Advertise, Advertise, Advertise

An economic downturn brings opportunity for those who are willing to take a leap of faith and who have a cash cow they can use to buy advertising when times get tough.  When you go looking for success stories - or survival stories - from the Great Depression, you read that there are a number of examples of brands becoming successful through the trying times. 
The most widely quoted are Chevrolet cars, Camel cigarettes and Procter & Gamble.  Each of these relied heavily on advertising because they realized that they needed advertising to create and maintain brand loyalty.

In 2008, Dave Chase wrote "How brands thrived during the Great Depression", and provided a good rundown on these three:

• Procter & Gamble. To this day, P&G maintains a philosophy of not reducing advertising budgets during times of recession, and the company certainly did not make any such reduction during the Depression. It's not a coincidence that P&G has made progress during every one of the major recessions. While competitors cut ad budgets, P&G increased its spending. While the Depression caused problems for many, P&G came out of it unscathed. Radio took P&G's message into more homes than ever, and P&G became a pioneer in effective use of that medium, including its role in creating the notion of soap operas.
• Chevrolet. During the 1920s, Fords were outselling Chevrolets by 10 to 1. In spite of the Depression, Chevrolet continued to expand its advertising budget and, by 1931, Chevrolet took the lead in its field. It is believed that Ford's weaker balance sheet entering the Depression rendered it unable to respond to Chevrolet.
• Camel Cigarettes. In 1920, Camel was the top-selling tobacco product. American Tobacco Co. then struck back with the Lucky Strike brand, and by 1929 Lucky had overtaken Camel as the No. 1 brand. Two years later, in the heart of the Depression, Chesterfield also overtook Camel. Camel countered with a dramatic increase in ad spend and, by doing so, demonstrated the power of advertising during depressed times. By 1935, it was back on top.

Advertising Lesson #5 from the Great Depression: Advertise ... Hard.

This is my final installment on Depression Marketing.  Hope you enjoyed it, and found it uplifting.

SCARE Them

Fear is a very powerful motivator.  In an economic downturn, people are particularly vulnerable.  Preying upon those fears is a food way to sell your product (questions about ethical considerations aside, perhaps).  To use fear, you need to understand individual's fears and how your product can solve those:

• Will I lose my job?
• Will I be able to buy groceries?
• Can I keep my house?
• What if something happens to me?  What will happen to my kids?
• Can I afford to buy that car?
• Should I cut-back my cable service?

Robert Bruce Donald in his article "Buying the Dream" wrote about advertising in Life Magazine:
"Another reaction within the advertising community was to insinuate guilt for products such as insurance, which, when not purchased, put family in an unreasonable situation in "these times"."

Russell Johnston in his article "Opportunity Knocks" wrote: "Many agents turned to fear campaigns to sell their goods, admonishing consumers not to let themselves get yellow teeth, bad breath, unsightly clothing, or a host of other socially disagreeable ailments that might lead to lost opportunities. For instance, in 1934, Gillette ran a series of ads for its Blue Blade line suggesting that men who were careless about their appearance were more likely to lose their jobs."

Advertising Lesson #5 from the Great Depression - Fear Sells.

 

The sun will come out, tomorrow

When you are in the depth of a financial crisis it is hard to believe thing will ever get better.  You have to know that they will.  They always do.
 
How long is a recession?  The average length of the ten recessions since World War II has been 10.4 months, with a range of 6 months in the 1980 to 16 months in the 1981-82 recession.  Of course, the big Depression is the thing that everyone worries about.  The Great Depression lasted from 1929 to 1941.  US GDP contracted by 28% between 1930 and 1932 and hit the bottom in 1933.  The Great Depression featured global impacts of massive bank and business failures, and crazy unemployment.  Not a fun time.

When a recession hits, adjust your strategy to the future.  Robert Bruce Donald looked at advertising in Life Magazine between 1936 and 1939, in his article "Buying the Dream"

… In truth it seems that 30s consumers must have needed to have one foot in a "dream world" of aspiration while one foot remained firmly on the planet, with the pendulum swinging toward the dream as the duration of the hardship lengthened.

In summary about the Great Depression:

What was illusion and what was fact?

Advertising twisted the message to serve an admittedly self-serving, yet useful purpose. Many of the products advertised were just beyond the reach of the consumer who read Life. That was absolutely as it should be and Life along with its advertisers knew it. Striving toward a better grade of whiskey, a smoother smoke, and even down the road perhaps a new automobile, served a very useful purpose: it reinforced the cultural imperative that if you were not climbing the ladder of success, you were not buying into the American Dream.

If you were not buying into the American Dream, weren't you just fooling yourself?

Advertising Lesson #4 from the Great Depression ... Remember that the economy and prosperity will improve.  When it does, you want to be sure that your products are top-of-mind and something for which your prospects have a yearning.  Give them something to need.

They still need to buy things ... make sure they are your things

Over on Profy.com, back in 2008, Svetlana Gladkova wrote “Are We Sure About Pending Collapse of Ad-Supported Internet?” 

Svetlana wrote a great story about the impacts of the depression on companies and how they responded to it.  Svetlana found that advertising remained a relatively healthy industry through the depression.  Why?  Given the very bad economy, why would companies continue to advertise?

Simple answer really when you think about it.  People still need things.  Those things may be pretty basic.  Those things need to be really cheap.  Those things must be the things you are selling.

The first thing to keep in mind is that people will not stop buying products that are essential to them. True, people will hardly buy luxury products when they need to make decisions on what is really important and what they could live without given limited resources. But that does not mean people will not buy anything at all - it simply means the focus will change for them. So the first conclusion is that we will obviously see less luxury brands advertised. But it does not mean that manufacturers of those essential products will stop advertising as well. What’s more, they will have to compete with each other for those scarce money people will have in their disposal.

What’s more, in a bad environment consumers will be actively looking for better deals to spend those scarce money wisely. And if a company can offer a better deal to a consumer, it should advertise this opportunity because if no one knows you have something better to offer when compared to your competitor, how will you manage to make consumers make a choice in favor of your product.

So ... Lesson #3 from the Depression is ... be a value-product and make sure your target market knows about your value through clear and concise advertising.

The dirty 30s and advertising your way through 2011+

Back in April 2008, Russell Johnston wrote a great article on "Marketing". The article - Opportunity Knocks - tells a great story about the horrors of the Great Depression, and the actions of advertisers.

At its worst point, in 1933, more than one in four Canadians was out of work and the average farm income dropped to less than half its peak from the 1920s.

... radio experienced phenomenal growth despite the hard economic times. From 1928 to 1933-the year before the crash to the depth of the Depression-the number of licensed sets in Canada almost tripled to 763,000. ... the actual number of sets might have been closer to one million ... Radio offered one winning advantage during the depression: once a set was purchased, the programs were free. If you could build a crystal radio, the sets themselves were free.

... the trick of radio advertising lay not in the medium itself but in the careful pairing of product with program.

Fast forward a few years (okay about 80 years), and here we are with more new media in our hands.  The web is getting old, and it is being quickly eclipsed by the small-screen  (a.k.a. the third screen) mobile browsing.  Is this the radio of our generation?  It's a great place to be (and generally pretty cheap) in this economic time.  There is also plenty of opportunity to pair with a product with a "program" - also known as an "app".

Lesson #2 from the Great Depression - Look for opportunities and be relevant.

Where's the economy going ... and what can you do about it

The current noise is that the economy is teetering on disaster once more.

What is the best marketing strategy when the economy is in the dumps? Cut back? Well, yes, in some areas of your business you should cut costs to the bare bones. But, history of “tough times” has shown that companies that invest in marketing and selling value will come out the other end of an economic slump as the champions.

I'll see what I can dig up as evidence over the next few days.

How does Formula 1 sustain itself?

Formula 1 racing - something I find oddly very fun to watch and follow - is probably the most expensive sporting activities anywhere. When one considers the costs to run a team, to develop a car, to pay for drivers, to build and operate a facility, to take the circus all over the world, and so on, the cost is staggering. I wonder what it is? Anyone, anyone?

Sure, the facilities, series, cars, drivers' overalls, drivers' helmets, and so on are all splashed with sponsors logos. But, what is the return on investment to those sponsors. Does it matter to me in Canada that Santandar (a bank) and Vodafone (a mobile phone company) sponsor the events and drivers? I'm sure not running out to open a Santandar account ... among other reasons ... because I CAN'T. They don't do business in my neck of the woods. This is a waste of their advertising budgets.

Would these sponsors be better off to invest more locally in their own communities?

• Community Investment
• Local & targetted advertising
• Personalized relationship management with their current customers

Of course, this sponsorship game is one that is repeated in NASCAR, football (soccer), golf and many other professional sports.

I like Banned Ads

Why?
Well, because most of them are really funny, and I'm sure most of them were intended to be banned. They are typically off-color to the point where they wouldn't make it on TV. These quickly become viral. Good examples...

Now THIS will make it harder for tobacco companies to brand their products

(Thankfully)

Australia is introducing legislation that will remove all branding from cigarette packages. So, the only thing they will be able to compete on is the best picture of lung cancer on the box. I can see the conversation at the cash register:

Customer: Can I get a pack with lung cancer on it

Sales Clerk: Sorry sir, we're all out of lung cancer. What about gum cancer? I have 96 packs of gum cancer left.

Read the story on CBC.ca.

Marketing isn't Advertising

Marketing is often confused for Advertising.

Advertising is a sub-set of Marketing.

Marketing is a broader discipline that covers:

• Brand - What does your company stand for?
• Product / Service - What are you doing to live up to the Brand?
• Communications - How do you engage in a conversation with your customers?
• Pricing - What is the right revenue management model to drive sales?
• Place - Where and how do you sell and service your product?
• Target Market - Who is your 'tribe' and where do you find them?

Just a part of the equation.

How much advertising $ is enough?

I recently read a very open-ended question that was posted on a forum. It was simply "How much should I spend on advertising?" That's a good question. But, you can only answer the question in the context of:

• What are your advertising goals?
• Who is your target market?
• Where is your target market?
• How do you enter the conversation with your market?

Is the answer multi-millions, and you are spending like crazy to promote new software (e.g. the Windows XP roll-out a few years back, or the Microsoft Bing roll-out of late), or is the answer almost nothing, and you build through word-of-mouth (e.g. Apple's iPad).

You can't know how much you need to spend until you set your goals, build a strategy and a plan.

The next big question, is what is your return on advertising spend? Advertising should be an investment, not a cost.

Web advertising builds brands ... and I believe it

OPA study demonstrates Web advertising builds brands :: BtoB Magazine

A recent study by the Online Publishers Association (performed by comScore, and called “The Silent Click: Building Brands Online”, but not available until June 25) indicates that online advertising builds brands.

Now you might think ... "Hmmm, that's not too surprising. A study by the Online Publishers Association shows that there are deep benefits to online advertising." But, I believe it - and more than just from a potentially biased survey - but from real-life experience. At my last job I initiated online banner advertising, and advertising through behavior-based advertising networks. Not too surprisingly people who were exposed to our ads were exposed a lot (and for very little $$ relative to traditional media). The results? When ad recall was evaluated across media (TV, radio, newspaper, out-of-home, and online), the TV ads had the highest proven recall. But only a bit behind were our very simple and cheap banner ads. There was a huge space beteen those two media and the next (newspaper).

The lesson? Online media is a very important part of a branding effort, and must align tightly with all other media, including:

• TV,
• PR,
• Radio,
• Newspaper,
• Out-of-home,
• Etc..

PR is a very important ingredient to building brand value

Research by Text 100 (a PR firm) called "Media Prominence: A Leading Indicator of Brand Value. How Effective Public Relations Contributes to Brand" shows that PR builds brand for complex products better than ads.

Key findings from the research were interesting:

• "Media prominence accounted for 27 percent of differences between the brand values of Interbrand’s Best Global Brands.
• "The relationship between media prominence and brand value depends on “product involvement” – i.e., the degree to which customers research a given product or solution prior to purchase. Media prominence was more associated with brand value for “high involvement”products compared to “low involvement” products. Advertising expenditures, however, were a leading indicator only for “low involvement” products, and accounted for very little brand value among “high involvement” products.
• "Media prominence was a particularly important component of brand value for computer-related industries, such as software and hardware manufacturers, as well as computer and Internet service companies, accounting for 48 percent of differences between companies’ brand values.
• "The results suggest that, in general, media prominence accounts for approximately one quarter of brand value, although this value is often higher for high-involvement brands, and particularly so in technology. This underscores the importance of managing and growing brand value through public relations efforts."

I wonder ... the results show that PR heavily influences brand perception, and this result was delivered by a PR company. Hmmm ... Okay, not that I really doubt it, but it is kind of humorous.

I believe that a key important point that needs to be made is that Public Relations is a critical type of communication that needs to be managed by a company as part of its overall media strategy.

Poorly Placed Advertising

Just for fun ... from the good folks over at Trendhunter.com. It is time to sit back, relax, and enjoy some Poorly Placed Advertising.

Top 10 Internet-Advertising Websites - and other neat charts

The team over at MarketingCharts.com continues to provide good information.

Top 10 Google Advertisers - April 2009
Top 10 Internet-Advertising Websites - May 2009
Top 10 Online Retailers by Conversion Rate - April 2009

and ... my favorite:
Best and Worst US Cities for Hair

Pricing vs. Social Networks: "We Boobed"

It is all over the news and the blogosphere ... an interesting story about pricing and sizing. The gist of it is that British retailer Marks & Spencer was charge more for bigger bras. It makes sense ... more bra, more engineering, more costs, higher prices. Well, okay, it made sense to someone at M&S.

• How did this play out? A group formed on Facebook called "Busts 4 Justice". Sign-ups for this group took off, and the publicity they garnered was overwhelming.
  
• After embarassing itself with bad responses to the campaign, M&S reformed their pricing policy and kicked off a "We boobed" campaign (see creative below).
• The, er, upside for M&S is that there sales have, er, bounced back substantially after all of the publicity.

This experience demonstrates three things:

1. Social Media is WAY powerful. Companies need to pay attention to it and respond to it quickly, with honesty and integrity.
2. Bad pricing is just bad business. Bad PR is worse.
3. You can win when you are up against the wall - if you are smart. Pick a good strategy, put some great advertising behind it, and go win.
   

Advertising Methodology (16) - Measurement

Recalling the old adage of “you can’t manage what you don’t measure”, it is time to focus in on measurements.

Earlier in the Advertising Methodology the point was made that you have to plan and prepare to know what measurements you are going to make, and build tools to make those measurements.

Now that your campaign is in production, measurements are taken, taken again, taken again, taken again, and so on. But the purpose of taking measurements is not just to create pretty pie charts (but, hey, who doesn't like a pie chart). The purpose of taking measurements is to tune the campaign. This may reflect back on changing elements of the campaign plan – including the media, the concept, and the creative itself.

Ultimately, the campaign must achieve its desired results. If everything has been done right, then these results should equate to the goals that were set out at the beginning.

Advertising Methodology (15) - Media Buying

After it is established that the campaign should work, media space is bought. This one small line represents a lot of work. The planning and buying should actually happen much earlier in the process. But, it is at this point in the plan that the rubber hits the road, and the media space must be there. It is also the point where, if the campaign development slips, negotiations will need to be pulled off with the publishers to save the campaign.

Make sure you have a good media planner and buyer that you can trust and treat as a strong ally, and who will negotiate with publishers and other media companies to your benefit.

Advertising Methodology (14) - Testing

After building the creative, it is tested. Depending on the type of creative it may be subject to technical tests. For instance, if a web-site is built, it must be tested to ensure it meets typical technology norms such as functionality, security, performance, and so on. If the campaign is a pull-tab, it must be tested to ensure that you can’t see through it, modify it, or otherwise determine the game piece’s outcome. This test should be carried out by a test team that is separate from the development team.

The next step will be to test the ad in front of Stakeholders. Stakeholders may include employees and customers. Like a review of good art, the test at this point isn’t to see if the ad is funny or well-liked. The point is to ensure that the ad is:

• On-brand, and
  
• That the message is clear, actionable, and memorable.

Again, this test should be conducted by someone other than the team that built the campaign.

Just to reiterate (because it is really important) ... the point of testing isn't to see if people like the ad. A good point here is that it is well documented that advertising that is funny (i.e. well liked) isn't advertising that is easily recalled.

Advertising Methodology (13) - Preparing for Measurement

While the Creative is being built, the Measurement tools also must be built. Measurements may come from a variety of sources including web statistics, sales statistics, customer surveys, and so on. This is the time to dig in, figure out how to measure the results, and build the methods and score-cards to catch the results.