The Advertising Algorithm is an Anachronism

I just don’t buy it, now more than ever.

The equation:

(super-duper creative ads + big audience) = buzz = changed customer behavior = great advertising ROI

… is virtually always false.

This week’s Super Bowl proved it even more.  A few hundred million dollars were spent on media, plus another, let’s say, $100 million on ad production, and most of it was lost in a cacophony of guacamole, Pinot Grigio, competitive noise and a great, buzz-worthy football game.  Yes, conversations about your business can spur sales, but those conversations can rarely be manufactured and drilled into consumers’ minds with the self-indulgent “creative-based” pseudo-science that the advertising world tries to foist on corporate America.

If I hear one more person defend Super Bowl advertising because “it’s the only time you can reach such a big audience at one time,” I’m going to vomit.  The only time reaching a large audience all at one time matters is when you want to generate timely, collective behavior, like voting in an election.  But, last time I looked, we all go to the grocery store one at a time, so why is there any advantage to reaching all of us at once?  In fact, it’s a huge disadvantage to reach a large audience at one time, because the number of people who don’t want to buy your product increases at an increasing rate as audience size increases, and the audience begins to resemble the entire population.

“Oh, but what if you’re Coke or Budweiser?  It works for them, doesn’t it?” It might, but if it does, it’s not because the ads themselves worked, but because the ads are just one small part of the brand harmony these products create. Coke and Budweiser can afford to spend this kind of money to complement the rest of their customers’ experience with the brand.

“Hey, but hit a home run in 1999, and came out of nowhere with only one Super Bowl ad, so why can’t we do that?” Yes, crazy, speculative, risky investments like Super Bowl ads once in a while work, and you might also win if you put all of your money on Red 14 at the roulette table.  But, it’s much more likely that you will lose your money.  Exceptions  don’t prove the rule. They only prove that exceptions are possible once in a while.

“But the ads are so entertaining, that people pay attention to them.” I’ve got a great idea.  Let’s have a new category in the Academy Awards for Super Bowl advertising.  DDB Chicago and Weiden & Kennedy can accept their awards there for amazing creative, and we won’t confuse ourselves trying to prove that the advertising experts have any special insights into what makes consumers buy and what drives business results.

Now I’m going to really surprise you:  In one sense, the Super Bowl isn’t a bad idea because it is so expensive, but because it is so cheap.  Huh?  Here’s the story:  $3 million spread across 100 million people is 3 cents per audience member.  If you only spend 3 cents on a customer encounter, how can you expect it to be meaningful?  All you are doing is bouncing light off of 200 million retinas, and the effect can only be superficial.  The Super Bowl is the epitome of “a mile wide and an inch deep.”

We are living in a never-before-seen economic meltdown, where customers are scared and strapped for cash.  If you want to earn the love, loyalty and business of today’s customers, you can’t do it just by interrupting their days, millions of people at a time, with :30 second or :60 second ads.   You need to focus on connecting with fewer people, but in a much more meaningful way.

Differentiating yourself with advertising is usually futile and, at its best, very short-lived.  Differentiating yourself with relationships is lasting.

The new equation:

(Brand Harmony across many interactions) x % of those interactions that are relationship-building encounters = clear, compelling customer beliefs = profitable customer action = profitable business.

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10 comments on “The Advertising Algorithm is an Anachronism
  1. Thought after reading the post: How come everyone is so quick to agree with the downfall of advertising but then jump back in to praise it when it is practiced at its most extreme level of absurdity, 100 million mass-marketed-to people at a time during the Super Bowl?

  2. Hey Steve– I saw you on the Fox Business Network this Friday, and you were really good!

    Just think of all the resources we could save if companies focused on selling to one person or small group at a time instead of the whole world all at once. Then, our efforts would focus on finding the right individuals to engage with, and we would stop bothering all the people who don’t care about our products.

  3. Brent Walker says:

    “If you want to earn the love, loyalty and business of today’s customers, you can do it just by interrupting their days, millions of people at a time, with :30 second or :60 second ads.”

    Didn’t you mean “you CAN’T do it…”? (sorry…I have an editing gene) But really, how does a mass-marketer create real relationships?

    BTW, my whole staff is reading “We” for our Tuesday Morning Bookclub and I’ve never seen them more interested in a book. We’re going through yellow highlighters at an astounding rate. Your use of Buber is wonderful. You’re a rabbi and a mensch! Thank you.

  4. Brent –

    Thanks for the edit! Yes, a mistake.

    And, thanks for you book club comments. BTW, my first job out of school (with a music composition degree) was as a recording engineer. Your folks and I can relate!


  5. Mark Silver says:

    Can I just say “amen!” Amen. Thanks. Oy.

  6. Hello Steve,

    Love your blog post. First let me introduce myself. I am G-II Varrato II. My wife is Lori Klindera. Your father, Shelby, will remember my wife as Flo Klindera. Lori (Flo) worked for your father about 30 years ago at McDonalds, as his secretary. They had a super relationship. The only reason Lori left his employ was to relocate to Florida when her, then husband, forced the family to move out of Chicago.

    But… to the point of your blog and… and particularly the branding element.

    Lori & I are REALTORS® with Coldwell Banker, arguably the largest and most recognized real estate brand in the world. REALTORS® are kind of like, mini-franchise operations. Those of us who work under the brand of a large company, such as Coldwell Banker, or Re/Max or Century 21 or any other national brand… have an advantage of piggy backing our advertising budget off of the national brand. The problem however is that, just as you note in your blog, these national advertising campaigns are not “niche or target specific”. By that I mean… nearly every ad you see, for each of these companies, are not initiated to help the individual real estate agent generate business or cultivate an existing client base. The ads are specifically designed to do nothing more than impress “brand recognition”.

    As REALTORS® we are considered a “small business”. We are likened to the franchisee of say, McDonalds, Great Clips, Chili’s or any other franchise and as such have the luxury of using that “piggy back” advertising strategy for brand recognition but that’s it.

    Long ago, my wife and I set out to create our own unique “Brand Identification”. Our efforts had, and have, several fronts, as… in our opinion… should be the case with any brand campaign and thus the expense of advertising dollars. We also chose to divorce ourselves from spending major dollars in any print ad and focused strictly on Internet Marketing. To that end, one can type elements of our “Target Market Brand” into any search engine and our web site will fill the first page to two pages of those search engines. If one types in our unique Tag Name “Lori & G-II” we fill up the first three to five pages of any search engine. That is not by accident, it is by design. We utilize many vehicles to propagate our branding elements; blogs, v-blogs, articles and of course domain recognition.

    Advertising, as you well know, should be “niche” or “target” specific. Our advertising efforts, on the web, generate for us a client base that allows us to sustain a comfortable six figure income in real estate, even in the past two years when everything around us, related to real estate, is crumbling like the great walls of Babylon.

    Our target or nich is the military real estate market, specific to Luke AFB in Phoenix Arizona. We maintain several target specific web sites, not pretty, but effective in terms of traffic and the end result, developing a client base. The majority of our clients are F-16 Viper Fighter Pilots who transition in and out of Luke AFB from all over the world. We conducted months of research and learned that the number one search term for these “Type-A” personalities, when relocating to new duty stations, and in search of real estate services is “air force home buyer or buyers”. So, you’ll see when that search term is entered into the search box of any search engine, we fill the page. The rest us up to our web site and our response efforts.

    The real estate industry is a smorgasbord of different types of real estate portals; residential real estate, commercial real estate, raw land, business real estate ect. Each of these categories are broken down into even smaller sub-groups. For example residential real estate has sub-categories like condos, town homes, high-end real estate (million dollar plus stuff), low end and many other categories. Each of these smaller categories can be broken down into a buyer pool and seller pool. Each of the buyer and seller pools can be further broken down into cultural, ethnic, economic and other demographics.

    Marketing for the real estate agent is perhaps the single most misunderstood component of our industry. All too often when agents get into this industry they set their sight on “selling to the whole world” instead of identifying a “target market” and cultivating that target.

    I love your blog piece. You hit the nail right on the head. It makes NO sense to throw millions, or thousands or hundreds of dollars at a herd or drove or flock of humanity in the hope that the ad will find that small percentage of consumers who are willing, able and ready to part with their hard earned cash.

    Today’s consumers are looking for that “value added proposition”. Today’s consumer always asks, when viewing any promotional intrigue, “What’s in it for me?” Unless the promotional ad can answer that single question, the money spent to generate that ad might as well have been flushed down the toilet.

    Niche or Target marketing is the way to go and… in my opinion, the web is the place to spend the dollars.

    Thanks for letting me ad to your blog and… when you see Shelby, please have him give Lori a call. She would love to visit old times with him.

  7. BLarner says:

    Steve, this is the best post of yours I’ve ever read.
    It’s got that grinding undercurrent of utter frustration that shouts,”How much longer are you going to bang your head against the wall in hopes it’ll make your headache go away?”

    How many more ways can we tell businesses that relationships and engagement with a product or service are what matter, not the number of warm bodies who – maybe – see your ad.

    If companies want to throw away their money, surely there must be a way to convince them to give it to a worthy charity instead.

    yar my friend,
    triiibe on!

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