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Ad Value

During a recent marathon of “The Twilight Zone”, my daughter and I saw the classic figure many times over.  Not Rod Serling and his smoldering cigarette, but the figure of a driven, successful young man from the black and white world of fifty years ago.  Every time a character was given the Zonal treatment for his exhaustion, tension or ennui it was a man who had made it to the top of the leading occupation of the day:  Advertising.  Clearly, this was what the industrial machine of the USofA’s Baroque Era saw as the pinnacle of success.

rodserlingWe’re now two generations past the Twilight Zone.  While the classics hold up well enough to illustrate the power of good writing, the characters don’t make a lot of sense to us.  Ad guys?  What do they do?  Popular culture hasn’t cared about them since the second Darrin, and for good reason.  It’s become obvious that mass advertising doesn’t do as much good as people think.  That has a lot of implications for both old mass markets, such as newspapers as well as new mass markets on the internet, should there ever be any.

The advertising industry is about $300 billion in total.  The largest single component is direct mail, running $60 billion or so.  Newspapers are next, running about $50 billion.  Internet advertising, at about $20 billion a year, is increasing the fastest at 15% a year, but is still similar in size to radio advertising.  What does the world get for this?

Most people in the industry know that some of the money is wasted, with conventional wisdom running around half.  That so much money is spent is given as a reason that it must do something by at least some in the industry, a wonderful Twilight Zone twist where coincidence is causality and the Ad Men are still some of the most admired people in society.  For others, there are complex psychological factors that explain the nuances of someone reaching for a particular product in the store over another, which I admit I enjoy.  The implication is that there is still proven value to advertising, even if it isn’t perfect.

The problem is that so far, internet advertising has not proven to be particularly effective.  The fastest growing category, search engine marketing, allows careful targeting of people in a way that seems to be very appealing.  Morgan Stanley, however, continues to advise that advertisers who want to use the internet look to campaigns that include e-mail – which is to say, an extension of the direct mail that is where more ad money is spent in the first place.

The suggestion here is that you want to reach the consumer in their own home (or mind) as much as possible. Going with one theory of advertising, if that’s where people put their money it must be the most effective  – and mass advertising in newspapers and teevee isn’t the biggest buy.  Yet it’s still very popular all the same.  What do you get for it?

I think that mass media advertising doesn’t promote a product or brand as much as an industry.  You should drink beer when you watch football just as you might think about how clean your house is when you watch daytime teevee or what toys are cool during cartoons.  In each case, the idea of consuming is what gets into people’s heads – and if you’re the leader in an industry, well, you reap the largest benefit.

That is why you’ll see the largest advertisers on mass media are already the biggest brands.  Budweiser, Proctor & Gamble, and Mattell are the ones you’re going to see.  First mover advantage becomes larger in this kind of mass media buy as one brand becomes associated with the whole industry.   I don’t think that all the money spent on mass media in many forms buys much more than this.

To companies with products to sell or to potential media centers, the future of advertising on the internet is not clear.  I happen to think that we have to ditch the ideas about the whole process that have been with us since the Twilight Zone and look at it from a fresh perspective.  It’s clear that the research done believes in targeting the consumer where they live as much as possible.  This works if the entire structure of the media lets people get out of it what they want.  It’s often assumed that people don’t want ads, but the yellow pages is based on the idea that eager shoppers are actively looking for information; that model, more than the newspaper model, fits the internet.

The classics hold up a lot better than most people might think when it comes to evaluating the future of ads on the internet.  Direct mail and the yellow pages are proven, but in reality the mass media like newspapers have limited success.  The failure of newspaper-like ad sales on the internet and the suppressed price for banner ads is not a failure of the internet but a failure of a model that was assumed to work – but doesn’t.  If nothing else, the medium is different.

I wasn’t showing my daughter episodes of the Twilight Zone because I want her to get into SciFi, after all, but to show her how universal good writing is.  She was hooked.   If it works, it works, after all – but if no one has ever proved it really works, well, perhaps you might want to think about it a while.  Think about the basics and what we know really works, that is.

10 thoughts on “Ad Value

  1. Erik,

    Interesting analogy with the Twilight Zone and advertising– hadn’t thought about it that way. I found your blog through Google Alerts via a keyword of “yellow pages”. Cool, huh?

    Our firm has been doing direct mail for years and are now doing a lot more PPC and SEO. Nothing fundamentally has changed– writing ad copy is still the same, but some of the technical aspects have shifted.


  2. Much of the time, advertising seems to only works for products, not services. Services need word of mouth and proven track record for someone to use the service. Personally, I toss any solicitation for services received by mail or on my door/mailbox…straight to the circular file. I don’t know these people or anything about them, and I need a personal connection in order to engage a service. We have learned in over 20 years of business as a service-oriented business not to waste money on print ads (mailers, billboards, yellow pages, etc.) because I can’t name one job we’ve ever had that came about other than by word of mouth. Personal reference. Trust.
    Products advertising is another story.
    Just my 2 cents and experience.

  3. Carolyn’s quite right, as a rule, but it must be borne in mind that Bernie Madoff sucked up those millions by word of mouth alone. Advertising (and I hate advertising) might have forced him to hew a bit more closely to fiscal reality.

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