As we rapidly approach the Super Bowl, I’ve been doing quite a bit of thinking about the vast sums spent every year on advertising. Godaddy.com, Budweiser,Â Miller,Â GM (and virtually everyone else in the auto industry), Doritos, Coke, Pepsi . . . You name ’em – They’ll be shelling out the cash just like they always do. You’ll have your random celebrity cameos – plenty of action-packed movie previews – countless bikinis – and, of course, endless hints that what you really need are giant cheese-filled sausage roles to go along with your extra large Dominos pizza . . . Hell, the NFL even advertises itself! (Wait – did I forget energy drinks???)
With that in mind, I happened to come across a particularlyÂ artful and important article the other dayÂ penned by the respected South African public affairsÂ and strategic planning expert Chris Moerdyk.Â Mr. Moerdyk’s extremely informative website, BizCommunity.com, covers virtually all aspectsÂ of international public relations, ranging from rapidly changing fields like tech-based nano-targeting to traditional TV and print advertising. Moreover, he has assembled a seriously impressive group of contributors. I’ll most certainly be adding this website to my personal list ofÂ “go-to”Â Internet destinations.
TheÂ article inÂ question entitled, “The Ridiculous Cost of Advertising,” (the headline more or less speaks for itself . . .) addresses and explains a number of issues regarding advertising ROI that I – and I’d imagine LOTS of other executives – regularly question, year after year,Â although very little seems toÂ actually change.Â Sure – There’s tons of ink spilled discussing trends like social mediaÂ and the value of better coordination betweenÂ marketing and compliance (especially inÂ theÂ financial sector), but the most visible, expensive and ubiquitous forms of communicationsÂ – print, radio and TV advertising – have retainedÂ almost the same level of preeminenceÂ they possessed back during the days ofÂ “Mad Men.”
The problem, of course, is that whileÂ these various types ofÂ paid media, at their best, have undoubtedly grownÂ moreÂ sophisticated,Â as Mr. Moerdyk notes,Â there are still few if anyÂ reliable metrics demonstratingÂ that theyÂ actually perform their intended functions:Â basic goals like improved brand loyalty,Â expanded market-share, reputational protection and increased profitability.Â Obviously, this isn’t true in everyÂ instanceÂ and surely some companies/industries do benefit more than others. But the real point is whether anything close to aÂ majorityÂ of targeted audiences areÂ evenÂ paying attention.Â According to Moerdyk, at least in the US (and probably elsewhere), the answer is overwhelmingly “NO.”
“Remarkably, the most fascinating conundrum about mass media advertising today comes from the United States where survey after survey has shown that 80% of TV viewers don’t watch commercial breaks anymore. Among those TV viewers who don’t watch TV commercial breaks are clients, ad agencies, ad managers, and media buyers. All of whom happily tell researchers that they don’t watch commercial breaks and then continue to pour massive amounts of money into precisely those commercial breaks they don’t watch. There is no logical assumption to make other than for ad agencies, traditional 30 sec TV commercials are still the best source of revenue. And for clients and marketers, TV commercials still provide the best way of bolstering corporate egos and making sure that the boss’s wife sees her husbands product on TV. If indeed the boss’s wife watches TV commercial breaks which she clearly doesn’t because she is part of that very 80%.”
The sad truth is that advertising has become somewhat analogous to the endless drive for appropriations that fuels ourÂ military-industrial complex – something so deeply engrained withinÂ each corporation’s culture (and continuously “pushed” by aggressive and highly profitable ad companies) that upper management and boards of directors end up seeing the world just like their Pentagon counterparts: “Of course we have to buy the next generation! We’ll find someone to kill with it eventuallyÂ . . .” Oh – and if that shiny new weapons system happens have a “minor flaw” (e.g., F-22 PILOTS PASSING OUT DURING PRACTICE FLIGHTSÂ DUE TO AÂ SUDDEN AND UNEXPLAINEDÂ DISAPPEARANCE OFÂ OXYGENÂ . . .), that doesn’t mean we should risk changing the process. After all, “We’ve always done it this way!” And let’s be honest here:Â whether it works or not, the F-22 does look undeniably awesome.
Where Moerdyk sees hope is that it’s about to become substantially more difficult both for advertisers and their customers to justifyÂ pointless expenditures. Why? BecauseÂ instead ofÂ being forced to rely on guesswork (“Wow! -Â We ran thatÂ Super Bowl ad for $3 millionÂ and our profits went up!Â We sure better order a series of follow-ups beforeÂ the competition beats us to itÂ . . .), new technologies are exponentially improving the ability to analyze: (1) Which ads are getting attention; (2) Who the audience ACTUALLY is; and (3) Not just how perceptions are being changed but, more significantly, whether they are being changed at all. Plus, all of this will increasingly be available in real time.
Moerdyk discusses precisely why these changes are so likely to create a legitimate revolution:
“Calculating return on investment on mass media advertising has always been something of a thumb-suck mainly because most often measurement tools have not been built in and far too many marketers have become obsessed with research that just shows whether consumers like their ads or not. They are also obsessed with focus groups, which have been proved time and again to be the worst possible way of trying to understand what consumers believe or want. Quite how liking an ad happens to translate into money in the bank is the stuff daydreams are made of . . . Fortunately for marketers, time and technology will bring some order out of the current chaos. Measurement will become easier and with measurement comes logical conclusions. “
I couldn’t agree more. Let’s hope that things end up moving even faster than Moerdyk suggests.Â Yes,Â gathering accurateÂ data will certainly help limit wasteÂ but there are already numerous steps companies can takeÂ toÂ improveÂ their marketingÂ strategies and tactics.
If you happen toÂ be a decision-making either within aÂ company’s communications department or work directly within the broad universe comprised ofÂ PR, public affairs, crisis managementÂ and advertising, the primary point I’d make is this: even the most entrenched practices ultimatelyÂ ALWAYS die out once they’re exposed to theÂ “creative destruction” of capitalism. That’s why the private sector probably has a better shot at changing its ways than the military. (Then again, it’s equally fascinating to meÂ that modern political campaigns are generally using infinitely more advanced network-creation/retention techniques than giant corporations . . .)
Start thinkingÂ carefullyÂ not just about what you spend and how much – but alsoÂ about already-existing, more cost-effective alternatives: e.g., earned media campaigns, event planning, mutually reinforcing online tactics andÂ the rapidly growing importance of mobile apps. And finally, take a long hard look at the chart up at the top of this post. Yes. Change is scary. But as far as I’m concerned, it’s a lot less scary than spending hard-earned moneyÂ (quite possibly) for NOTHING. While traditionalÂ advertising’s share of the market – and its role in our popular culture – remain enormous, in this case, change isn’t going to happen somewhere off in the future – This is the moment. It’s happening RIGHT NOW.