Advertising: Still not working in the 21st Century

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Five years ago I threw out a statement in a blog about how Facebook gets content, that caused a bit of a stir.  I said, “Advertising doesn't work the way you think it does.”  No one commented on the focus of the post, just on that statement.  They didn’t like it.  They were mostly advertising people and a few B2B marketers.  A few things have happened in 2014 that makes me want to restate my position (not change it) and get a little deeper.

Advertising does not work the way you think it does, especially in the 21st Century.  

In the “Facebook Fraud” video, by Derek Muller of the science blog Veritasium, Muller makes the claim that pretty much all the business engagement you get from Facebook is bogus.  For the most part, he’s right because most people use Facebook as though it were a magic marketing box.  They believe that all they have to do is plug in pictures and content about their product and services and the world will be beating down they doors. 

Then came the story late in February of a fashion magazine publisher who spent the equivalent of the GDP of an African nation on Facebook advertising only to get virtually zero return in sales.  So Muller was right?  Nope.

Muller accurately states that Facebook advertising based on likes doesn’t worki, but he makes they wrong assumption that it’s the fault of Facebook.  It isn’t, though.  It’s the fault of the user.  

There was a time that you could flood a media channel with advertising messages and create a significant return on your investment if that investment was in the 100s of millions of dollars.  When the ‘net and social media arrived, the cost dropped to the 10s of thousands of dollars and the marketing/advertising world thought they had found a gold mine.  It hasn’t panned out and everyone wants to blame the medium and the agencies who helped you develop and disseminate content

When you could hammer your message into the skulls of the customers through a relatively few media channels, all of which were owned by a small group of corporations, you would be right.  Today, however, those customers have more opportunity to ignore those messages than ever before.  They hate advertising and they avoid it whenever possible.  If they liked your messages, they wouldn't buy streaming media devices, DVRs and initiate polo-up blockers on their browsers.  You can’t pound the message into their heads anymore.  You have to get them to ask for it.

Advertising can establish brand awareness… unless you don’t understand branding then it fails and most marketers, especially in B2B niches, don’t. Advertising also reinforces a decision a customer has already made, which is a double-edged sword.  If a customer has decided to buy your product it speeds up their action.  If the customer has already purchased the product and is happy about it, advertising makes them feel good about their decision and builds a desire to continue doing business with you.  But if the customer has had a bad opinion of you at the start of the decision process, advertising only serves to piss the customer off and makes them actively campaign against you.

The thing marketers want advertising to really do, produce sales, it doesn’t do very well at all, unless you are trying to sell boner pills or “natural” cures for obesity, and that only works on impotent fat people.  

Social media is not advertising.  It isn’t marketing.  It is communication.  It is conversation.  And no one truly likes to talk to someone who only talks about themselves.  That was the mistake the fashion designer made when he tried to run an ad campaign through Facebook. He only talked about himself and his product.  He paid anonymous people, unwittingly, in third-world click farms, to boost his profile on Facebook and then provided nothing but advertising messages that no one wanted to listen to about products they had no interest in.

Muller was right because social media is filled with narcissists who want to talk about themselves.  Some of them will actually pay people to boost their content, and when you pay people to listen to you, they will and smile.  But if you really want attention from your customers, you have to pay attention to what they say.  Tell them what they want to hear.  And if you do it well, maybe that might be willing to listen to what you have to say.

Advertising doesn’t work… the way you think it does.  Don’t change the medium you use.  Change the way you think.

Is advertising dead, too?

Reading about the Google quarterly report yesterday gave me the subject of today's post.  Google is seeing a continued slump in ad rates and reports are coming out that show that mobile and online advertising is not seen as much by consumers as some in the media have claimed.  Yet budgets on mobile and online advertising are climbing fast.  How long before advertisers realize they are not getting a decent ROI and start pulling back?

Of course, the knee jerk reaction is that the medium is at fault.  After all the content in the ads is the next thing to Shakespeare, right?

It seems to me, and there are studies that back this up, that the approaches to content are still mired in the belief that online and mobile media are still "mass media" with the goal of reaching out the the lowest common denominator.  Campaigns are fileld with the wrong content targeted at the wrong people most of the time, which marginalizes customers.

We recently had a meeting with a company that wanted help with their content, so they showed us their messages.  We showed them that their messages were exactly the same as five other companies in the industry (but not in their niche) with changes only to the name of the company and products.  How had they made such an error? They looked at what everyone else was saying and wanted to make sure they didn't confuse the customer, they said... which is exactly what they were doing.  After hiring a market research firm they discovered that their messaging with the opposite of what their customers needed to know.

It looks like companies may be on the verge of shooting the messenger when they should be looking at rewriting their message.


Custom content and complaining about the weather

Wow.  I've been getting an earful for several weeks about the changes in B2B media,especially in the embedded, semi and electronics industry.  One might think it's Armegeddon.

One PR maven just came out and said that the efforts of companies like Cadence, Intel and Altera to produced independent content is a smoke screen and that they are "clearly" not objective.  And yet when I've heard the same thing from others, no one can produce any CLEAR evidence that the content is anything but objective... at least as objective as a human being can be.

Like climate change, humans have had a significant hand in creating the current environment and, like climate change scientists, there are those who say it needs to be reversed and those (like me) who say we need to adapt.  Why do I take that position?  Because no one knows how to reverse it.

Let me be very clear, here: unless advertisers decide to quadruple their ad buys, like, tomorrow, nothing is going to go back to the way it was.  Why quadruple? Because that's how much the advertising budgets have been cut since 1999.  To make up for that loss, media companies have had to identify new forms of revenue.  Sometimes it's in the form of selling placement of news releases in a box on the online page.  Sometimes it's in the form of selling space for "contributed" articles.  Sometimes it's in events.  Sometimes it's in custom content.

And here's the thing: Marcom and PR folks are MORE than willing to promote companies that way.  They are NOT willing, however, to quit working for companies that prefer NOT to by ad space.

Make no mistake, display advertising is what made journalism, PR and marcom effective for several decades.  But when it became possible to get news releases distributed "for free" on the internet and media companies started accepting brochures in the form of "contributed articles" in pay-for-play programs, the effectiveness of it all became questionable.

So we are faced with two possibilities: either force corporations to start advertising again and let other people be concerned about ethics, or learn how to adapt to the current environment that REQUIRES individual commitment to ethics.

Ethics is a very personal thing.

Last week we started a lively discussion about how media is evolving, what is right about it and what is wrong about it.  We also touched on the issue of reliability and ethics.

Today an article from crossed my screen and deals with the issue of ethics and content head on.  You may not agree with it, but it's a statement of what reality is for media today.

Let me say this about the issue of ethics: there is no organizational structure that can absolutely ensure content follows a particular ethical standard.  In fact, the reliance on traditional business models in media, rather than actually knowing what the professional standard is has helped hasten the demise of traditional journalism in the 21st Century. 

Ethics is a personal construct. You either are or are not ethical.  No one knows for sure where you stand or what you are doing.  Only you do.  Everyone else is just assuming where you stand.  Your organizational structure does not ensure your practice.


Advertising is still at the heart of media freedom

There's something of a controversy over the Dish Network's technology that automatically skips over advertising on content recorded on their DVR system.  It's been the focus of Dish's advertising program as well as a Congressional investigation on the Future of Video.  Most people are pretty thrilled with the technology and it is boon to Dish.  

I am a devotee of blasting through commercial breaks with my DVR and I'm a little envious of Dish subscribers who have the tech, although I'm very happy with Direct TV over anything else I've tried (AT&T doesn't service my area with their system).  Here, however, is where the controversy rages.

Dish is dropping AMC and a half dozen other channels over increasing fees, claiming there are nbot enough viewer to warrant the increase.  The problem is all the channels Dish is dropping are also subsidized by advertising and he advertisers are balking at pay rates for commercials that people never see.  The channels we are talking about produce some of the best programming on the planet and are award winners.  The network fees and advertising revenue are what makes it possible for them to continue doing that.

I hate commercials as much as the next guy but the reality is that advertising still finances most of our media.  The more we make advertising ineffective the more we are going to have to pay for good programming... unless of course you like reality shows.

That goes for stuff other than TV.  A few years ago there was a study put out that found that engineers got most of their information about new products from news releases.  That immediately got marketing folks in engineering-instensive industries to give up altogether on advertising and just putting out press releases.  What everyone ignored in that study was the reason they got most of their information from news releases is that there wasn't any other source of information easily found on the web... because everyone was cutting back on advertising which reduced the amount of third-party information about products.  You know, journalism.

So even though I don't like most advertising I keep remembering what it is there for:  To keep me informed as well as entertained.  We should all keep that im mind.

Broadcasters pulling the plug on Free TV?

The trend away from free content is gaining momentum, this time in the area of TV. An Associated Press article today reported that the broadcast industry is thinking seriously about following Rupert Murdoch's lead from last fall and eliminating advertising-supported media altogether.

The trend away from free content is gaining momentum, this time in the area of TV.  An Associated Press article today reported that the broadcast industry is thinking seriously about following Rupert Murdoch's lead from last fall and eliminating advertising-supported media altogether.  ABC, NBC, CBS and Fox are all considering the very real possibility of going dark on public airwaves and broadcasting strictly on private broadband networks.  This will mean higher cable and satellite bills.

This would be an earthshaking move for the information industry altogether and there are several possibilities that could arise.  Those who refuse to pay for broadcast will lose access to sporting events, news, and general connection to pop culture.  That will reduce the potential audience for all of those areas and reduce revenues.  On the plus side, those affected will have to return to older communication paradigms, like print and radio for their information... or base all their understanding on the flood of news releases on Google.

But it also means the death of another industry... advertising.

We live in interesting times.

Advertising needs a hand

Guy Kawasaki did a post in Open Forum this week on "Is Advertising is Dead" reporting on a panel of advertising experts from Facebook, Yahoo and Microsoft.  The purpose of the panel was to discuss the benefits and pitfalls of using advertising to support a web-based business.  There were some good points, but like every other discussion I have seen on advertising it missed an important point:  How do you make it work?

Advertising does not create sales.  It improves them, but  it doesn't create them.  It reinforces opinions and impressions that have already been established.  For advertising to work, the initial sale has to have been already made; the first impression established.  The panel got close tot he subject with the statement: The key starting point is great content. When you have great content, you’re more likely to attract audiences, and audiences are what advertisers are looking for."  

The content is what establishes opinion and creates the initial openness to a sale, but that content has to have at least the appearance of objectivity to do its job.  If the content in the online publication is obviously biased in favor of a particular vendor, it doesn't meet the definition of "great content" that the panel says you have to have.

This is the key component missing from social media programs in corporate America and what needs to be addressed before they will become valuable to the market.