by Michael Cowen on August 25, 2010
Ouch! As a marketer I am sure this figure does sit well with you. Yet as marketers we are not sure what our marketing return is.
There is the old saying that 50% of advertising work? We seem to be happy to go with this and every day we see marketers dedicating their budgets to the advertising gods.
So What’s The Real Cost Of Advertising?
As part of my research for www.makingmobilemediawork.com, I came across Graham Brown. Graham Graham Brown is director of Youth Research Partners in London who offers really keen insights into the young minds of the future.
He has a weekly webinar, in which he recently shared some really scary stats:
- an 18-year-old has received 800,000 marketing messages in their life
- they now tune out 95% of all traditional advertising
- about 70% of adverting messages are not trusted [seen stats ranging here from 30-70%]
The Advertising Gods Are Nothing More Than Your Toilet Drain
The numbers by themselves are really scary and if they don’t make you sit up and take a serious look at how you market then I don’t know what will.
But to put this into context and to try and understand the impact on this lets step back and put our marketing into context.
The Brand Equation
As marketers were taught a very simple equation for a brand strategy:
Brand = Product + Identity + Mass Media Broadcast
As an example Colgate toothpaste took fluoride toothpaste, essentially a commodity, and created the idea of Fresh Breath Confidence. This idea has been pushed out through every single different communication medium that has been available to Colgate.
It’s quite clear when we look at the brand value of Colgate toothpaste that this approach has worked very well up till now. The brand is worth It is worth billions of dollars.
But Not To 18-Year-Olds
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by Michael Cowen on August 25, 2010
The traditional media eco-system is going through a major metamorphosis. At first glance it would seem that this is largely driven by the changes of an evolving internet platform and mobile media — something where I think many marketers are taking huge strain just to manage the effects it is having on their brand and media strategies.
Changing Consumer Behaviour
Personally, I think this strain is more about the change in how our consumer are making decisions today. And I think this is the flaw where most media strategies fail.
There is no doubt that there is a symbiotic relationship between the evolving multimedia platforms and consumer behaviour. How consumers make decisions and what influences these decisions has radically evolved from the first TV commercial and marketer’s ability to refine the advertising process.
Today, TV commercials do not have the credibility that they used to. As consumers, we no longer dogmatically believe what a brand says about itself to be true. Now we believe what other consumers say and we the ability to find information in different ways and validate what we want through a peer review system.
How Billions of Dollars Are Being Flushed Down The Toilet
All I have to do is go online validate if I am making the right choice about a product I want. Lets say its a new printer that I am about to buy. It looks like a good product and I know it has a good brand name.
What happens when I use my Blackberry, click through amazon to see what other people say and find 10 bad reviews? I replace the product with one that has good reviews.
For the brand that could mean millions of dollars of advertising investment and years of brand building down the tube. Ouch. And if your consumer believes that you are not being upfront and honest you will pay a severe price.
The Fragmented Media Eco-System
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by Michael Cowen on August 25, 2010
In my last post, I gave a viral campaign about a 0.0001% chance success to get you earned media. This is not a very good rate but does this discount the idea or value of a viral campaign? Or is their simply another way to do it that is more effective? Is there a way to create very effective earned media?
Yes, we think there is. But first we need to see the flaw.
Where’s the flaw?
What marketers want to do is go big. We put a big budget, big idea, big advertising marketing campaign together and hope that we get the return? We want to get the word out to as many people as possible. We want to have the widest reach and the highest possible frequency.
And why not. It’s worked in the past so why should it not continue to work. Above the line was very successful for a long time and successfully built many brands.
But big is not the answer anymore.
Focus, not big, is the key
Kevin Kelly wrote an article that an artist only needs 1000 true fans to be successful. They do not need a huge audience but rather an audience that can sustain them and keep them in paint.
The reality with the new digital space is that a niche is now a sustainable business and that we can make a very comfortable living from a niche. The idea of a niche has been transformed to mean a sustainable quantity.
Yet is this true offline as well?
We all know about the 80/20 rule. It applies to your customers as well. If you had to do analysis of your customer base you would find that about 80 % of your profits come from 20 % of your customer – or there about. If you had a large product range you would find the same true. 80% of your revenue would come from 20% of your products.
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by Michael Cowen on August 24, 2010
You want a viral campaign. This is the golden nugget of earned media. And to say that your viral campaign will fail would be misleading. Truth is, I reckon it has about a 0.001% potential of success.
This is why my estimate is a fairly accurate one:
The two sides of potential
The first way to see the potential of something is to use a bell curve; where you take the law of averages and see what the probability is that you will succeed. Using this it’s very easy to say (with accuracy) that we won’t see a 20 foot man walking down the streets – well not in our lives.
The other way is based on the idea the long tail. This is how knowledge and ideas work. Let’s take books sales. JK Rowling will collectively sell more books than next 1000, or even 10 000 people next to her.
Successful Viral Campaigns
A viral campaign is the idea of the long tail, yet in reverse. Chris Anderson has explained the way information is mapped on the internet. The long tail looks at a historical view, and it does not behave in the way of a bell curve.
A viral campaign is the opposite side of the coin. It looks forward and has the opposite mapping to the long tail and works in the opposite direction.
The principle is very simple: If we look at Google, books sales on Amazon or any other distribution pattern online, about there is a very strong clustering of ideas in the fat head.
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by Michael Cowen on August 24, 2010
by Michael Cowen on August 24, 2010
There is a symbiotic relationship between technology and social change. Technology changes how we socialise and how we socialise inspires new technology. It empowers us as individuals, groups and organisations ands improves customer relationships.
Yet, while it’s very easy to see new technology develop, it is can be very hard to see the social impact it has. Take Twitter as an example. Suddenly it arrived. We really saw its social power with the floods in China and how earned media can work.
Of course marketers want to harness this power to develop customer relationships. Yet how do we create a China flood around our brands?
The first thing we do is default to the technology. We see a flood of Twitter accounts, Facebook pages and so on, open.
Yet technological and social changes are two really different things and have one remarkably different characteristic:
- Social change is exponential and goes up. It evolves, grows, expands, and learns. It is about consciousness and subject to evolution. There is no shelf life and its potential is unlimited. Your customer relationships are subject to social change.
- Technological change is limited and goes down. It is a physical thing and subject to the law of entropy. It deteriorates and has a very definite shelf life. Something will replace it. It is a series of bell curves where the new technology replaces the old.
The lesson for marketers (and business)
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Ouch! As a marketer I am sure this figure does sit well with you. Yet as marketers we are not sure what our marketing return is.
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