentation tomorrow to marketers and agencies about how stupid they are for ignoring people over 50. All I can say to NBC is, good luck.

For the past 10 years the lemmings in the marketing world have been trapped between the legends and rituals of the past, and the brave new world of the future. They are too busy jumping from one "thing that will change everything" to another to pay attention to the people who actually spend the world's money. They are too busy developing mobile apps for penniless 20-year olds to focus on the people who control this country economically.

According to NBC...

• The 55-64 age group "..is the fastest-growing demo group in the country and now numbers 35 million people that account for close to $2 trillion in annual spending.”

• Nielsen's demo groups...“were invented 50 years ago and are outdated.”

• People 55-64 have..."a median household income of  $69,000, dwarfing that of those under 25 ($27,000) and 25-34 ($58,000)..."

Nielsen doesn't even report the TV viewership of people over 55.

NBC ceo Jeff Zucker said, "What we’d like to see is these companies and their agencies start targeting (the 55-64 group) as much as they do the 18-34 demo...”

Yeah. In your dreams.

Anyone who has spent one week in an ad agency knows that facts no longer matter, and the minute you start talking to clients about targeting people over 50 is the minute they start labeling you a "dinosaur."

I recently was at a meeting with a financial institution at which I tried to explain to them how ridiculous their strategy of targeting young people was. They looked at me like I had 3 heads.

The marketing industry is locked into a way-out-of-date time warp in which young people are the holy grail.

If anything, it's getting worse.

Battle Of The Century

Get ready for what could be the PR, lobbying, and regulatory battle of the century as the Goobook (Google and Facebook) duopoly start to realize what the new regulations of the EU (European Union) may mean to their businesses.

In May, a new regulation, called the GDPR (General Data Protection Regulation) will go into effect. More importantly, something called the ePrivacy Regulation may also go into effect. These regulations will seriously limit the collection of personal information by online entities. In fact, they may cripple substantial parts of their businesses.

Right now, Goobook are essentially in the surveillance business - a business that yields tens of billions of dollars in revenue annually. By tracking us across the web, collecting information about us, and monetizing that information by selling it as targeting data to advertisers, Goobook have essentially taken over the online advertising industry, reaping 77% of online ad revenue in the US.

But things are going to change. Many commentators have suggested that the new EU rules will not materially effect Google and Facebook. Not so says an opinion from a law firm hired by Digital Content Next (DCN) to analyze the likely effect of the ePrivacy Regulation on the duopoly (the doo-wops?)

I have had a look at the opinion and it is startling.

Below are quotes from the legal opinion as well as quotes from the SVP for Government Affairs at DCN.

"... much of the... data on which Facebook and Google currently sit could lose its value because it could not be used for online behavioral or targeted advertising purposes..."

"...Google and Facebook’s ability to collect and use consumer data will be dramatically curbed. They would be restricted from targeting advertising based on data from electronic communications services such as WhatsApp, Gmail and Messenger unless they receive consent from all parties involved in the communication. As currently drafted, Facebook would likely be prohibited from using data transmitted from the clicking of a “like” button for the purpose of targeting advertisements."

"...Google and Facebook would be required to get separate consent from consumers before attempting to collect and use browsing history or “personal” data...What’s more – companies would not be allowed to bundle consent for multiple purposes nor require consent as a condition for using a service."

"...companies that collect and use data at smaller scale (such as solely on their owned and operated domains) are likely to be less impacted by this Regulation. These companies will be significantly less challenged in getting the required consent for their limited purposes. As a result, companies that create trusted, premium digital experiences, enjoy direct relationships with consumers and do not rely on tracking consumers at such a large scale may find new leverage and opportunities in the marketplace." 

"...the ePrivacy Regulation could conceivably prohibit any data transmissions by Facebook or Google between connected IoT (Internet of Things - BH) devices."

"...no matter what happens, it is highly likely Facebook and Google will need to make major changes to their online behavioral and targeted advertising practices in order to comply with forthcoming EU privacy laws and regulations."

One thing to keep in mind is that the ePrivacy Regulation is currently in draft form, the final language has not been approved, and the regulation has not yet been adopted.

As I said in BadMen, 

"The key thing to remember is that most of the major players in online advertising have a big stake in surveillance marketing. They will fight like hell to protect tracking."

I expect that in the next six months we will see a battle royal. Google and Facebook will use every trick in the book to try to influence European regulators to take the teeth out of the ePrivacy Regulation. Get ready for an avalanche of horseshit about it being anti-democratic, anti-American, anti-free speech (it's already started) and every other spurious argument they and their advertising industry apologists can pull out of their asses.

When confronted with the unprecedented power and influence of Goobook, we will discover if the European regulators really have balls or if they're just grandstanding.

Meanwhile advertisers, who are already in shock over the fraud, corruption, waste, and non-transparency in online advertising, and have flocked to Google and Facebook as presumed "safe havens," are going to get another shotgun blast to face. They've been living in a fantasyland and it will soon start crumbling.

This is gonna be the best show in town.