April 23, 2014

An Expensive Lesson In Web Strategy

Here at The Ad Contrarian World Headquarters we are well-known for believing that it is much more fun to identify problems than to offer solutions.

As a matter of fact, offering solutions is how we make money and the idea of giving them away free on a blog is just plain anathema to us.

Nonetheless, there are moments when we feel unaccountably generous and give million dollar advice away for nothing. Today is such a day.

The case in point is our strategy for online advertising. (I don't have the patience to explain it again, so click the link.)

As regular readers know, we have long advocated the idea that the web is good for fulfilling demand, but not for creating demand.

In short, the web is a lousy version of television, but a terrific version of the Yellow Pages.

Our advice is to forget most of the baloney about social media, content, banners and whatever else is flavor of the week, and advertise on the web where people go who are actively looking for something.

Of course, this advice has been widely ignored by the demented doofuses in the marketing and advertising industry who want you to believe that people have nothing better to do than have conversations about your brand on line. (And, oh yeah, maybe there's a buck or two in it for them if you buy this bullshit.)

Well, someone seems to have learned an expensive lesson.

According to Bloomberg, Priceline's ceo Darren Huston, says that Facebook and Twitter have failed to deliver results. I'm shocked...shocked I tell you.

Priceline's online spending last year was an astounding $1.8 billion. But according to Huston...
“For Facebook and Twitter, we have endless amounts of money. But we haven’t found anything there....But Google has been a great thing.”
In fact, Priceline's cost of marketing increased 41% last year while their business grew 29%. It looks like it's back to Google for them.

People who understand the "creating demand vs fulfilling demand" strategy would know in about 2 seconds that Facebook and Twitter would not be as effective for Priceline as Google.

Using the web for creating demand is dumb. Using it for fulfilling demand is smart. You owe me a million dollars.

April 21, 2014

The Lifetime Value Of Stupidity

One of my all-time favorite dumb-guy marketing ideas is "lifetime value."

It is the fantasy that if you get a customer at a young age she'll stick with you for life. This nonsense is particularly popular in the automotive industry, where I misspent a lot of my agency career.

My conversations about lifetime value usually went something like this:
BOB: Why are we spending so much of our advertising budget against 18-34 year-olds when they have no money and no interest in buying cars?

STUPID-ASS MARKETING GUY: Because we have to think about the future. We need young people in our brand. If we get them now, we'll have them for a long time.
BOB: But doesn't it make more sense to try to sell our car to people who are actually interested in buying a car now than to people who might buy a car in fifteen years?

Old people are dying out, and we need to get youth into our brand or we'll die, too.
BOB: (Foolishly trying to insert logic into the conversation) First of all, old people aren't dying out. Adults over fifty are growing at almost three times the rate of adults under 50. It's young people who are evaporating, not old ones. But more important, 88% of cars are sold to people over 35. The math just doesn't work.

STUPID-ASS MARKETING GUY: (Snickering on the inside) Why don't you just stick to writing the ads and leave the math to me?

BOB: Because you're a fucking moron (no, I didn't really say that...I'd say something like)... "let me show you the numbers..."

Only 12% of cars are sold to people between the ages of 18 and 34.  Let's say we are the most brilliant marketers in history and we can get a 50 share among these people. And then let's say that we make the most irresistible car in history and fifteen years from now 50% of these people will still buy our brand. And let's say that these people miraculously become the most eager new car buyers in history and they buy a new car every 2 years. That means fifteen years from now we will have 1.5% share of market from them.

In the meantime, we will have ignored 88% of the fucking people who actually bought a fucking car every fucking year for fifteen fucking years. Does this sound like good fucking business strategy to you, you fucking moron...(once again, the "fucking" part was often more a thought than an actual verbalization. Often, but not always.)

STUPID-ASS MARKETING GUY: (Snickering on the inside, the outside, the right side, and the left side) Why don't you just stick to writing the ads and leave the marketing decisions to me?
That, my friends, is the value of stupidity. And it lasts a lifetime.

April 17, 2014

The Power Of Sloppy

Have you ever wondered how McDonald's and Coca-Cola and Nike and Toyota and Apple and all the other enormous worldwide brands became successful?

For one thing, they were sloppy. They had to be.

They didn't have big data or precision targeting. They couldn't punch a key and immediately identify left-handed Lutheran dry cleaners who rode recumbent bicycles.

So they had to use mass media and talk to everyone. Not only did they not suffer for it, they prospered from it.

Mass market advertising is the most powerful media tool ever invented for the building of brands. In fact, despite the blather of contemporary marketing pundits, it remains so today.

If you walk through your local supermarket, you'll find that these mass advertised brands are the brands you'll find on the shelves. No "Facebook" brands. No "Twitter" brands. No "banner" brands.

Is there a lesson here? There is an enormous lesson staring us right in the face.

It is this: precision targeting may be an effective strategy for direct marketers and niche brands, but if you want to build or grow a big brand, mass advertising is by far your best media strategy.

Of course, some degree of targeting is essential. You don't want to try to sell golf balls to tennis players or run beer spots on "Oprah."

But there is a point you reach very quickly at which slicing and dicing the population into finer and finer fractions becomes counter-productive. Your assumptions become less accurate, your reach becomes less fruitful, and your focus becomes too parochial.

When you target too explicitly, you lose the value of unintended consequences. You lose the power of the unknown. Who would have guessed that 88% of "youth cars" would be sold to people over 35?

The simple fact is that marketers are not as good at predicting the ultimate make-up of their customer mix as they think they are. And the best way to mitigate against this is to be a little sloppy and tell your story to as many people as you can.

If you want to be a niche brand, do niche advertising. If you want to grow a big brand, you need to do mass market advertising.

You need to harness the power of sloppy.