October 15, 2019

Advertising's Decade Of Delusion

The ten years we have just experienced were expected to be some of the most fruitful and productive in the history of advertising.  We had amazing new tools and stunning new media that we never had before. The whole thing was head-spinning and certain to engender all kinds of remarkable opportunities for advertisers.

Our ability to reach consumers one-to-one with web-based platforms was sure to make advertising more personalized, more relevant, and more timely.

Brands' abilities to listen to consumer conversations through social media and react quickly couldn’t help but connect us more closely with our customers.

Consumers themselves would be one of our biggest assets by engendering conversations about our brands and helping us understand and define what our brands should represent.

Further, the web would have a democratizing effect on society and particularly in the business sphere where new brands could flourish without spending lavishly on marketing.

And yet, the past decade has been the most disappointing and disheartening period that I’ve experienced in my long advertising career.

It is widely believed inside and outside the ad industry that on the whole the state of advertising has gotten worse, not better.

Consumer research shows that regard for our industry is at a new low. It's gotten so bad that we have half the trustworthiness of lawyers.

Marketers are disillusioned. They don’t trust us. Their trade organization, the ANA, has officially stated that they believe corruption in our industry is “pervasive.”

Brands are facing strong headwinds. A recent study by Nielsen reported that consumers say they are 46% more likely to change brands than they were just 5 years ago, and only 8% say they are strongly brand loyal.

Regulators and governments are after us with a passion. They want to know what we are doing with data and whether we are acting illegally in collecting, trading and selling personal private information about consumers.

By steadfastly defending the abusive and creepy surveillance practices of our adtech ecosystem, the "leaders" of our industry are clearly on the wrong side of history.

As for consumers, one study showed that of all forms of advertising, the eight types rated the lowest by consumers were all forms of online advertising. Ad blocking apps are reportedly present on somewhere between one and two billion devices.

Meanwhile tens of billions of dollars are being stolen annually from our clients by online ad fraud.

Marketers are taking their advertising duties in-house and hiring consulting firms to do what we used to do.

As for the democratizing effect, it has been just the opposite. The web has produced advertising and marketing monopolies (Google, Facebook, Amazon, YouTube, etc) that would never be tolerated on dry land. Our industry has been right in the middle of scandals that have undermined our confidence in free and fair elections.

To say that the last decade has not lived up to expectations is like saying the Titanic was a boating mishap.

Our industry is in trouble. I believe we've had a lost decade. We have allowed ourselves to be bamboozled by the suspect assertions of articulate people -- and more than a few clowns -- masquerading as experts. We have lost any healthy degree of skepticism. It has cost us dearly.

Our industry needs to take a good hard look at our assumptions and where those assumptions have led us. It's time for the pretending to end.

September 19, 2019

Everything I Know About Advertising I Learned From A Blues Song

I was wasting time on the web the other day and I came upon an article from Medium called "Let’s Talk About How to Build a Brand." There was nothing actually wrong the piece if you're the kind of person who likes to read instruction manuals. It was kind of the 30-minute version of Marketing 101.

But, like so much of marketing thinking today, it was all brains and no guts.

It reminded me of my Aha! advertising moment when I realized how the whole thing works -- when I realized that it's not about how marketing works, it's about how people work. 

I was listening to an album by Ry Cooder called Paradise and Lunch, a monstrously great album. One of the tunes on the album is called Feelin' Good, which was written by a blues singer named J.B. Lenoir.

In two lines, Lenoir made me realize how simple the whole thing is and how stupid I'd been not to understand what was right in front of me. He tells us more about how marketing works than all the books in the worldwide marketing library...
"Feelin' good, feelin' good
All the money in the world spent on feelin' good"
And after years of working in advertising I finally understood how the whole thing works. People buy what they believe will make them feel good. 

Why do they buy an iPhone instead of a Samsung? Because they believe will make them feel good. A Ford instead of a Chevy? Because they believe it will make them feel good. A Bud versus a Coors? Because they believe it will make them feel good.

They don't buy to be part of a tribe, or to have a brand relationship, or to do any of the prodigiously analytical things our marketing prophets tell us. What our experts are seeing is what it looks like to us from the outside.

What people are actually doing is buy what they believe will make them feel good. 

Next time you sit down to create or evaluate an ad, remember this..."All the money in the world spent on feelin' good."

September 08, 2019

A Conspiracy Of Silence

For several years the advertising industry has been engaged in a conspiracy to deceive its clients and the public about online advertising.

It is not the kind of conspiracy you get when bad people get together to plot a crime. It is the kind of conspiracy you get when greedy, frightened people individually decide it is safer to keep their mouths shut than tell the truth.

For the last few years we have been flooded with scandals and revelations about corruption, fraud, and lies in the online advertising ecosystem. Here is just a partial list in no particular order:
The terribly damning part is that there are only two possibilities: Either agencies are remarkably stupid and don't know what is going on, or they know and are keeping their mouths shut. It's hard to decide which is worse.

I believe they have been engaged in an unspoken conspiracy.

Not a single one of the scandals involving online media were brought to light by a media agency. Not one. Let's put this another way -- not one of the scandals about online media were exposed by the people whose job it is to scrutinize online media.

Agencies, particularly media agencies, are as close to the online media industry as you can get. They are analyzing online media 24 hours a day. They are responsible for seeing to it that hundreds of billions of online advertising dollars are spent properly every year. They work very closely with media. They have the facts at their fingertips. They are assessing online media opportunities on behalf of their clients every day.

How can it be that reporters, who are not trained in media, have not nearly the resources to scrutinize media, and have no expertise in analyzing media, were able to sniff out scandal after scandal while the "experts" were not able to do so? It is not possible. It doesn't even pass the giggle test. As one very highly regarded media analyst commented to me recently, "agency bigwigs are notoriously paranoid and fearful. There's a strong code of silence..."

If it were left to the leaders of the ad industry, we would know nothing about any of the appalling stories listed above. By concealing their knowledge of deceit and dishonesty in online media, the ad industry has failed at one of their most consequential responsibilities - being trustworthy stewards of their clients' money. Instead, they have been responsible for wasting billions of client dollars. Why?

  • Because they're afraid to admit they've been played for fools by online media.
  • Because they get fees or commissions on most of the wasted billions.
Is it any wonder marketers are moving media functions in-house? One can only wonder what additional sleaze the media "experts" know of and are keeping quiet about.

The ad industry has allowed itself to crawl into bed with the squids at Facebook and Google and the rest of the devious adtech weasels. It makes us look like fools. Every week there are alarming reports of fraud, corruption, privacy abuse, and security failures in online media and we shrug our shoulders and duck for cover.

The ad industry, controlled by misguided and incompetent leadership at trade associations and holding companies, had better get its act together. By being lapdogs to the corrupt and dangerous online media we are quickly squandering what's left of our credibility.

We are on the wrong side of history and will continue to stay there until the silent conspiracy to protect online media ends.

July 24, 2019

Three Reasons To Like Gary Vee

If you ever tell anyone I said this I'll deny it, but I kinda like Gary Vee. I know he's full of shit but I can't help liking the guy.

Here are three reasons I like him:

1.  He gives hope to those suffering from DDD (Delusional Disrupter Disorder.) These meatballs think that Gary's "just a poor boy with a vision" hooey is a model for success. They don't understand probability. They have about as much likelihood of gaining success from Gary's homilies as I have of winning a hugging contest. Nonetheless, he gives them hope.

2. Our business has two kinds of bullshit - the cold bullshit of the data weasels and the hot bullshit of the Gary Vees. You can have your Powerpoint-addled jargon-spewing data-monkeys. I'll take Gary's hot bullshit any day.

3. He had to grow up in New Jersey with the name Vaynerchuk. You try it.

June 24, 2019

The Only Test Of Brand Purpose

The message from Cannes this year is very clear. Every brand in the world is now trying to woke-wash itself to appear more acceptable to socially conscious consumers. Much of it is cynical bullshit.

The key to understanding which companies are truly doing the right thing, and which ones are using token "brand purpose" as a PR gimmick is very easy. There is only one conclusive touchstone to knowing who is truly committed to social welfare and who is a cynical poseur...

To what lengths do they go to avoid paying taxes?

The most serious attempts to create a better society are substantially funded by tax dollars: education; affordable housing; civil and personal rights; job training; infrastructure; health care. Companies who take unusual and excessive measures to pay little or no taxes are depriving our citizens of the tools we need to improve our societies.

The hitching of a brand purpose initiative to a politically fashionable cause while behind the scenes going to great lengths to avoid paying a fair share of taxes is a deplorable and cynical manipulation of public perceptions.

The fact that these tax gimmicks may be technically legal does not impress me one bit. It is perfectly legal for me not to support charitable causes, but as a responsible citizen I choose to be better than the law requires.

As far as I'm concerned, corporations who use advertising and marketing dollars to pound their chests about their trendy brand purpose cause-du-jour, but employ legions of lawyers to avoid the true cost of improving society are nothing but scum.

June 19, 2019

Dying At Cannes

For the 100th consecutive year I did not go to Cannes. But the good thing is, I know exactly what happened and saved myself thousands of dollars. As a free service to you other losers who didn't attend, here's what you missed
  • A very casually dressed ceo from a very big holding company said that the consumer is changing and we have to change to keep up with the changing consumer. He said we have to evolve or die. 
  • A very rich and famous creative person gave a very stirring speech about how creativity is the heart and soul of our industry and we have to get back to celebrating creativity. Agencies that don't prioritize creativity won't be around long.
  • Another famous creative person with very expensive eye-wear said we need to be brave. Those that aren't brave won't last.
  • A very earnest female executive gave a talk about how we have to value all people regardless of sex, sexual orientation, race, religion, absence of religion, age, ability, body type or gluten sensitivity. Marketers that don't value diversity will soon be dead.
  • A very European planner gave a talk about how we have to stop thinking short-term and realize that brands are built by long-term strategy. Those who focus on the short-term will disappear in the long-term. (Then she hurried out to see how many tweets her talk got.)
  • A panel discussion was held to discuss the future of marketing. It was agreed that more personalization was necessary to make marketing more relevant to consumers. Brands that don't have better insights into individual consumer behavior don't have long to live.
  • A panel discussion was held to discuss the future of the agency business. It was agreed that the agency business must align its priorities to the evolving needs of our clients or we will fade away.  
  • A very famous celebrity from outside the advertising industry gave a talk on why he/she now pays as much attention to social media as he/she does to acting/singing/basketball. "You have to stay in touch to stay alive."
  • A very famous billionaire sent a very mid-level executive to explain how their company is committed to protecting consumer privacy by developing an AI process to screen out everything and everyone that is bad. "If we don't do that, we have no future."
  • A research expert said that in order to understand Gen Z we must forget everything we know about Millennials, who were digital natives, and start to understand Gen Z, who are "digital aboriginals." Ignoring the needs of Gen Z is a death sentence.
  • A panel of branding experts agreed that consumers now expect brands to be socially responsible and make the world a better place for all people regardless of sex, sexual orientation, race, religion, absence of religion, age, ability, body type or gluten sensitivity. Brands that don't do that will soon be extinct.
There is so much potential for death in the advertising business these days that there is only one responsible way to avoid marketing's grim reaper -- hang out on yachts and gulp putrid rosé.
Thank goodness there are thousands of men and women from around the world who are willing to do this on our behalf.

Otherwise, we'd be dead.

June 11, 2019

My B2B Dream

I had a B2B dream last night. I heard somebody say...
We want to become your customer experience partner. We'll help you architect cutting-edge systems, both human and virtual, from high-quality product provision to unique problem resolution through customized resource management solutions.

We are laser-focused on re-imaging customer experience and future-proofing your business. In doing so, we also provide hands-on training to keep your employees engaged, more productive, and up to date on all aspects of your integrated solution suite.

Regardless of what industry you're in, we have the answers for your resource and system needs. Our data-driven, turn-key deliverables protect your most valuable assets - your customer relationships! We have the ability to work with many different industries, quickly responding to changing applications and environments, while staying focused on quality and best-in-class performance.

We analyze your historical and forecasted needs to ensure high execution while reducing costs

Our experienced experts will visit your distributed work environments and evaluate your operating modalities to advise on enhancements that will improve your key measurables and create ongoing alignment with sales and engagement goals. They’ll deliver a detailed report and recommend solutions tailored to your toughest KPI challenges.

Here are some ways that our eBusiness solutions can benefit you:
    • Dynamic integration
    • Catalog extracts  
    • Process regeneration
We are committed to both innovation and speedy adoption of disruptive sales-side ecosystems.

Our highly-trained associates take your operating blueprint and provide you with a finished global solution. The final resource set will be of the highest quality and will be validated and delivered with robust support structures. Additionally, we will source and integrate these structures into your assembly per your stated requirements.

In short, we are inverting the traditional systems architecture and abandoning outmoded team structures in favor of high-octane solutions that supercharge opportunities for growth.

We want to be your total resource solutions partner!
I said, "Okay. But what the fuck do you DO?"

June 04, 2019

The Wrong Math

Daniel Kahneman, Nobel Prize winner, says people don't believe facts. They believe experts.

In some fields experts have credibility. Mostly it is in fields of hard science like medicine, physics, and chemistry where expert opinions can be tested.

In soft science, like economics and sociology, where enormous variables exist and controls are hard to establish, experts have far less credibility. There is also far less agreement within these disciplines. A quote attributed to George Bernard Shaw goes like this, "If all the economists were laid end to end, they would not reach a conclusion." Not because they are any less serious, but because their theories are difficult to prove or disprove.

Sadly in the field of advertising and marketing, experts are not usually hatched based on their record of producing reliable results, but on their ability to attract attention. Consequently we should be highly dubious of their "expertise." But we're not. Because as Kahneman also says, "a reliable way to make people believe in falsehoods is frequent repetition."

One of the most frequently repeated and, in my opinion, highly dubious tropes in our industry these days is the idea that the paragon of media strategy is "mass one-to-one" communication. In non-jargonista terms, this means reaching large numbers with individualized messages.

You would expect that this assertion would be met with skepticism. For one thing, there is no record of "mass one-to-one" communication achieving anything. You might argue that no one has yet been able to engineer "mass one-to-one" and that is why there is no record. Which is exactly my point. Shouldn't we exercise a little skepticism about a theory for which there are no examples?

All of our huge brands -- Apple, McDonald's, Coca-Cola, Toyota, Budweiser, Tide, Crest, Nike -- (I could go on here all day but you have work to do) have been created by the supposedly wasteful and sub-optimal mass media.

The power of the marketing feedback loop seems to have caused our industry to lose its ability to be sober or skeptical. Or as Kahneman might put it, facts don't matter. Experts do.

The reason we accept the fairy tale of "mass one-to-one" with absolutely no evidence is that a) experts are talking about it, and b) our math experts (in media and data) say it's true. 

I don't believe the experts, but I do believe in math. I believe math can offer us insights into how advertising works and how consumers can be influenced. The only problem is, I think we're using the wrong math. If you'll pardon my cliché, we have the wrong algorithm.

I don't know what concept of math the data experts use to persuade marketers that "one-to-one" is the media model of choice, but I believe the math model we should be using to understand media effectiveness is probability. In other words, what media strategy is most likely to produce the desired result? For large consumer-facing brands, there is ample evidence that (the prudent use of) broad based media has the highest likelihood of achieving the desired result of building substantial brands, and almost no evidence of anything else doing so.

The mathematics-based rationale for the primacy of mass one-to-one advertising and its alter ego precision targeting seem to go something like this: a) you are not wasting money on people not interested in your product, and b) customized ads are more relevant and persuasive.

This may be true for certain types of B2B marketers and highly-specific brand categories, but I think both these rationales are wrong for mainstream brands. I think probability would tell us three reasons why they're wrong.

First, I believe brands are far more likely to achieve big success if they are well-known. Public media (broad based media) make you well-known. Private media (one-to-one) don't. Perhaps the best argument for this can be found outside the advertising industry. As many have noted, in their early stages Google, Facebook, and Amazon were brands that became successful without advertising. How did they become successful? One component was that news media fell in love with them and gave them zillions in free coverage. These companies became well-known without advertising, and being well-known helped them grow. The rules of probability don't just apply to advertising, they apply across the board.

Second, I believe people are more likely to accept the legitimacy of brands that advertise in public than brands that advertise in private

Third, except for sociopaths, we all (secretly) want to fit in. Understanding what products fit with our peer culture is part of fitting in. This is why goths wear black and golfers wear plaid. Consequently, we are more likely to buy a brand about which everyone in our group knows what the brand stands for. Public media provide the framework to believe that your group has the same understanding of what the brand is about as you do. Private media do not. When advertising is customized for individuals, we have no idea if others know what we know.

Byron Sharp tells us the key to growing a brand is acquiring new customers. I believe probability tells us that the more people we communicate with loudly and in public the more customers we are likely to acquire. 

Another way to look at this...

The great Rory Sutherland says that "A flower is just a weed with an advertising budget." His point is that flowers expend a lot of resources to look and/or smell pretty. And about 125 million years of evolution have shown that the expenditure pays off. 

If there was a superior way for a rose to attract bees by individually or precision targeting certain types of bees with certain types of attractiveness, one would assume it might have evolved by now. Instead, roses produce a lovely, fragrant flower and let probability do its work.

Only time will tell if "mass one-to-one" is the formula for building big brands. I'm betting the under.

May 28, 2019

The Stupidity Of Ignoring Older People

A few weeks ago I was invited to speak at the NextM conference in Copenhagen, hosted by Group M.

Here is a short excerpt from my talk. In this section I'm talking about the stupidity of marketers who are obsessed with millennials and ignore older people.

May 22, 2019

I Go To Conferenceland

One of the downsides of making your living as a loudmouth is that you have to do it in public. This means participating in conferences. As everyone knows, there's nothing in the world as dreary as a marketing conference, with the possible exception of a State of the Union address or lunch with a CMO.

It is my good fortune that when I speak at conferences I am usually billed as the keynote, which often means I get to speak first. Speaking first has one great advantage. After I speak I can wait until no one's looking then sneak out the back door and find a nice quiet bar.

I was at a conference a few months ago and I decided to be mature and hang around and listen to some speakers. I'll never make that mistake again. Here's what I learned:
  • The future is going to be amazing. No one's going to have to do anything. Everything will be done for us by AI, or robots, or Jeff Bezos. We won't have to work, rotate our tires, or chew our food.
  • Robots, by the way, will be stealing our jobs, our airline miles, and our children
  • Women will also be amazing. When they run everything there will be no poverty, or inequality, or wait times at the Genius Bar. Except that one from Theranos.
  • Advertising, on the other hand, is not amazing. In fact, it's dead. It's going to be replaced by Google glasses or flying cars or moving sidewalks or something.
  • Better expect the unexpected because if you expect the expected than your expectations will be unexpectedly... I don't know...something very scary.
  • China and India are going to have their own internets which will be better than ours because your password will be embedded in your brain or your kidneys and you won't have to update Flash every half hour.
  • Data is not only the secret to marketing success, it also makes your car's engine run smoother and -- something you probably didn't know -- it makes a great Father's Day gift!
  • Facebook is changing. No, really, they mean it this time! They're going to be double-extra careful with our data, our bank account numbers, and our drug bust records by taking all our files and putting them in Ziploc bags. And if anyone tries to break into them they will suspend them and not let them open another Facebook account for almost twenty minutes. Unless they use another name.
  • Consumers love your brand and want a relationship with it and want to join the conversation about it and share it with their tribe... or, wait a minute... (DISSOLVE TO 30 MINUTES LATER)... brands mean nothing to consumers. The internet has disintermediated everything and the whole idea of brands is totally stupid... (CUT TO PANEL DISCUSSION)
  • Gen Z is a whole new species of human that is even cooler than millennials. You have to get rid of all those clueless millennials you just hired because they are stupid dinosaurs. If you don't have a Gen Z strategy in place by tomorrow 9am you are already too late and you are dead. By the way, we are holding a 3-day Gen Z Insider Summit in Orlando next month...
  • Consumers will love your brand of orthotic shoe inserts even more if your brand purpose aligns with their values and they know you are committed to world peace and colonic cleansing.
  • And, by the way, everything is changing and if you don't change you will be left behind and die. It doesn't matter what you are, you have to change into something else. It doesn't matter what you change into as long as you stop doing whatever it is you are doing and start doing something else that requires AI, robots, or Jeff Bezos.
Bottom line: The only sensible reason for attending a marketing conference is to get as far away as possible from the dreary reality of marketing. Like Disneyland, marketing's conferenceland is so much cleaner, prettier, and safer than actual marketing.

My advice is stay the hell away from marketing conferences unless, of course, I'm speaking. In which case, bring the whole family.

April 30, 2019

Marketing And Modesty

Human beings have an annoying habit of thinking we know things we don't really know.

In “The Cooling World," April 28, 1975 Newsweek informed us that meteorologists "are almost unanimous" that “catastrophic famines might result from…global cooling

On Sept. 14, 1975 The New York Times told us that this global cooling "may mark the return to another ice age."

And on May 21, 1975 the Times said "a major cooling of the climate is widely considered inevitable" because it has been "well established" that the climate in the Northern Hemisphere "has been getting cooler since about 1950."

Seems they were wrong.

Up until a few years ago, we thought we knew what the universe was made of. There was matter, which was largely atoms composed of electrons, neutrons, and protons. And there were four forces - gravity, electromagnetism, and the strong and weak nuclear forces.

It turns out we have no idea what the universe is made of. Science now believes 94% of the universe is "dark matter" and "dark energy." Which is another way of saying, we have no fucking clue what it is.

My psychiatrist friends often tell me how unfathomable a lot of human behavior is. And yet 27-year-old account planners seem to understand behavior so thoroughly.

If the A students who study physics, math, climate and medicine are so often misguided, do we really believe the C students who study advertising and marketing know anything?

I’ve been around advertising and marketing a long time, and I’ve noticed something. I’ve noticed that we have a lot of unreliable opinions.

I had a long and pleasant career in the advertising business. I’ve had the opportunity to create multi-million dollar campaigns for brands like McDonald’s and Toyota, and Bank of America and Chevrolet.

I’ve been invited to speak in dozens of countries.

My opinions and comments have been sought by organizations like the NY Times, the BBC, the Wall Street Journal and other substantial media groups around the world.

And I’ve written 4 books about advertising that were Amazon #1 sellers.

I don’t say any of this to brag. I say it for the exact opposite reason — to make an important point. The point is this - I don’t know anything. I am faking it. I always have been. I have no idea why anybody buys anything. I have no idea why you buy Coke instead of Pepsi, or Nike instead of Adidas. As a matter of fact, I have no idea why I buy Coke.

As we used to say back in Brooklyn, I don’t know shit.

In my career I’ve worked with hundreds, if not thousands, of marketing and advertising people. And I mean no disrespect, but I don’t think they knew shit either. Mostly what we do is precision guessing.

I think we would be wise to keep open minds and admit that a great deal of our understanding of consumer behavior is incomplete at best, and wrong at worst.

We would do ourselves and our industry a whole lot of good to exercise a little modesty and discretion when we claim to know things we don’t really know.

April 16, 2019


AI is now in the same fantasy phase that online advertising was in 20 years ago. We are being bombarded with horseshit about how AI has made everything so wonderful -- and in the future is going to make everything even wonderfuller.

Here are a couple of spots from AT&T and IBM going all goofy about AI.

And this...

As always with new technology, the benefits are easy to foresee and the dangers are either invisible or willfully ignored. Twenty years ago, when the ad world started to go all gaga over "interactive advertising," who could have foreseen...
The current mania for AI - and its relentless promotion as our fabulous future - ignores an enormous potential for mischief and danger. The brainless enthusiasm for every flavor of online advertising only cost us money (ok, and maybe a few elections, and our reputation as an industry, and our confidence in democratic institutions, and our privacy rights.) The same wide-eyed stampede into AI could be a lot more costly.

Stephen Hawking said, “Whereas the short-term impact of AI depends on who controls it, the long-term impact depends on whether it can be controlled at all.” Hawking went on to say that ignoring the dangers of AI “would be a mistake, and potentially our worst mistake ever." AI could "spell the end of the human race".
Hawking is not alone. Elon Musk, hardly a technophobe, says, “I think we should be very careful about artificial intelligence. If I had to guess at what our biggest existential threat is, it’s probably that.” 

Bill Gates, another famous Luddite dinosaur, says, "I agree with Elon Musk and some others on this and don't understand why some people are not concerned."

Of course, the simple-minded marketing industry - armed with its usual obsessions and delusions - can't see anything in AI but 1) another miracle to promote, 2) a topic for dreadful gee-whiz "content", and 3) a great new jargon term to insert into every sentence.

This time around, can we please be a little more mature and thoughtful?

Us? Only kidding.

February 21, 2019

More Elephant Advertising

There is a cute little research trick that semi-clever operators use to con gullible rubes. I will give you a small, silly example of it which I hope will make it more understandable on a large, global scale. It goes like this.

Let's say you want to open a strip club in a residential neighborhood. Obviously, no one in the community in their right mind wants a strip club in their neighborhood. But as the potential owner of the strip club you have to make a case to the city council to try to get your permit.

You do a survey in your community. What you don't ask is a clear, direct question, "Do you want a strip club in your community?" because you'll get a resounding no and a few solid blows to the golden globes.

Instead, you ask a question that sounds kinda like a suitable question: "Do you think the residents of Smallville would benefit from more recreational and entertainment opportunities?" This question has a lot of benefits.
  • Who is going to say no to the vague notion of "more recreational and entertainment opportunities?"
  • The so-called "recreational and entertainment opportunities" are not defined
  • The social ramifications (cost/benefit relationship) of the so-called "recreational and entertainment opportunities" are not described
Once the survey is completed you go to the city council and show them your pitch slides:
  • 88% of people in our community are in favor of "more recreational and entertainment opportunities." That's what we provide!
  • If approved, revenue from our company will contribute over $1 million annually to the tax base in the community.
  • We understand that not everyone will be in favor of our business, but enjoying our shows is entirely voluntary and no one is forced to patronize our establishment.
Even a city council isn't dumb enough to swallow this bullshit. Even a city council isn't dumb enough to not understand when they're being conned. That's how they're different from us.

I would submit to you that this is exactly the type of specious rationale that underpins the entire online ad industry. The con goes like this: the reason that tracking and spyware are necessary is that consumers want "more relevant advertising." This claim is put forth virtually every time the spy masters are asked to justify their practices.

To quote a semi-clever operator named Zuckerberg, “People consistently tell us that if they’re going to see ads, they want them to be relevant.

Yeah, right. People are out in the streets marching for more relevant advertising.

A recent New York Times piece by a communications professor and a law professor exposed this bullshit for what it is. They reported on two large studies they did. Here are some of the results...
"Sixty-one percent of respondents said no, they did not want tailored ads for products and services, 56 percent said no to tailored news, 86 percent said no to tailored political ads, and 46 percent said no to tailored discounts. But when we added in the results of the second set of questions about tracking people (emphasis mine - BH) on that firm’s website, other websites and offline, the percentage that in the end decided they didn’t want tailoring ranged from 89 percent to 93 percent with political ads, 68 percent to 84 percent for commercial ads, 53 percent to 77 percent for discounts, and 64 percent to 83 percent for news."
By posing questions in manipulative ways that don't actually describe the issues in question, it is possible to use research to distort the truth. If you ask someone "do you prefer ads that are relevant?" of course they're going to say yes. Just like if you ask if they want more entertainment opportunities.

But if you're asking the appropriate question -- "Are you willing to trade private, personal information about yourself and your family, and have your movements tracked and catalogued both online and offline, and have your emails and texts read and archived, and have files about you sold to anyone who wants to buy them, in order to get more relevant advertising?"-- I don't think you need to be a Harvard-billionaire-semi-clever-operator to know that you better be wearing a cup.

February 14, 2019

True Detective: How Bullshit Becomes A Fact

There is so much bullshit in our business that sometimes you have to wonder where it all comes from. Yesterday I decided to "peel back the bullshit" and see if I could reconstruct how something that was completely wrong wound up being represented as a fact in reputable publications like Forbes and The Drum. Here's the story.

Yesterday Samuel Scott tweeted out a quote from an opinion piece in The Drum.

Anyone with half a brain knows that millennials are nowhere near having the most spending power. In fact, on a per capita basis they have the lowest spending power of any adult group. People over 50 control 70% of the wealth in the US, and are responsible for about half of all consumer spending.

So I decided to do a little detective work and try to figure out where this bullshit "fact" came from. In doing so, I got a nice close-up look at the astounding ignorance that is embedded in our industry and how bullshit, repeated with enough frequency, becomes a fact.

I started with the piece in The Drum. It was called "Why direct-to-consumer companies are using Influencer generated content to win over the market." It was a thinly disguised self-promotion piece full of the usual data hysteria. As noted above, the piece claimed that millennials "have the most spending power of any generation."

As justification for this claim, the article linked to this article in Forbes entitled "How To Tap Into The Millennial $200 Billion Buying Power With Social Media" which asserted that "By 2018, they will have the most spending power of any generation." 

The article offered no back-up for this claim other than a link to this thing called "41 Revealing Statistics About Millennials Every Marketer Should Know." This piece lived on an agency website, was written by someone who was two years out of college who called herself a "Marketing Strategist." The marketing strategist had this to say...
Once again, there was no back-up for this claim other than a reference to something called "Bazaar." Searching for this source lead me to a pdf from 2012 entitled "Talking To Strangers: Millennials Trust People Over Brands" by a company called Bazaarvoice that sells some kind of software for harnessing the power of "user generated content." (Remember that?)

Once again, there was no detail or proof, just this assertion...

The attribution for this claim was a footnote about a book...
1. Kit, Yarrow and O'Donnell, Jayne. Gen BuY: How Teens and Twenty-Somethings Are Revolutionizing Retail, 2009.
The book in question was published in 2009 and was one of those "millennials are a new species" things that were all the rage until it turned out that millennials were pretty much just like everyone else. I couldn't find a direct claim in the book (frankly, I didn't look very hard) that "millennials have the most spending power of any generation." The closest thing I found was this:
"Generation Y, (remember when millennials were called Gen Y?- BH) those born between 1978 and 2000 has overtaken baby boomers in sheer numbers and is poised to do the same with its incomes by 2017..." (Emphasis mine, BH)
Of course, this turned out to be completely wrong. Millennial income did not overtake baby boomers in 2017. According to Business Insider, in 2018 in the US baby boomers out-earned millennials in every state in the union. "In all 50 states and Washington, DC, the median millennial made less money than the median Gen Xer or baby boomer...The gap in median income between millennials and baby boomers ranged from the older generation making about 25% more than millennials in Iowa to 65% more than millennials in Alaska."

The average millennial income is about $35,000. The average baby boomer income is about $46,000. There are about 9% more millennials than baby boomers, but their income is about 24% less. So even though there are substantially more of them, in aggregate their income is way behind baby boomers.

Here's a graph that demonstrates that income per capita among baby boomers is far higher than millennials.

One more thing. Even if millennials had higher income than baby boomers, that still doesn't mean they would have "the most spending power." Spending power is not a function of income. It is a function of income plus accumulated wealth plus access to credit. According to the Federal Reserve, baby boomer wealth is more than 15 times greater than that of millennials (which means they also have way more access to credit.)

So let's recap the timeline.
- In 2009, a book incorrectly predicted that millennial income would surpass baby boomer income by 2017.

- In 2012, in a self-promotional pdf by a software company, this false prediction was misinterpreted to mean that millennials would have "more spending power than any other generation" by 2017.

- In 2017, a piece of "content" on an agency website, written by a "marketing strategist" two years out of college, used this quote from the software company to assert that millennials "will have the most spending power of any generation by 2018."

- Later that year, an article in Forbes used the assertion on that agency website to justify a claim that, "By 2018, they (millennials) will have the most spending power of any generation."

- And yesterday, in 2019, an article in The Drum leaning on the piece in Forbes, proclaimed that millennials "have the most spending power of any generation."
And that, my friend, is how in the slovenly and slipshod world of marketing, bullshit becomes a fact.

January 30, 2019

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...

“...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%.

January 22, 2019

How Brand Advertising Became Synonymous With Bullshit

It has become a generally accepted truth in the marketing industry that we are too focused on short term results and not focused enough on brand building. Field and Binet have done excellent work to demonstrate this. Everyone from Byron Sharp to Martin Sorrell have commented on it.

Despite our recognition of this issue, we continue down the destructive path of short-termism.

A recent post on LinkedIn by Prof. Marc Ritson bemoaned this. Ritson included a graph in his post showing that short-termism is not just continuing, it's accelerating.

"Its incredibly depressing to see that this trend of short termism is not just going to continue, it’s getting worse,"
said Prof. Ritson.

If we know that continued investment in short-term tactics at the expense of long-term brand building is counter-productive, why do we continue to do it? Some of the reasons are obvious:
  • Short-term activities show instant results: And there's nothing marketers like better than instant results.
  • Brand building efforts yield soft measures: Even if you're doing a great job of brand building, how do you demonstrate it? Indications of brand strength are not the measures that impress CFOs or Boards. They want sales, and they want 'em now.
  • The web: Online advertising has become the dominant form of advertising and it has been used almost exclusively as a short-term (direct response) medium. As Tom Goodwin says, "Why has there never been a brand built with digital advertising? There are many answers, the main one is that we've never tried to."
  • The brief life of a CMO: When your shelf life is measured in months, there is little incentive for you to think in years.
But there is another reason for our discomfort with so-called brand building activities - and no one likes to talk about it. In some circles "brand advertising" has become synonymous with bullshit. And, sadly, in some circles it is bullshit.

We have frittered away substantial credibility by allowing anything that doesn't have a cogent sales message to be called brand advertising. Much of what we call brand advertising has become squishy and free of strategic discipline. We've become flabby and self-indulgent.

Brand advertising has come to mean pretty much anything we can put a logo on. There is almost no frivolous marketing activity that can't be excused as "branding." Put your logo on a pair of socks? Branding.

In reality, there are two kinds of things we call "brand" ads -- those that are specific to a product and actually help sell something, and those that are someone's hobby horse with a logo pasted on at the end. The unfortunate part is that our dreadful vocabulary defines them both as the same thing -- "brand" advertising. They are not.

Pretty pictures and a nice track is not enough. Pounding your chest for world peace is not enough. Buying a pop tune and having people jump around is not enough. Successful brand building is difficult work and requires advertising that says something.

The ads that best build brands are those that have a clear and specific message about a product and deliver it in a memorable way.

Just because your ad is image heavy and free of a sales message doesn't mean you're building a brand. Not selling is not enough.

January 14, 2019

The Simple-Minded Guide To Marketing Communication

We marketing people have a dreadful habit of taking the obvious and making it incomprehensible. So today I would like to go against the grain and take the obvious and make it more obvious.

If you are someone who has to make decisions about how to spend marketing dollars, here are some principles I believe in for simplifying and clarifying your thinking.

The first thing we have to understand about marketing communication is that there are no absolutes. There are just likelihoods and probabilities. When making communication decisions, our job is to assess likelihoods and probabilities. In other words, precision guessing. We need to reckon which of the many alternatives we are faced with has the highest probability of producing the result we are looking for with the budget we have.

A second principle is to understand the limits of what we do. We don't have as much power to create business greatness as we think we do. There are too many important aspects of business success that are out of our control. We don't control the product; we don't control the pricing; we don't control the distribution; we don't control the employees -- we only control the message. We have to be realistic about the limits of what the message can impart to a poorly made, badly designed, overpriced, hard-to-find, product. Or a product that has any one of those characteristics.

Third is perhaps the most obvious. But it is the big secret that is hidden in plain sight. Brands that are in the spotlight have a much higher likelihood of being successful than brands that are not in the spotlight. This is where we have leverage. For this reason alone all marketing communication should have a common objective -- to find a piece of the spotlight.

This is also one of the reasons that our industry's current obsession with precision targeted, one-to-one advertising is misguided. Precision targeting may be valuable for direct response. But history shows us that direct response strategies have a very low likelihood of producing major consumer facing brands. Building a big brand requires widespread attention. Precision targeted, one-to-one communication has a low likelihood of delivering widespread attention (see this from last week.)

The spotlight is not a guarantee of success, but it creates a much higher likelihood of success. It is a simple calculation: you are more likely to be more successful if you are more famous and more visible. You may not like this calculation or approve of its ramifications, but it should be self-evident to anyone who wants to look at marketing with a clear eye. Do you think Donald Trump would be President if The Apprentice had been a webinar?

There are many ways to attempt to find the spotlight. Some brands find it naturally because the media fall in love with them. Tesla is a perfect example. So are Amazon, Google and Uber. The amount of free spotlight these companies have enjoyed because of press attention is incalculable.

These brands make achieving high visibility seem easy. It is anything but.

Sadly, you have a very low probability of being a Tesla, an Amazon, a Google, or an Uber. Maybe one in 10,000 brands are that interesting. The belief that you can use one of these companies as a model for your communication strategy is a delusion. It has a minuscule probability of happening for you. Most of us have to think or buy our way into the spotlight.

Finding the spotlight can be attempted in a number of ways. There is no "right way." You can do it with PR, you can do it with social media, you can do it with advertising. Your job is to find the most likely strategy for getting a piece of the spotlight at a price you can afford.

Once you decide on your strategy, there is one other principle you must employ. There is nothing that creates a greater likelihood of attaining high visibility than creativity. The probability of your efforts shining a light on your brand is enormously higher if you have a imaginative idea behind it. I will say it again - regardless of what communication or media strategy you employ, there is nothing more likely to garner you a piece of the spotlight than a great creative idea.

So let's recap:

     - Your most under-acknowledged job is assessing likelihoods and probabilities.
     - You must be realistic about the power of marketing communication.
     - One of the most essential characteristics of a successful brand is high visibility.
     - One of your strategic imperatives is to produce fame and visibility by garnering a piece of the spotlight.
     - Achieving a place in the spotlight is extremely difficult.
     - You are more likely to attain the spotlight by being widely seen rather than narrowly focused.
     - Splitting hairs over words in briefing documents is largely a waste of time. Most of the distinctions you draw between your brand and your competitors' are lost on consumers. A much more productive discussion is, "Which strategy or execution is most distinctive and has the highest probability of making us famous?" In the long run, the strategy with the most value for your brand is the one that is most likely to buy you high visibility.
     - A key question you must answer is whether you have the assets to achieve a piece of the spotlight? The assets that have the highest probability of garnering that are money and creativity. There is rarely enough money.

As a simple-minded guy, all of this seems perfectly obvious to me. However, our industry appears to be in such a state of confusion that the obvious is no longer credible.

Please do not send me your favorite example of a big brand that was built outside the lines of these principles. Of course there are some. There are no rules. Just likelihoods and probabilities.

January 07, 2019

Why Online Ads Haven't Built Brands

This post is adopted from a podcast I did last year.

One of the questions I’ve been wrestling with for years is why online advertising seems to be incapable of building major consumer-facing brands.

We’ve had 20 years of phenomenal growth of online advertising and yet I have trouble coming up with one example of a major consumer-facing physical brand that was built by online advertising. I can think of no examples of major brands of beer, soda, cars, toothpaste, paper towels, candy bars, soap, fast food, peanut butter — you get the picture — that were built by online advertising.

After 20 years of existence radio and TV had built hundreds - if not thousands - of consumer brands.

There are some who would argue that there are very big web-native brands that have been built by online advertising - e.g., Amazon, Google, and Facebook. I’m not so sure that advertising played a major role in the building of any of those brands, but let’s leave that argument for another day and just focus on brands that are physical and not web-native, which probably constitute somewhere around 95% of the products we buy every day.

What’s the issue with online advertising that has rendered it ineffective at advertising’s most important job — building a major brand?

For years I fumbled around trying to answer this question but I’ve never really understood it. I have blamed an absence of creativity. I have blamed the fact that it’s mostly direct response style advertising, but I’ve never really evolved a comprehensive theory of what the problem is.

But someone else has. A while back I received an email from Richard Shotton, a very smart guy and author of the wonderful book, The Choice Factory, directing me to a piece from 2014 called Ads Don’t Work That Wayby a guy named Kevin Simler on a blog called Melting Asphalt. I’m going to do my best to summarize Simler’s argument, but reading the original is highly recommended as my interpretation of his argument is likely to be flawed at best.

Simler starts by quoting some standard explanations of how advertising works at building brands. Let’s borrow some terminology from subatomic physics and call these “standard models.” Here are some examples from standard models:
“An ad succeeds at making us feel something and that emotional response can have a profound effect on how we think and the choices we make” 
“By creating positive associations between the advertised products and feelings like love, happiness, safety, sexual confidence... these associations grow and deepen overtime making us feel favorably disposed toward the product and ultimately more likely to buy it“
“advertising rarely succeeds through argument or calls to action instead it creates positive memories and feelings that influence our behavior over time to encourage us to buy something at a later date.” In other words, “if Coke shows us enough images of people beaming with joy after drinking that product we’ll come to associate Coke with happiness and then sometime later will be more likely to purchase coke"
Simler is not happy with these explanations. He says it portrays us as far less rational than we actually are. “While we may not conform to a model of perfect economic behavior, neither are we puppets at the mercy of every Tom Dick and Harry with a billboard. We aren’t that easily manipulated.”

Instead he offers an alternative to the standard models that he calls "cultural imprinting.” Don’t be turned off by the awkward terminology. The theory underpinning his cultural imprinting idea is that in some way we all want to be part of what is culturally acceptable.

As he says, brand images are "part of the cultural landscape we inhabit. They provide cultural information. When we ignore brand messages we’re missing out on valuable cultural information and alienating ourselves from the Zeitgeist." He says this puts us in danger of becoming outdated,  unfashionable, or otherwise socially hapless. We become like "the kid who wears his dad’s suit to his first middle school dance." In other words, in some way brand choices send messages to others about who we are. And no one wants to send the wrong messages.

This is not new thinking. When I first started working in the advertising business 1,000 years ago we used to call products that were most responsive to advertising “necktie products” -- products that are used or consumed in public and are plainly visible to others. Why are products like beer and soda and cars so responsive to advertising? Because these products are used in public and are highly visible. Whether we care to admit it or not, those of us who are not sociopaths prefer to be socially acceptable among our group.

So what does all this have to do with the online advertising problem? Here is the connection I’ve been missing. In Simler's words “cultural imprinting relies on the principle of common knowledge.  For a fact to be common knowledge among the group, it’s not enough for everyone to know it. Everyone must also know that everyone else knows it.” 

In other words, part of our purchasing calculation is not just our belief that X is an acceptable product, but our expectation that other people believe this brand is acceptable because they know what we know.

Here is an example he uses to describe purchasing behavior using the standard model…
We see a Nike ad that makes an association between Nike and athletic excellence. Over time we internalize this association and feel good about Nike, and when it comes time to buy some sneakers at some later date we are more likely to buy Nikes.
In the cultural imprinting model it starts the same…
We see a Nike ad that makes an association between Nike and athletic excellence. 
But here’s what’s different. Over time we understand that everyone else has seen Nike ads and they also associate Nike with athletic excellence. So at some later date when we buy a pair of Nikes we don't have to worry that our group will think we're idiots.
Of course, this does not guarantee we will buy Nikes, but it makes the likelihood greater. And as I have written ad nauseum, marketing is about one thing only -- likelihoods and probabilities.

For advertising to be effective in the "cultural imprinting" model, it’s not enough for it to be seen by a single person or even by many people. Someone has to know that everyone else has seen it, too.

This may very well be why online ads have been largely ineffective at brand building. In the online world, everyone lives in his or her own little digi-world. I have no idea what my friends are doing online and what ads they may be seeing. Even if they watch the same YouTube videos as me, I don't know what ads they are being served.

In mass media, I know what my friends are seeing. I know that if they’re watching football they’re seeing the same ads I am. Consequently I have reasonable confidence that my friends believe that Nike makes acceptable running shoes, Ford makes acceptable pick-up trucks, and Coors makes beer I don’t have to feel weird about.

But I have no idea what my friends are seeing online. Even if they go to the same sites I do, I have no idea what ads they are seeing. Consequently, I have no frame of reference for “cultural imprinting.” I don’t know if they will think me an idiot for buying these headphones I saw on Whatever-dot-com.

In a nutshell, this may very well be why thus far mass-market advertising is demonstrably more effective at brand building than precision targeted, highly individualized advertising.

Highly individualized, personalized advertising -- the obsession of online advertisers -- makes advertising a private, rather than public, experience. It keeps us from knowing what advertising our friends are seeing. Which in some way keeps us from knowing what brands may be culturally acceptable.

For years I’ve known that online advertising has been mysteriously ineffective at brand building and now I think I finally understand why. By the way, Kevin Simler, the person who connected the dots for me, isn’t a marketing or advertising person — he’s a tech guy. But I believe he understands marketing better than most of the so-called professionals.

If he's right, the current obsession of advertisers to make their advertising perfectly individualized and perfectly personalized may be perfectly wrong.

(There is probably not a singular reason for the phenomenon of online advertising not having built major consumer-facing brands. But if you combine Simler's "cultural imprinting" hypothesis with the "signaling" hypothesis, I think you have a pretty good explanation.)