If We Agree Advertising is Broken

Rufus – I like you, buddy. Relax. Thanks for engaging this morning.

@bill I like you too and am glad you replied back ;-) Thanks for an interesting morning. This probably means I have to get some real work done now. Ah, well… but, you did duck my questions. Wonder what that says about your personal brand…..

@Chrisbrogan Thanks for letting @bill and me pee in your playground for free ;-)

@Chrisbrogan Thanks for letting @bill and me pee in your playground for free ;-)

@Rufus – if you volunteer, you can edit allllll you want. : )

@Jeff – I’d argue that a major part of the success of Amazon is the brand they’ve built over that last several years. They own “Online Retailer” in the minds of millions of consumers worldwide.

And just to stir the pot a little, Direct Mail is totally measurable and yet we’re happy with 1-3% response rates in the DM sphere, is that really a huge success?

@Jeff – I’d argue that a major part of the success of Amazon is the brand they’ve built over that last several years. They own “Online Retailer” in the minds of millions of consumers worldwide.

And just to stir the pot a little, Direct Mail is totally measurable and yet we’re happy with 1-3% response rates in the DM sphere, is that really a huge success?

@Tony – I’d agree with your argument but point out that the EXPERIENCE of being an Amazon customer (not what shoppers think or feel about them based on commercial spots or visuals or promises) is what creates that successful brand you reference.

I’d say we’re relatively happy with that 1-3% yes. As compared to the bogus “brand equity” calculations that I’ve read over the years we’re thrilled. CMO’s are on the hot seat. CEO’s don’t buy nebulous “brand equity” math — never have. CMO Council: 10% of CMO’s are regarded as “highly influential” or “strategic” by their CEOs. I’d call that a crisis of confidence driven by mass communications practices being ported over to an interactive realm (the Web).

I’ll stir more: You’ve pointed at a metric that can be measured in tangible actions, behaviors. “Brand advertising” is largely hockus pokus math, IMHO :), that typically results in eye rolling by CEO’s.

@Rufus. Very good points. Print and TV is not dead. For example, this week i had meetings decision makers at two of the top 10 largest advertisers. When presenting to them the concept of connecting with consumers in a new way through the largest in-air TV network, with the largest airline. THEY LOVED IT.
Even so, they still said their marketing mix model says that general market TV’s pay out is the greatest
For an ad agency and media agency to reco tv is very inexpensive and profitable.
Clients look to the agency for their reco because they are the experts.
If the agency reco tv (which is in their financial best interest) the client will most likely take it.
Around and around it goes. When it comes to new initiatives like social media, blogs,etc to get funded, they are at the bottom of the barrel. If they do get funded…it is with crumbs so that they can throw up a power point slide at a conference showing how “on the cutting edge they are”. Forgetting to mention that they spend 10x that amount in a day through general market traditional advertising.

So where is advertising going? It’s still with the heart base of society which the majority still reads print and watches TV.

@Rufus. Very good points. Print and TV is not dead. For example, this week i had meetings decision makers at two of the top 10 largest advertisers. When presenting to them the concept of connecting with consumers in a new way through the largest in-air TV network, with the largest airline. THEY LOVED IT.
Even so, they still said their marketing mix model says that general market TV’s pay out is the greatest
For an ad agency and media agency to reco tv is very inexpensive and profitable.
Clients look to the agency for their reco because they are the experts.
If the agency reco tv (which is in their financial best interest) the client will most likely take it.
Around and around it goes. When it comes to new initiatives like social media, blogs,etc to get funded, they are at the bottom of the barrel. If they do get funded…it is with crumbs so that they can throw up a power point slide at a conference showing how “on the cutting edge they are”. Forgetting to mention that they spend 10x that amount in a day through general market traditional advertising.

So where is advertising going? It’s still with the heart base of society which the majority still reads print and watches TV.

Quote the Joker in The Dark Knight (more of a paraphrase) “If you are good at something, never do it for free.” I only do two things for free that I am good at and one of them is writing my own blog. I’ll leave you to guess at the other one, but I suspect you probably already have the answer. ;-) Have a happy, “free-filled” weekend.

@Jeff – I don’t disagree that most CEOs are number focused. They want something that is measurable, understandably, because they’re accountable to their board and in most cases investors. I also think you’re dead on with the experience of being a customer has a lot to do with successful branding, you can have the best communications out there but if your actual business stinks the stink will permeate the marketing.
However, I think where we’re going to see the real practical application of social media in the world of marketing is that it’s going to start letting us measure the otherwise nebulous metric of “brand equity” with considerable more accuracy than we have now. (I’m thinking focus groups and surveys here.) I’m not sure how at this point (that’s the million dollar question, isn’t it?), but I think it’s on it’s way.
I agree that companies are ultimately going to ask for more tangible numbers to judge a campaign successful, and I think we’re going to see not only traditional advertising shift because consumers are demanding it, but also the statistics we use to track such things evolve to meet that demand. I simply can’t believe that Keyword advertising and the like, totally measurable by the old metrics, will rule in the days to come, but then hey I have a lot to loose if they do :-)

@Jeff – I don’t disagree that most CEOs are number focused. They want something that is measurable, understandably, because they’re accountable to their board and in most cases investors. I also think you’re dead on with the experience of being a customer has a lot to do with successful branding, you can have the best communications out there but if your actual business stinks the stink will permeate the marketing.
However, I think where we’re going to see the real practical application of social media in the world of marketing is that it’s going to start letting us measure the otherwise nebulous metric of “brand equity” with considerable more accuracy than we have now. (I’m thinking focus groups and surveys here.) I’m not sure how at this point (that’s the million dollar question, isn’t it?), but I think it’s on it’s way.
I agree that companies are ultimately going to ask for more tangible numbers to judge a campaign successful, and I think we’re going to see not only traditional advertising shift because consumers are demanding it, but also the statistics we use to track such things evolve to meet that demand. I simply can’t believe that Keyword advertising and the like, totally measurable by the old metrics, will rule in the days to come, but then hey I have a lot to loose if they do :-)

@ Tony – Well, since you baited me like that :-)

I simply don’t see how “branding” can be measured by search. Here’s the root of what I’m driving at here: Google gave us the ability to pair up ads with searchers’ intent (a la Battelle)… and the best thing “brand advertisers” can do is get all excited about pairing up impressions of ads? Perhaps you’ll agree — it’s much more exciting to take a users’ intent, call them to action, provide the opportunity for them to act (download something, fill out a form, buy something, etc.) and then, worst case, place them in a behavior-based sales funnel — a marketing regimen.

Just “being there” and hoping for the best or inventing crazy science/math around how these ads result in actions is just a waste of the BIGGER opportunity. We’re already seeing the results. The display slow-down isn’t about lack of budget so much as it’s about, IMHO, the realization that “buying eyeballs” is pointless and relatively worthless as compared to direct response — which is what a 2 way medium is built for.

@Brian Martin I love the airline tray table concept because it is not intrusive. Anyone who has been caught on an airplane sober without anything to read will either read ANYTHING, including the napkins or engage in conversation with whomever is sitting next to them… sometimes not entirely welcome ;-)

Crumbs is more like it. The serious guys pay for print, pay for LCD screens, pay for video editing. Case in point about the social media position in the WSJ today. http://online.wsj.com/article/SB123309277668321299.html

@Brian Martin I love the airline tray table concept because it is not intrusive. Anyone who has been caught on an airplane sober without anything to read will either read ANYTHING, including the napkins or engage in conversation with whomever is sitting next to them… sometimes not entirely welcome ;-)

Crumbs is more like it. The serious guys pay for print, pay for LCD screens, pay for video editing. Case in point about the social media position in the WSJ today. http://online.wsj.com/article/SB123309277668321299.html

@Jeff – I think if we define a successful brand as one that “a corporate image that leaves a positive impression and spurs conversation that ultimately leads to sales” parts of it can be very measurable via search. We can measure the level of chatter about our brand as a whole, measure positive and negative mentions and follow the network of conversations happening in blogs and on services like twitter, etc. This means companies would have to actually interact with their customers on some level to find out if any of this buzz lead to a sale, something I think a lot of them still aren’t doing. I would argue that we just don’t care about these numbers for the most part right now, which is why we don’t have a more efficient way to tie them to sales.
That being said, I agree with you 100% that we’re going to see a shift away from display advertising online to more direct response methods, it just doesn’t work. But for a lot of products, esp. those in highly competitive markets (i.e. beer, soda, most consumer goods) where brand is the key selling point I can’t see investments in the brand via advertising going anywhere (except maybe away from the top of web pages, that would be awesome) esp. in traditional media, but even online in the form of branded content and personalities.

@ Tony. Precisely. This is why we have divergent opinions. My definition cannot conform to yours. In my world, banding itself is (starting in 2008-9) being re-defined as the real-time aggregation of everything marketers and their customers do together. That’s different than the old school definition focusing on awareness and influencing how customers feel about a marketer.

“a corporate image that leaves a positive impression and spurs conversation that ultimately leads to sales”

I don’t want to measure part of branding — I want to measure all of it. Right? Branding, by my definition, is 100% measurable and fully accountable. Respectfully the definition you offer — at its core — “hopes.” It’s been at the core of mass communications for decades and is what I believe is threatened.

Further, I care less about conversation now… in this recession. I (Mr. advertiser) care about creating customer/prospect behaviors. These behaviors are part of a “chronology of purchase intent.” I recognize that nothing is instant — as you wisely point out. I simply reject the notion that there is strong value in:

“measuring the level of chatter about our brand as a whole, measure positive and negative mentions and follow the network of conversations happening in blogs and on services like twitter, etc.”

… as compared to the value in measuring what people DO. Not how they feel or their tone. I can measure that *directly* in monitoring their behavior. Here, there is no guesswork.

This means companies would have to actually interact with their customers on some level to find out if any of this buzz lead to a sale, something I think a lot of them still aren’t doing. I would argue that we just don’t care about these numbers for the most part right now, which is why we don’t have a more efficient way to tie them to sales.

We DON’T care about tracking to the point of SALES??!! You are really baiting me here, Tony. What’s up your sleeve? :) I am forced to agree — we don’t care. “We” are “brand advertisers” who believe this is more art and less science. “We” aren’t going to get paid as much moving forward for creating intentions, desires or perceived need. We’re going to get paid for actions — that ultimately lead to sales, yes.

You didn’t mention it but it relates: I respectfully don’t buy this “we’re not in control” bunk nor the inherent value of conversation monitoring — when there is not follow through on engaging AND (here is the big one) ADAPTING to build systems around that engagement — systems that monitor, facilitate targeted engagement and drive ultimate behavior.

Sure that’s a really, really advanced “want” on my part but ultimately I’m breaking with you over the fundamental definition of brand (you: creating consideration and hoping for sales — me: brand as “pure” experience-based, trackable behavior).

@ Tony. Precisely. This is why we have divergent opinions. My definition cannot conform to yours. In my world, banding itself is (starting in 2008-9) being re-defined as the real-time aggregation of everything marketers and their customers do together. That’s different than the old school definition focusing on awareness and influencing how customers feel about a marketer.

“a corporate image that leaves a positive impression and spurs conversation that ultimately leads to sales”

I don’t want to measure part of branding — I want to measure all of it. Right? Branding, by my definition, is 100% measurable and fully accountable. Respectfully the definition you offer — at its core — “hopes.” It’s been at the core of mass communications for decades and is what I believe is threatened.

Further, I care less about conversation now… in this recession. I (Mr. advertiser) care about creating customer/prospect behaviors. These behaviors are part of a “chronology of purchase intent.” I recognize that nothing is instant — as you wisely point out. I simply reject the notion that there is strong value in:

“measuring the level of chatter about our brand as a whole, measure positive and negative mentions and follow the network of conversations happening in blogs and on services like twitter, etc.”

… as compared to the value in measuring what people DO. Not how they feel or their tone. I can measure that *directly* in monitoring their behavior. Here, there is no guesswork.

This means companies would have to actually interact with their customers on some level to find out if any of this buzz lead to a sale, something I think a lot of them still aren’t doing. I would argue that we just don’t care about these numbers for the most part right now, which is why we don’t have a more efficient way to tie them to sales.

We DON’T care about tracking to the point of SALES??!! You are really baiting me here, Tony. What’s up your sleeve? :) I am forced to agree — we don’t care. “We” are “brand advertisers” who believe this is more art and less science. “We” aren’t going to get paid as much moving forward for creating intentions, desires or perceived need. We’re going to get paid for actions — that ultimately lead to sales, yes.

You didn’t mention it but it relates: I respectfully don’t buy this “we’re not in control” bunk nor the inherent value of conversation monitoring — when there is not follow through on engaging AND (here is the big one) ADAPTING to build systems around that engagement — systems that monitor, facilitate targeted engagement and drive ultimate behavior.

Sure that’s a really, really advanced “want” on my part but ultimately I’m breaking with you over the fundamental definition of brand (you: creating consideration and hoping for sales — me: brand as “pure” experience-based, trackable behavior).

@Jeff – I like your definition, I think it’s more concise than the way I put it. “everything marketers and their customers do together” is exactly what I was thinking when I said “a corporate image”. I’m definitely remembering that one for later :-)

I think you nailed it when it comes to the tipping point of our differing views. “‘We’ are ‘brand advertisers’ who believe this is more art and less science.” I have to say that while I respect the numbers, and do believe they paint a very accurate picture of what’s going on, I don’t think it’s a complete picture. I think that people make decisions based on brands and the messages those brands send them (even when they don’t make a lot of sense like the weird Bill Gates Seinfeld ads we saw last year). And just because brand equity doesn’t easily translate into dollars doesn’t mean its immeasurable or that it’s not impacting ROI of other marketing tactics. Here I would suggest that spending a portion of an overall advertising budget on brand building will lead to increased response in direct marketing efforts, and I admit that moving forward brand building via advertising will be a smaller piece of the pie, esp as marketing budgets are cut in bad economic times. I am clearly of the “Lovemarks” philosophy :-)
As far as “We are not in control” I think that’s a bit of an overstatement (obviously I do buy into the conversation monitoring camp). I think it’s more accurate that “We are not in complete control” because with a good internal policy (the air force is the best example I can think of, but I can’t find the link, but it’s out there) we can steer the chatter on the net in a direction that’s closer to where we want it. I agree that monitoring has no real value if you’re not willing to engage.

Great conversation, totally making my Friday fly :-)

What’s next is scalable intimacy, Chris.

Modern marketing came about in an industrial age, when economic value was realized in economies of scale. If you could make a nickel on a cupie doll, you could make $100,000 on a million identical cupie dolls, as manufacturing technology drove your unit cost of production and distribution downward. The key to realizing this compelling alchemy was to get a million people to want the same thing, and modern advertising was born.

Fifty years on, the world has changed. Economic value is no longer locked in the factors of production, which have been commoditized by globalization and the relentless progress of industrial age technology. Today economic value is locked up in relationships. Share-of-market matters less than share-of-customer, because acquiring customers costs so much more than making just about anything.

While that system is coming apart, we’re seeing what really amounts to a return to the one-to-one economies of the past. Individual attention and service. Persistent reputation. Knowing your customers, as people rather than as “Consumers,” the quintessential 20th century word.

We need to get intimate again, but now we need to technology to do it at scale. That’s where all this social media stuff will lead, I think. Hope we get to see together.

What’s next is scalable intimacy, Chris.

Modern marketing came about in an industrial age, when economic value was realized in economies of scale. If you could make a nickel on a cupie doll, you could make $100,000 on a million identical cupie dolls, as manufacturing technology drove your unit cost of production and distribution downward. The key to realizing this compelling alchemy was to get a million people to want the same thing, and modern advertising was born.

Fifty years on, the world has changed. Economic value is no longer locked in the factors of production, which have been commoditized by globalization and the relentless progress of industrial age technology. Today economic value is locked up in relationships. Share-of-market matters less than share-of-customer, because acquiring customers costs so much more than making just about anything.

While that system is coming apart, we’re seeing what really amounts to a return to the one-to-one economies of the past. Individual attention and service. Persistent reputation. Knowing your customers, as people rather than as “Consumers,” the quintessential 20th century word.

We need to get intimate again, but now we need to technology to do it at scale. That’s where all this social media stuff will lead, I think. Hope we get to see together.

Advertising has always been “broke,” with some working and lots not. There is a wonderful story from the 1930′a about an advertising guru announcing to a client that 1/2 of his … Read Moreadvertising wasn’t working. The client was delighted and asked, “can we cut the ineffective ads?” “No,” the guru said, “I can’t tell which half it is.” Today, marketing continues to be as much art as it is science. Many elements contribute to marketing/advertising success. The internet and the growth of Social Networking are adding a new dimension. For the short term, we will do what we did and explore new things to do and new ways to connect. What’s interesting is what advertisers are planning for 2009. The market research firm, Datran, has some answers. Go to:http://tinyurl.com/c9nzzk. Key to improved advertising performance, now, as ever, ask the customer.

Dell’s Digital Nomads thing was done through the Floor64 Insight Community. Floor64 also runs the Techdirt blog (disclaimer: I’m a contributor), and one of the running themes there is the idea that advertising is content and content is advertising.

We’ve all seen the by now classic video, “What if modern marketers created the stop sign?” (http://is.gd/htbF — worth it if you’ve missed it), which purports to be tongue-in-cheek but probably is dead on. The problem with oversegmenting, overthinking, oversponsoring and overselling our space is that we lose sight of what made the advertising inviting in the first place: its association with content that we find important, trustworthy, or pleasurable. Many people are making fine careers out of predicting where our eyeballs will land, or which messages will make which segment of a population stay or click through — but ultimately it’s about likeability and trust.

I trust the New York Times because I trust their standards; and they do some things better than anyone on the planet. There are some things that Twitter does better, for that matter. I trust Chris Brogan because for him, it’s not about the followers — it’s about the thinking. While I agree that we all need to find ways for the Chris Brogans, the New York Timeses, and the Twitters of the world to evolve and thrive financially, is it really content marketing? I won’t trust Chris less when he does pay for play; but I will trust his opinion less on whatever he’s reviewing… and that’s the point. There has to be some middle ground.

I echo Steve (and his parallels with Facebook and its Beacon debacle) — that advertising and the Internet isn’t broken so much as it’s not working… yet.