January 31, 2014

Reheating The Leftovers

We're Number 1! Number 2
When Richard Nixon resigned, Gerald Ford chose Nelson Rockefeller to be his vice president. Asked how he felt about the vice presidency, Rockefeller said, "I never wanted to be vice president of anything."

This is kinda how I feel today. My semi-brilliant book, 101 Contrarian Ideas About Advertising, has been top-of-the-ad-charts at Amazon for about 9 months. Now it's #2. This has caused deep psychological damage and quite a few beheadings around Ad Contrarian world headquarters. How can you help, you ask? Buy the damn thing.

Blaming The Victims
A few days ago I wrote that millennials were "nasty little bed-wetters with no money." And some other disagreeable things. The point was that marketers' obsession with millennials is way out of proportion.

While I believe marketers' mania for millennials is misguided, the post in question was written as comedy as much as commentary. Having a 23-year old daughter of my own, I am very conscious of the economic problems these young people are facing.

Nonetheless, my experience is that a lot of 'em need a kick in the ass.

Why I'll Never Be Rich
Facebook's stock price just keeps going up. Another reason to never listen to the financial advice of an ad blogger.

Age And Technology
Two of every three hybrid cars sold last year were sold to people over fifty. 72% of Hyundai Sonata hybrids were sold to people over 50; 69% for Honda Civic; 66% for Toyota Prius; 68% for Ford Fusion.

The Swindle Goes On
We did several posts last year about the enormous amount of money that's been stolen from advertisers by online ad fraud. Apparently it's getting worse. According to a piece on MediaPost, a study by Solve Media concludes that advertisers are expecting to lose $11.6 billion this year to crooked online ad practices. That's up 22% from last year.

January 29, 2014

Brand Loyalty And Social Media

Of all the factors relating to consumer behavior, perhaps none is more misinterpreted and mischaracterized than brand loyalty.

While we all have favorite brands in several categories, in most cases our loyalty is an inch deep.

In the agency world, where the religion of branding is unquestioned and inviolable, the misunderstanding of "brand loyalty" is epidemic.

It is true that, all things being equal, people will default to their favorite brand. But every intelligent marketer knows that her competitors are up late every night working to make sure that all things are never equal.

While Coke may be the preferred brand for a soda drinker, any Coke distributor will tell you that if Walmart suddenly puts up a huge Pepsi display and lowers the price, Coke is going to take it in the shorts.

I may prefer American Airlines to United, but if United has a flight to LA that’s $100 cheaper, you know where I’ll be.

Every McDonald's owner knows that if Wendy's suddenly decides to give away free fries with every burger, McDonald's is going to be hurt bad.

What we call "brand loyalty" is actually a far more accurate reflection of habit than loyalty. Most consumers in most categories are cheerfully willing to switch brands if there's something in it for them.

One other misunderstood aspect of brand loyalty concerns heavy users. Heavy users in a category are often presumed to be the most loyal. Often, they are not (please do yourself a favor and read “How Brands Grow” by Prof. Byron Sharp.) Heavy travelers tend to use a wider variety of airlines. People who eat out a lot tend to visit more restaurants. People who drink a lot of wine, drink many brands of wine. Heavy usage in a category is not a reliable indicator of brand loyalty.

This fact is lost on most marketers who tend to think that their brand's heaviest users are their most loyal customers. In fact, someone who visits McDonald’s 4 times a week will be considered a very loyal customer by McDonald’s. But this is not necessarily so. As a heavy category user, this person may be eating 10 fast food meals a week, only 4 of which are at McDonald’s.  He may actually use McDonald’s competitors more often than McDonald’s.

In the tortured logic of social media, subtleties like these are a complete mystery.

Which brings us to one of the dumbest social media campaigns I have ever read about. And believe me, that's a very high bar.

Apparently an agency in Norway decided that Facebook "engagement" is more import than actual customers. And so they embarked on an astoundingly misguided promotion to trade "likes" for customers. And lost.

The agency somehow convinced Burger King to give free coupons for a Big Mac to anyone who followed Burger King on Facebook on the condition that if they took the coupon they couldn’t access a new Facebook page Burger King was launching. In other words, you had to turn down the offer of a free Big Mac to access the new BK page.

According to Ad Age, 38,000 people took part in this campaign. Of the people who did, only 8,000 chose to stick with BK. 30,000 opted for the free Big Mac coupon. In a very nasty little trick, Burger King only had 1,000 Big Mac coupons to give out.

The agency is trumpeting the fact that 8,000 people would not accept the coupon and chose to follow Burger King’s new Facebook page. Big fucking deal.

So BK now has 8,000 "more engaged" customers (whatever the hell that means) and 29,000 formerly happy customers who are pissed-off because they wanted a Big Mac and BK cheaped-out on them.

Perhaps worst of all, this dumb-ass idea demonstrated to the world how little true loyalty BK's followers had -- 79% of their Facebook followers opted for the Big Mac.

The ridiculous religion of social media -- and the naive delusion of brand loyalty -- have reached such a point of absurdism that this is being hailed as another great social media achievement.

I’m sure the visionaries behind this nonsense will be speaking and doing victory laps at the next worldwide clown conclave social media conference.

January 28, 2014

Everything You Need To Know About Millennials

Okay, I'm serious.

Everyone in the advertising and marketing industry listen to me. If I have to sit through one more presentation or read one more study about millennials I'm gonna send a guy out to kill each and every one of you. I mean this.

Every single bullshit marketing study about millennials ever conducted comes to the exact same conclusion, but is afraid to say it out loud: 

They are nasty little bed-wetters with no money.

Okay? Got it?

Someday their parents will die and they'll inherent some money and they'll be worth talking to. Until then, they'll be living eight-to-an-apartment, drinking Kale smoothies, uploading billions of narcissistic selfies, and pissing away their money on pink fucking headphones.

Before you waste your time and money trying to sell something useful to these jerk-offs, I suggest you call Mr. Obama and ask him how his health care plan is going.

Millennials are like humanity's QR code -- they're everywhere and they're useless.

The only important thing you have to know about them is that there's a double "l" and a double "n."

Got it?

I know your idiot boss is probably all over you about "what's our millennial strategy?" And you are probably stuck twice a week in Powerpoint hell listening to consultants or researchers or, god help us, planners running their gas pipes about these people.

But if I find you publishing studies or having conferences or, god help us, holding webinars, I'm sending a guy with a baseball bat.

Final warning.

January 27, 2014

The Technology Trap

I have developed a rather distressing reputation as a dinosaur who hates technology. I may be a dinosaur, but I don't hate technology.

As a former science teacher I love science and technology and am a sucker for all kinds of tech gizmos that I probably don't need.

I have another distressing reputation as an apologist for the broadcast industry, particularly TV. Once again, I plead innocent. I don't own a TV station (I wish I did) and have no particular interest in the success or failure of the medium.

In fact, while Nielsen says the average American spends about 7 times as much time watching TV as he does online, I probably spend 7 times more time online than I do watching television.

So why do I have these bad reputations? I think it's because my annoying personality has given me an inflated regard for the difference between a fact and an opinion.

Most of what I read about the advantages that tech-based advertising (i.e., online advertising) has over traditional advertising seems to be opinions masquerading as facts. With the exception of search, I have read a lot of assertions, but very few facts that convince me that the web is an uncommonly powerful advertising medium. If anything, I have been convinced of the opposite.

Thus far it appears that most of the new technology-based advertising methodologies  have delivered substantially less than promised.

There is no doubt that the traditional advertising world has its fill of questionable practices and gross inefficiencies. However, having been ceo of an ad agency that did both online and digital advertising, it seems to me we spent a lot more time "massaging" our online numbers than we ever had to do with TV numbers.

But the technology delusion goes deeper than just media. Technology voodoo is becoming the new marketing voodoo.

I used warn my clients that marketing is not magic. It is not the answer to every problem. If your product is lousy, marketing can't fix that. If your location is lousy, marketing can't fix that. If your store is dirty, or your employees surly, or your business model screwed up, or your parking lot a mess, marketing can't fix that.

It seems to me that today the magical voodoo answer is no longer marketing, it has become technology. The truth is, unless you're in the tech business or you make machines or gadgets, consumers really don't care that much about technology.

Even when you get a technological advantage, it is usually very short-lived and soon turns into just another cost of doing business.

The construction guy who put the first flush toilet into the first home must have had a huge technological advantage -- for a couple of months. Then everyone started doing it.

Go back 20 years. Having a website was seen as a giant asset. Companies who announced the launch of a website actually saw their stock prices go higher. Today announcing the launch of a website is greeted with as much excitement as changing the plants in the lobby.

I don't know what bank introduced online banking. But they must have thought they found a gold mine. Today, every bank has to have online banking and it probably costs them each a fortune to maintain.

As new technology is adopted by everyone, what starts as a competitive advantage quickly winds up as just another cost of doing business.

I had a client with a very large advertising budget. About 95% of the budget was spent on traditional media (very effectively, I might add.) About 5% was spent on digital media. And yet I would say that when it came to discussing media, probably 70% of the time was spent on 5% of the budget.

Because of my speaking and consulting gigs, I have had the opportunity recently to attend many business conferences. It is remarkable to me how much time is spent on technology voodoo and how little time is spent on solving the real problems of real customers.

Most of the technology talk I hear is of the gee-whiz, jet-pack, moving-sidewalk variety that almost never comes to fruition. And if it does, it creates a giant QR-code yawn among consumers.

Technological improvements are nice. But they are not an instant fix for most business problems.

Technology seduces us into thinking we can solve our problems by spending money instead of changing behaviors. Which is about the most damaging trap a business can fall into.

January 22, 2014

Part 2: The Slow Painful Collapse Of The Social Media Marketing Fantasy

Today's post is the 2nd part of "The Slow Painful Collapse Of The Social Media Marketing Fantasy" which began here on Monday.

It seems like only yesterday we couldn’t turn on the TV, open a magazine, or go to a website without someone exhorting us to “join the conversation.”

“The conversation” was the physical manifestation of the marketing industry’s fascination with social media. The idea was that people were highly interested in our brands and would be eager to chat and share their enthusiasms on line with other people.

The philosophical seeds of this conviction were planted in the mid-1990’s when it was postulated that the “interruption model” of advertising had run its course. 

The theory went something like this: consumers were no longer responsive to advertising messages like TV spots, radio spots, and magazine ads which interrupted their activities. Instead, marketing was transitioning into a period in which the “permission model” would dominate.

The “permission model” posited that in order to be effective, marketers had to stop bothering people with advertising, and instead gain their permission to market to them.

The way you got permission was to engage consumers with useful, interesting messages (currently known as “content”) that gave consumers value instead of sales pitches. If you did this, they would trust you, like you better, and permit you to market directly to them. In marketing terminology, they would “opt in” to your marketing programs.

Best of all, they would share their passion for your brand with their network of friends and followers who would, likewise, share with their network. A multiplier effect would be born.

There was only one problem with this wonderful proposition. It misinterpreted consumer behavior by substantially overestimating consumers’ fervor for brands, and concomitantly misjudging consumers’ inclination to share their presumed fervor.

Believers in this ideology assumed that a person's use of a product was a demonstration of enthusiasm for the brand. Sadly, in the vast majority of cases, it is merely an indication of habit, convenience, or mild satisfaction. It is not proof of devotion or enthusiasm.
Regardless of the time, energy and money we spend “differentiating” our brands, most people see very little difference between our brand and our closest competitors. While there are some brands that people do have great loyalty to, and some categories that people are truly interested in, these are the rare exceptions. In most cases people will change brands with very little bother if it turns out to be convenient or otherwise beneficial.

Most people will gladly switch from Skippy to Jif if they can save a buck or two. If the ballpark doesn’t serve Coke, most people will happily return to their seats with a Pepsi. 

The idea that social media would become a channel in which consumers would share their strong enthusiasms by having “conversations about brands” has turned out to be largely a delusion.

Most brands are finding that their social media programs are more time-consuming, more expensive, and less capable of driving sales growth than was promised. Consequently, they are abandoning the “permission model” and reverting to the “interruption model” in their online advertising.

You can see this most clearly on Facebook. Facebook calls itself a social medium, but its advertising model is good old-fashioned paid advertising plastered all over the page. Compare the number of paid ads you see on your Facebook page with the number of "conversations about brands." 

YouTube calls itself a social medium but it sticks pre-roll (mostly recycled TV spots) everywhere it can. 

The reason is clear: marketers are finding that they can get more value out of these websites by treating them as avenues for advertising, not conversations.
And, just a reminder, Facebook, YouTube, Twitter, etc., don't make money from us having conversations about yogurt. They make money the old-fashioned way -- they sell ad space.

Social media are quickly evolving into just another channel for delivering traditional interruptive advertising.

It is also not surprising that the social media lobby has learned another lesson from traditional paid advertising. When you point out to them that they're not very good at generating sales, they default to the universal excuse for failed advertising -- it's not about sales, it's about branding. Whatever the hell that means. 

Social media is not going to die or go away. It will continue to grow. But the fantasy of consumers having conversations about brands and sharing their passion for brands -- and the claim that this will replace or surpass traditional paid advertising -- is simply collapsing as the evidence rolls in.

The “conversation” was a nice idea. It would be lovely if consumers were as eager to share their enthusiasm for our brands as we are. Sadly, they have other things on their minds.

It turns out that “the conversation” has been mostly a monologue.

January 20, 2014

The Slow Painful Collapse Of The Social Media Fantasy (Part 1)

It was going to change business forever. It was going to make traditional advertising irrelevant. It was going to revolutionize marketing.

It was social media marketing. And it's been the biggest disappointment since the NFL hired referees.

While advocates for social media still cling to the wreckage of "the conversation" and continue to hound us with apocryphal tales of social media magic, dispassionate observers are starting to realize what a delusion the whole theory of social media marketing has been.

The idea that consumers were enthusiastic about having conversations about brands online, and they would activate their network of friends and followers to share their enthusiasms and create a socially transmitted tsunami of sales has proven to be deeply fanciful.

It turns out that the average consumer has a lot more on her mind than conducting online conversations about fabric softener. And the ones that do seem to have no ability to generate enthusiasm in others.

While people with a financial or ideological stake in social media continue to propagate the fantasy, those annoying, troublesome things called facts keep popping up to undermine their careless assertions.

The first crack in the wall came in 2011 when the largest, boldest experiment in social media marketing ever attempted -- the Pepsi Refresh Project -- was exposed as a nasty failure that seems to have cost the brand 5% of its market share, which it has never recovered.

Then in September of 2012, Forrester Research reported that...
"Social tactics are not meaningful sales drivers. While the hype around social networks as a driver of influence in eCommerce continues to capture the attention of online executives, the truth is that social continues to struggle and registers as a barely negligible source of sales..."
A few months later, a story in The Wall Street Journal reported on a study IBM had done on the effect of social media on Black Friday sales. While sales were great, the social media contribution to sales were essentially nonexistent.

IBM reported...
Shoppers referred from Social Networks such as Facebook, Twitter, LinkedIn and YouTube generated .34 percent of all online sales on Black Friday, a decrease of more than 35 percent from 2011.
The Journal commented...
"...there’s one notable under-performer in the online shopping frenzy: social media."
But perhaps the most damning report on the negligible influence that social media marketing has on sales was issued a few days ago by McKinsey & Company.

This sentence from the report says it all:
“Email remains a more effective way to acquire customers than social media - nearly 40 times that of Facebook and Twitter combined."
We're talking about email here, not the Super Bowl. Email 40 times more effective than Facebook and Twitter combined? Now that's frightening.

The social media fantasy is in a death spiral. Social media marketing is no longer taken seriously as a sales builder by anyone with a functioning cortex.

Social media marketing will continue to be strangely popular and sporadically effective in some small niche categories.

But when it comes to serious brands, in the vast majority of cases it is evolving into just another cost of doing business.

Don't miss Part 2 of "The Slow Painful Collapse Of The Social Media Fantasy" in which we discuss how the delusion of "brand loyalty" lead to the fantasy of "the conversation."

January 15, 2014

Return On Ignorance

Let's pretend for a minute that we can measure ROI for advertising.

And let's pretend we've measured the ROI for our brand this year and it turned out to be 10%. In other words, for every $1.00 of advertising cost, we got additional sales of $1.10 and, therefore, a return on our investment of 10%.

So the question is, if that is true, why not spend every dollar we have on advertising? I'd be happy to give you every dollar I have if you'll give me $1.10 in return.

The answer is, we don't do it because we intuitively understand that this measurement is bullshit.

Here's why.

Let's say you're the brand manager for Bob-O-Cola. You did a Christmas promotion for Bob-O-Cola during the 4th quarter this year and during the promotional period you spent $10 million on advertising and you did $11 million more in sales. You report to your management that you had a 10% ROI on your advertising expenditure. They applaud and make you C-Something-O and give you a nice fat raise. Seems simple enough, right?

It ain't.

How about the cost of all the advertising you've done over the past 20 years that got you on the shelves in the first place? How about the cost of all the advertising you've done over the years to convince consumers that your brand was made from artisanally curated cola beans? How about the cost of all the advertising you've done to the trade to convince them your displays will earn them more money per square inch of floor space?

In other words, how about all the hundreds of millions in advertising dollars you've spent to get you to the starting line for this promotion that you are not including in your ROI? How do you account for that?

And conversely, how about all the sales you're going to get during the next quarter, when you will not be advertising, that are the residual effect of your Christmas promotion? How do you account for that?

Do you think McDonald's sells a billion burgers every minute because of the Christmas holiday ads you saw? Do you think Coca-Cola is on every shelf in the world because of the advertising it did last quarter? Do you think Nike rules the world because of the website they launched last month?

The total effect of advertising is cumulative, not discrete. These companies have spent billions of dollars on advertising and marketing over the years that have a multiplier effect on the advertising dollars they spend in the short term.

In fact, the billions they've spent over the decades -- that are not being counted in the ROI calculation -- may have far more effect on the outcome of their Christmas promotion than the short-term effect of the recent advertising.

Or it may have no effect at all.

That's what's wonderful and interesting about advertising -- nobody can figure out a fucking thing.

ROI? Just another dubious entry in the encyclopedia of advertising ignorance.

January 13, 2014

Stealing For Success

Back in my agency days I was a pretty good copywriter. Not great and not terrible, but pretty good.

I like to think that if I had focused more on creative work and less on agency management I could have been better. Of course, this is the kind of bullshit we all tell ourselves to excuse our mediocrity.

In my career I had a few hit campaigns (way too few). While these hits lasted a brief time, they represented the most enjoyable days I spent in advertising. It really is fun to have people talking about something you've created.

One of my hit campaigns was the result of precision stealing. I didn't steal the idea, but I borrowed a structure. By paying attention to what really good creative people do, you can learn a lot and apply it to your work.

My partner had a terrific idea for a campaign we were working on. She got the idea from a character in a movie. The character never actually appeared in the movie but was referenced in it.

But we were stuck in the "idea" stage. We couldn't figure out how to make the idea into a spot. (By the way, one of the biggest problems creative people have is understanding the difference between an idea and a spot. I've written about this before.)

Anyway, we were struggling. One morning I was riding down the elevator of our building when I asked myself a question: How would Hal Riney have written this spot? One minute later I had the spot done.

Riney frequently used a technique in which he would have a narrator weave in and out through the dialogue moving the story along. Of course, he didn't invent this structure, but he used it very effectively.

The spot I did looked nothing like anything Riney would ever write, but by borrowing the structure I took a good idea and made it into a good spot.

In other words, I took an idea someone borrowed from a movie, applied a technique someone else borrowed from film school, and out popped something pretty good.

Sometimes, creativity isn't about inventing. Sometimes it's about re-arranging.

January 09, 2014

Strange Tales Of Christmas

Apple's mobile operating system -- iOS -- is used on the iPhone and the iPad.

The iOS system has a small share of the mobile device market. Only about 13% of mobile devices (phones and tablets) use it.

Google's Android system is the clear and dominant leader with about 80% of worldwide share.

And yet, there are some very strange data coming out of this holiday season's mobile retail sales.

A study released by IBM shows that although Android use is far more widespread than iOS, in the U.S. about 5 times as many Christmas shopping transactions were done on an iOS device than an Android device.

This is in line with data collected during the Thanksgiving season as well, and confirms previous findings that people use their iThings differently than their DroidThings.

Another interesting stat is that the average purchase on an iThing is over twice as large as the average DroidThing purchase.

These are not just little anomalies. These are huge differences that I'm sure have enormous implications for marketers (although what the hell they are, I have no idea.)

One of the underlying differences is probably related to income. The average iThing costs more than twice as much as the average DroidThing.

It may be that while iGeeks are using their devices to buy each other something, Droidoids can only afford to send each other pictures of their naughty bits.

By the way, I've seen your naughty bits and I'd rather you buy me something.

January 08, 2014

Cloning Television In 2014

Here at The Ad Contrarian World Headquarters we've been grumbling for years about how the theory behind much of online advertising is a delusion.

The theory goes something like this:
Consumers are no longer strongly influenced by the interruption model of advertising (TV, radio, print, billboards, etc.) In order to be effective, marketers must gain consumers' permission (the permission model) to interact with them. If marketers cuddle up to consumers this way, consumers will share their enthusiasm for the brand with others through the miracle of social media and great success will ensue.
This fairy tale still carries large weight in the marketing world. Regardless of the almost universal disappointment marketers have experienced with their own social media and "content" programs, they still somehow believe that everyone else is successful doing it.

But it's starting to fade.

Last year, Facebook pretty much abandoned the fantasy and got into the interruption model big time. Great big traditional ads started appearing in our streams. Facebook still has pretensions of social media, but it's pretty clear what it really is --  a social media channel with traditional advertising plastered all over it. If what I've read is true, Facebook is getting about 90% of its revenue from selling ad space, just like those nasty old TV networks.

The idea that Facebook is useful because consumers are having "conversations about brands" is as dead as QR codes. Okay, nothing is as dead as QR codes...

Now that Twitter is a public company and has to actually make money, we can expect the same from them.

In fact, all of "social media" is quietly in the process of morphing into just another channel for carrying traditional advertising. The delusion of "permission marketing" and "the conversation" and the "sharing of content" as the foundation for web advertising still gets lip service, but is being undermined by social media companies who are interrupting the shit out of us with ads.

Web ad strategy is turning out to be no different from the things it was supposed to supplant. All the wooly nonsense about sharing and conversations is beginning to sound gratuitous.

As usual, marketers and ad agencies are a couple of beats behind the band.

Although I am loathe to make predictions (I'd rather make fun of fools than be exposed as one) I am expecting online advertising to look even more like television advertising this year. The interruption model will continue its ascension and video spots will be the "new" rage.

Plus ├ža change...

January 06, 2014

10 TV Spots We Don't Need To See In 2014

Here at The Ad Contrarian World Headquarters we are trying to do everything possible to re-establish the idea that ads should be interesting.

Our thinking is that maybe if we make ads interesting we can get all the data monkeys to shut up for a few minutes.

In order to inspire creative people to do better, here are 10 TV spots that we've all seen a thousand times and we really don't need to see again in 2014.

If you can resist the urge to re-make these spots this year you will make yourself a better creative person and keep us TV viewers from killing ourselves.

Thanks in advance.
10 TV Spots We Don't Need To See In 2014
1. The two-white-guys-and-one-black-guy-go-to-a-bar spot.
2. The automotive sales event spot that makes fun of automotive sales event spots.

3. The soda spot where multi-ethnic people from all over the world jump around while a pop star sings.

4. The spot about how I have to plan now for my retirement.

5. The spot in which two famous athletes compete by doing something stupid.

6. The spot where a precocious 9-year-old helps out her clueless dad.

7. The girls-night-out spot.

8. The spot about how I can bank from anywhere using my cell phone.

9. The spot where the titles move around in all directions and give me a fucking headache.
10. The spot in which people of all sizes and colors repeat each other's words and finish each other's sentences. 
Every one of these spots sucks. They suck now, and they sucked 30 years ago when they were invented.

Please help us all out by taking a vow not to make any of these spots again in 2014.

January 02, 2014

Returning Monday

The Ad Contrarian will return on Monday with another year of strongly-held, ill-informed opinions. Keep that dial tuned right here.