THE NEXT EVOLUTION OF MARKETING

CONNECT WITH YOUR CUSTOMERS BY MARKETING WITH MEANINGBy BOB GILBREATH

The McGraw-Hill Companies, Inc.

Copyright © 2010 Bridge Worldwide
All right reserved.
ISBN: 978-0-07-162536-4

Contents

Chapter One

WHY TRADITIONAL MARKETING IS MEANINGLESS AND WHY EVOLUTION IS ESSENTIAL

It’s Everywhere, and It’s Intrusive

Whether they’re on pumps at the gas station, on turnstiles at the football stadium, or on the flanks of sheep grazing along highways in the Netherlands, it will come as a surprise to no one to learn that today’s consumer is accosted by an average of 3,000 advertisements per day, at a cost to advertisers of more than $244 billion. In spite of our best efforts to achieve media saturation as a means of boosting sales—or, perhaps more accurately, because of those efforts—consumers have learned to ignore the majority of our marketing efforts at best, and at worst to hate them.

Think I’m exaggerating? The numbers don’t lie. A survey jointly conducted by AdWeek and advertising agency J. Walter Thompson in 2007 revealed that 84 percent of people believe, “Too many things are over-hyped now.” Another 72 percent admitted that they are “tired of people trying to … sell me stuff.” That’s not hard to imagine, given the efforts that some companies are making to infiltrate even our most sacred spaces with advertising. A company appropriately called Mangia Media sells ad space on pizza boxes, connecting with consumers, “In their hands. In their homes” (italics not mine). Another company is selling ad space on floating displays alongside lakes and ocean beaches. Ah, the beauty of the great outdoors, brought to you by the Principal Financial Group.

Some industries are going so far as to use what they consider “innovative” advertising to keep their businesses afloat. Take the airlines. Airlines that are in trouble are using their captive audiences to generate advertising revenue from brands such as Hewlett-Packard, Microsoft, and ING. At a time when the airlines are removing the free drinks and complimentary peanut packs from your tray table, they’re slapping ads onto it. And if the white space on the baggage compartment doors, napkins, and airsickness bags is already taken, you can now buy space outside the window. A new start-up called Ad-Air has bought or leased $10 million in real estate next to landing strips and will sell you space in one of its 30 airport slots for $100,000 per month. A real estate company in Dubai was the first taker, placing a two-football-field-sized ad that broke the Guinness World Record for banner size. Even the Transportation Security Administration is getting in on the game by advertising on its plastic security bins.

Another business that is in trouble, network television, not only is taking advantage of its captive audience to advertise products and services during (widening) commercial breaks, but is increasingly utilizing the unused physical space during programming with none other than pop-up ads. “Snipes” is the actual name for these graphics, which creep onto the screen and into your peripheral vision as you attempt to enjoy whatever show you are watching. Lewis Black perhaps best represented the general viewing public’s frustration with snipes in a three-minute rant during the Emmys in October 2007:

Your job is to tell stories; it’s not to tell us in the middle of the story what show is coming on next or which one is premiering two weeks from now! What do you want me to do, stop and get a pencil and write it down?

Perhaps because of the all-time low ratings it received, Fox took things a step further when it aired the 2007 World Series between the Rockies and the Red Sox. In its broadcast of Game Two, at the bottom of the seventh inning, at a time usually reserved for the American ritual of stretching and singing “Take Me Out to the Ballgame,” Fox announcer Joe Buck instead directed viewers to the giant high-definition screen on the DirecTV blimp for a special preview of the new season of 24.

The full blitz interruptive approach of traditional advertising is also catching on globally. BusinessWeek recently reported on the rise of 35-year-old entrepreneur Jason Jiang, a new advertising mogul in China who built a $6 billion company in five years by installing 190,000 advertising video screens in 90 cities. Like many people before him, Jiang discovered that there was money to be made by putting ad messages in front of a large, captive audience. Business is very good for Jiang, who is now worth $1.8 billion and counting, as global brands are vying for ad space on his network and bidding up the price in hopes of winning in the world’s hottest economy. “‘I am very hungry and ambitious,’ says Jiang, who wants to put screens everywhere. ‘I see a golden age for advertising.'” I suppose the 1 billion Chinese consumers should prepare for their 3 trillion ad impressions per day. Is this really the kind of cultural contribution we should be exporting?

It’s Irrelevant, and It’s Offensive

The problem isn’t just that we are spamming people in countless ways; hundreds of billions of dollars are wasted every year on marketing that either misses its target audience completely or, worse, delivers a useless message to someone who might otherwise be compelled to purchase. When a woman with cats is interrupted by a commercial for dog food, or when a man is forced to stare at a tampon billboard while sitting in traffic, that’s both a wasted buck and a wasted impression.

And it’s not just that our ads hit the wrong people; even the “right,” or targeted, consumers often find our ads irrelevant for reasons that have absolutely nothing to do with the quality of the creative output. One big reason for this is that interruption itself is irrelevant. When there’s an abrupt break in the continuity of a particular activity, we’re trained to look past the interruption and resume whatever it was we were doing, thinking, or watching before. A study conducted by Moshe Bar, director of the Visual Neurocognition Laboratory at Harvard Medical School, shows that when we force viewers to watch ads, we actually end up hurting our sales. According to Bar:

Cognitive psychology experiments have shown that when people have to ignore a stimulus on the way to achieving another goal, not only do they get annoyed, they end up really disliking the distraction. And this disliking is very specific to that stimulus. So, if I am interested in the latest Red Sox score, but am forced to watch a commercial for a new merlot first, chances are that I will develop an aversion to that very brand of merlot, which will create for the advertiser the opposite effect of what was intended.

Another reason that traditional ads have become irrelevant is that most of us are fairly set in our ways as far as our purchasing patterns are concerned. We are pretty much satisfied with the cars we’re driving, the deodorant we’re using, and the life insurance company we send checks to every month. Others may disagree with me, but I have found in my experience that no amount of one-sided selling and telling will break through a satisfied consumer’s hardened mind until and unless he himself has experienced, firsthand, a real reason to change banks, toilet tissue, or dog food. And even then, it often takes more than one disappointing situation to motivate a person to spend the time and energy (yes, even changing brands of dog food generally requires a little bit of contemplation) to make the switch.

Beyond irrelevance, it seems that many of the so-called advertising innovations that were created to cut through the clutter in the marketplace have backfired, succeeding only in offending the very people that the companies had hoped to win over with their Clio award–winning efforts. Sellers of winter clothes advertising on city snowplows and pharmaceutical companies emblazoning their taglines on the tissue paper covering doctors’ examination tables may seem harmless enough, but McDonald’s underwriting the cost of printing report cards for schools in exchange for the right to feature Happy Meal coupons on the covers? Not so much. More than 2,000 angry calls and protests from parents in Seminole County, Florida, brought the McDonald’s program to an abrupt halt, despite the $1,600 that the endeavor had added to an admittedly tight school budget.

In New York City, people protested an ad for the A&E network’s new show Paranormal State that used a hypersonic speaker to literally beam messages into the skulls of passersby on the corner of Prince and Mulberry Streets in Manhattan’s fashionable SoHo neighborhood. San Francisco residents complained about the cookie-scented strips featured in “Got Milk?” bus stop ads, alleging that the aroma could cause allergy or asthma attacks in the “scent sensitive.” The California Milk Processor Board pulled the ads after only one day. In January 2007, a guerrilla marketing campaign for Cartoon Network’s show Aqua Teen Hunger Force caused the city of Boston to declare a terror alert after police officers mistakenly identified small electronic devices (actually LITE-BRITE toys) found throughout the city as improvised explosive devices. Bostonians who were stuck in traffic for hours failed to appreciate the cleverness of the campaign. According to the Associated Press, parent company Turner Broadcasting paid a $2 million fine to the Massachusetts attorney general to settle potential civil or criminal charges. The CEO of Cartoon Network resigned shortly after the stunt. That’s what I call an ad backfiring.

The fact is, traditional broadcast advertising often succeeds in offending people, even when we marketers don’t really mean to. Every race, sex, religion, and sexual orientation has felt the sting of bad jokes and stereotyping through advertising, and now it seems as if every cause has its own special-interest group, ready to leap to the defense when advertising treads on its sacred ground. When I worked on the Tide brand at P&G, we created a print ad for our new tablet product that proclaimed: “The Best Tablets Since Moses Returned from Mount Sinai.” It was a classic reference that we assumed would make anyone smile. But we were wrong; 10 people called to complain about the inappropriate religious reference, and we felt compelled to pull the ad. When GM showed a dreaming robot leaping to its death during a 2006 Super Bowl spot, the American Foundation for Suicide Prevention immediately gained a platform for its message and its fund-raising. In an effort to change the marketplace perception that it was a laxative for senior citizens, Metamucil launched a campaign highlighting the benefits of daily fiber therapy—complete with the medical studies to back it up. The ads featured healthy- looking thirty-something women and the headline “Beautify Your Inside,” but the brand was immediately accused of encouraging and profiting from weight loss disorders.

Even the last group that advertisers could safely make fun of is fighting back. A group called Fathers and Husbands regularly protests ads that poke fun at white males.

Amazingly, protests now spring up when marketers do something as simple as run an annoying ad too often. In the fall of 2008, Toyota publicized its no-interest loans with an ad that poorly reworked the song “Saved by Zero” from the 1980s band The Fixx. After the ad ran dozens of times during college football games, a protest group sprang up on Facebook that ultimately included 9,000 members. Small numbers, sure, but the group gained media coverage from Time magazine, the Wall Street Journal, and the popular auto blog Jalopnik. Now it seems that you cannot even hit your gross rating point goal without risking bad publicity!

The result of all of this? Oversensitized, politically correct marketers, closely watched by their conservative legal and PR departments, are producing bland ads that neither capture interest nor move cases of product.

But even that’s not the real problem.

The real problem isn’t that people hate marketing, or that most of traditional marketing today is ubiquitous, ineffective, irritating, and/or dull. It’s also not that we are wasting 50 percent or more of our budgets on nontargeted mass advertising that seems to convince no one and aggravate everyone. You could argue that advertising has always done this; historic figures have spilled a lot of ink deriding our profession—from Mark Twain (“Many a small thing has been made large by the right kind of advertising”) to pudding- pop-peddler Bill Cosby (“The very first law in advertising is to avoid the concrete promise and cultivate the delightfully vague”). Yet despite the contempt, “traditional” advertising has “traditionally” worked, as some small percentage of people who see or hear ads ended up buying enough product to pay for more ads.

But nothing lasts forever. The real problem is that consumers have changed—both in terms of how they expect to be approached with marketing, and the tools they are using to avoid it. They now have the power to control what they allow into their eyes and ears—and most of those 3,000 messages we deliver each day are not making the cut.

Permission + Technology = A Whole New World

According to Forrester Research, 48 percent of consumers today now believe that they have the right to decide whether or not to receive advertising. And this shift of power from consumer as passive receiver of marketing messages to consumer as active controller of those messages can be attributed largely to the pervasiveness of permission marketing.

Permission marketing, a term coined in the late 1990s by marketing guru and bestselling author Seth Godin, is an approach to marketing that maintains that businesses should treat prospective customers with respect by seeking their consent, via e-mail or phone, before approaching them with marketing, then giving them incentives to anticipate receiving it. The “give and take” of the dialogue that emerges is customized, cost- effective, and relevant for both marketers and consumers. In addition to driving the growth of e-mail marketing, which is now a $5 billion global industry, permission marketing has literally altered how people demand that marketers behave; they now expect to have to entertain marketing only if they are asked, and agree to grant, permission to do so. This, in turn, has fueled the attitude that consumers have the power to opt out of advertising altogether, and are well within their rights in doing so.

Now factor in technology, which allows people to opt out at the touch of a button, and marketers are faced with a whole new breed of consumer—a consumer who has the power, the gadgets, and, often, the will to actively avoid advertising messages altogether.

And we’re not talking about a handful of anticonsumerist zealots whom we can handily ignore. IDC Research, the global market intelligence firm, shows that two-thirds of DVR (digital video recorder) owners skip commercials all or most of the time. This figure soars to 80 percent among viewers 30 years old and younger. Nielsen Media Research reports that “as much as one-fifth of the audience for television’s most popular shows are skipping commercials.” That’s not 20 percent of DVR owners; that’s 20 percent of all television viewers. What’s worse, this 20 percent is largely made up of high- income, college-educated consumers who tend to buy lots of products and services. More than 50 percent of households with incomes over $100,000 have a DVR. So regardless of how hard you’re working to reach that demographic, the chances that its members will ever see your well-polished, multi-million-dollar television ad are fading rapidly.

Digital technology is also empowering potential target consumers to block marketers’ efforts online. Yes, the latest, greatest hope for buying eyeball time is already faltering just as we are discovering that people spend hours in front of their computer screens. According to Forrester Research, 81 percent of broadband users deploy spam filters and pop-up blockers. Nearly 40 percent of Internet users regularly delete “cookies” from their computer, a technology that Web advertisers depend upon to deliver relevant banners to site visitors. A collaborative tool called BugMeNot arms visitors with a false username and password combination so that they can gain access to sites that require mandatory user registration (culled for advertising and e-mail pushes, naturally).

The latest assault on Internet advertising comes in the form of a free plug-in tool called Adblock Plus. Configured to pair with the popular non-Microsoft browser Firefox, after a one- to two-minute installation process, Adblock Plus literally erases all the banner ads on any Web site you visit from that point forward. Introduced in 2007 (and named a “best product” by PC World magazine), it has already attracted more than 4 million users worldwide, and it is adding 300,000 to 400,000 new users per month, perhaps in part because of an endorsement by the New York Times, which said that the consumer experience improves dramatically when there aren’t a legion of banners begging for our attention:

What happens when the advertisements are wiped clean from a Web site? There is a contented feeling similar to what happens when you watch a recorded half-hour network TV show on DVD in 22 minutes.

And what of those attempts by marketers and advertisers to thwart Adblock Plus? The service provides rapid software updates, leading some Webmasters to become so frustrated that they are denying all Firefox browser users access to their sites, which amounts to about 20 percent of all consumers in the United States and 30 percent in Europe. A self-defeating tactic, perhaps, but what’s a marketer to do?

Now that technology has liberated consumers from the tyranny of the networks and the advertisers that support them, they are exacting revenge by exercising their freedom. And, as in any newly democratized society, there is no going back to the old way of doing things.

(Continues…)

Excerpted from THE NEXT EVOLUTION OF MARKETINGby BOB GILBREATH Copyright © 2010 by Bridge Worldwide. Excerpted by permission of The McGraw-Hill Companies, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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