Advertising works… kind of.

I was tickled by Paul Ashby’s forum thread on Brand Republic, stating that advertising works. If by “works” you mean wasting huge amounts of marketing budget and duping the customer into believing it is effective with ever having produced data to support the fact.

So why do firms still spend millions on advertising? I was party to a nugget of insight this week on a client trip to Paris. There’s not much to do on the Eurostar for two and a half hours, so the client was happy to chat about their recent marketing activities. It turns out that they’d just spent $800,000 on an airport advertising campaign. And the manager knew he’d get no tangible return on his spend.

Why would a sane person do this?

Here’s the reason. This firm, a large US-based technology firm, wants to increase its profile in Europe. Standard practice in these cases is for corporate HQ to dictate how and where European “satellite” operations spend their marketing budgets. Sometimes this centralized command-and-control process manages budget to the dollar.

So when corporate marketing offers $800,000 as long as it’s spent on marketing, what is a European marketing VP to do? Especially when they know that advertising will make little impact on sales.

This smart VP decides to advertise not where prospects might see the advert (because they’d tune it out anyway) but where his company colleagues and senior management would see it. If you work for a firm, then you tune in to its adverts, rather than tune them out (like prospects would).

The marketing VP then gets plaudits from his senior management for the high visibility. “You’re doing a great job – we saw the adverts in the airport.” This raised kudos allows the VP to attract more support for marketing and, importantly, more budget to do the things that he knows will actually affect sales.

So this VP is not insane after all – in fact he’s playing the game skilfully. But why do other people assume that advertising works? Perceived wisdom is defying hard facts – nobody can establish a link between advertising and sales. Is it the case that marketing is insane because everyone else is? And are marketers the only sane people around, but bound by the prevalent insanity to do daft things, like spend $800,000 on airport advertising?

Time to try something new

Seth blogs on why firms refuse to change, when it would actually be the best thing for them. Business as usual seems the safe thing to do.

My pet topic, The Insanity of Marketing, refers to the unwillingness of marketers to change while trying to achieve different results. But what if the game changes? Doesn’t this mean that marketers have to change anyway?

One of my clients told me that their PR budgets have been cut by one third. Ouch! Irrespective of the initial size of the budget (big, since you ask), one third is a big chunk. And yet, my client is expected to deliver the same service as before.

It’s madness. Insane. If your budget gets cut by one third, don’t even try to do what you did before. It’s time to try something new.

PR votes to carry on lying

I’ve recently been writing and blogging on the Insanity of Marketing. But can there be a more insane branch of marketing than PR?

Martin Moore’s blog directs us to a debate held at Westminster University, the motion of which was that “PR has a duty to tell the truth.” I don’t know whether to laugh at the fact that the motion was defeated, or at the fact they had to debate the issue at all. Can anyone suggest another profession that would hold such a debate?

The majority view amongst PR is that their duty of care is towards their clients, and that this sometimes (often?) conflicts with the truth. In these cases, it seems permissible to lie.

The trouble I have with this admission is not that PR has to wrestle with conflicts of interest and ethics. It is that, once you know a PR firm lies, how can you ever tell if it’s telling the truth? And if the majority of the industry admits to the practice, doesn’t this undermine the whole industry?

As it happens, I know many PR professionals, and professional they are. I’m sure they’ll be dismayed by the results of the vote, and hopefully of the debate itself.

I think that PR has shot itself in the foot. It could do with appointing a PR firm to limit the damage, lie a little, and put PR in a positive spin.

More marketing madness

On my occasional “Insanity of Marketing” theme, spot the non sequeter in these two sentences:

- “On aggregate, (marketing) agencies score a dismal Net Promoter rating of -21%.”
- “Agencies still wield a great degree of influence in the marketing organization.”

According to a new Forrester report – Help Wanted: 21st Century Agency – in-house marketers are extremely unlikely to recommend their agency to a peer or colleague (as measured by NPS). This is due to agencies’ weaknesses in emerging digital channels, over-estimation of their own importance, and lack of accountability in their performance.

A jaw-dropping 76% of marketers do not measure the ROI of their lead agency. 69% think ROI is too hard to measure.

Why is this situation allowed to continue? If we were talking about IT the CIO would have been fired and the CFO installed as overseer of spend. Indeed this was the case in the 1999-2002 period.

Sadly, says Forrester, “Although marketers claim they are unwilling to recommend agency services, few alternatives exist. Marketers need as much help as they can get to reach customers who increasingly tune out marketing communications.”

In other words, marketers know they are being screwed by agencies, yet feel powerless to do anything about it. Is marketing insane, or just deeply depressed?

Forrester points to “left brain” tactics to implement marketing metrics as part of the solution. I suspect this is only half the story – once metrics are used we’ll find out that much of traditional marketing is considerably less effective than agencies have us believe.

It’s official – advertising doesn’t work

It’s official – advertising doesn’t work, and marketers are insane.

On BBC Radio 4’s PM programme on Monday 5th February, Eddie Mair interviews Fiona Dawson, Managing Director of Masterfoods UK, on its move to stop advertising targeted at under 12’s. Masterfoods makes Mars bars and other sweeties.

In explaining the impact of the decision on Masterfoods’ market, Ms Dawson states that, “There is very little evidence to show that advertising has any effect, despite the amount of money that we spend on it, in term of driving purchasing behaviour.”

You can almost hear Eddie Mair’s jaw hits the table. “You don’t think that advertising affects buying behaviour?!” he asks.

“Well, there’s very little evidence to show it…” repeats Ms Dawson, adding, “We still spend quite a considerable amount…”

Indeed they do. Advertising Age estimates MasterFoods’ global advertising expenditure of $939m in 2005, on annual sales estimated at $18bn. That’s roughly 5% of sales, with no evidence to support its effectiveness.

I recorded my thoughts on this type of insanity in a white paper recently. MasterFoods is another example of marketers doing what they have always done, despite any measurement of its effectiveness.