2014's Most Popular Post

Continuing our blessed vacation from blogging, today is the last post of 2014. It was the most popular post (by viewership) of the past year. It was a two part post entitled "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.

Part 2

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.

Why You Need A Strategy

Here at Ad Contrarian Global Headquarters, we're in our final week of year-end reruns. Today we reach back to September for this oldie about ad strategy. Next week we return, 5 pounds heavier, with new things to whine about.


In the 1950's, the western powers devised a strategy to deal with the threat they perceived from the communist world. The strategy was called "containment."

In dumb-ass blogger terms, containment was essentially this: we'll let the communist block exist but we won't let it grow through military means.

This strategy informed the decisions western powers made and gave them a basis for deciding what to do and what not to do.

The strategy had its tactical successes (Cuban Missile Crisis) and its tactical failures (Vietnam War), but in the end it succeeded in accomplishing its two primary goals: avoiding nuclear war, and staunching the spread of communism.

Today the western powers also perceive a threat. The threat is from jihadist extremists. The difference today is that the west has no strategy. Every challenge is dealt with ad hoc. There is no unifying principle that gives rise to a strategy. The result is that just 8 weeks ago we were contemplating arming the Syrian rebels, and today we are bombing them.

Because we have no strategy, we are not clear on what our objectives are or what we are trying to do; we have not defined who our friends are and who our enemies are, and the result is a confused policy with too many failures and no definition of success.

Don't worry, this post is not about politics. It's about marketing.

An analogy can be drawn to most marketing. One of the disheartening effects of the proliferation of media options has been the ascent of tactics and the decline of strategy.

Far too many brands are buying into the nonsense of "360° marketing" which is code for trying to be everywhere. 360˚ marketing is not a strategy. It is absence of a strategy. As David Ogilvy said, "The essence of strategy is sacrifice."

There are two inevitable consequences of this folly.

First, nobody has enough money to be everywhere. The result of trying to be everywhere is that you spread yourself so thin that you are not very effective anywhere.

Second is that the tactical drives out the strategic. Each media type is assigned its own objective. And as each media type is optimized for that objective, it gets a little farther from what's going on in every other medium. Like our stellar universe, the brand universe keeps expanding. Each initiative moves farther away from every other one.

There is only one way to avoid this. Have a simple strategy, be clear on what it is, and make sure everything you are doing conforms to this strategy.

And remember, it is better to do three things well than thirty things half-assed.

Whatever You Do, Don't Be Yourself

Continuing our delicious vacation from blogging, today we re-print a post from this summer in which we offered essential advice to the up-and-coming ad professional.

If you want to be successful in the ad business, one of the first things you have to learn is to ignore all the baloney about "being yourself."

As a matter of fact, at all costs, do not be yourself.

Being yourself is a one-way ticket to Starbucksville.

I don't know who you are, or what "yourself" is like, but I guarantee you, "yourself" will be a big flop in the agency world.

In the agency world, you are expected to talk like this:

"(White Castle) is a beloved challenger brand... They seek an agency partner to align with their idea-rich, entrepreneurial culture and evolve the brand’s cultural relevance, especially among the millennial target."

See what I mean? That's an actual quote from an agency consultant. I don't care how full of shit yourself is, yourself can't be that full of shit.

Yourself might have said,

"White Castle is a bottom-feeding purveyor of unspeakable crap that just got a new CMO who wants an agency that will kiss his ass."

I'm afraid that just wouldn't sit well with the new masters of marketing.

That's why, to be successful in the agency business, you have to be very careful not to be yourself.

Here are some simple rules to follow to keep from being yourself:

Do not speak in simple declarative sentences

Do not ever express doubts about anything

Do not tell your colleagues what pathetic kiss-asses they are

Do not ever disagree with the highest ranking person in the room

When a client says the stupidest fucking thing you've ever heard, smile and nod

Remember, every sentence you speak or write must contain the word "brand" or "engagement"

I'm afraid that being yourself simply will not align with this idea-rich entrepreneurial culture or evolve your cultural relevance. So take my advice, amigo. Be the other guy.

Okay, now get out there and knock 'em dead.