Here we go again with another self-serving ‘prophet’ predicting the end of brand advertising.

In this case it’s a fellow by the name of Alex Rampell, CEO of a company called TrialPay. He predicts something he calls ‘Transactional Advertising” will replace brand advertising in the near future.

Why? Presumably because that’s what he does.

He explains the value of a brand this way:

What’s the value of Coca-Cola’s brand? Pure math – it’s the Net Present Value (NPV) of the difference that consumers will pay for Coca-Cola versus, say, RC Cola, for the lifetime of the consumer and duration of the brand. When you pay $1 for a Coke versus $.50 for an RC Cola, the $.50 difference is chalked up to the “brand.” (Yes, perhaps there are differences in taste, too – but even with an identical formula and taste, I would argue RC Cola wouldn’t sell as well as Coke). Multiply $.50 times billions upon billions of cans of Coke, and you see the power of brand.

An ok explanation, however, Interbrand estimated Coke’s brand value at $68.7 Billion in ’09. Up 3% from the previous year. Their valuation method is explained here.

As much as I can understand it, here’s Mr. Rampell’s argument in a nutshell:

...what if Walmart refused to stock Coca-Cola, instead stocking just RC Cola? Granted, Walmart stocks Coca-Cola because consumers demand it, and consumers demand it because of the brand that Coca-Cola has created, but that can easily be reversed. If Walmart decided to stock only RC Cola and expel Coca-Cola from its shelves, this would change RC Cola’s fortunes, and harm Coca-Cola, quite a bit.

Why exactly would Walmart do that? A self-defeating, circular argument to be sure.

He goes on to explain the concept further with a little help from Captain Obvious:

Preferential placement of a good or service at/near the point of a transaction is something I call “transactional advertising,” which I predict will expand as a category in the coming years.

But where’s the “advertising?”

This form of transactional advertising exists today, although you might not know it. Proctor & Gamble spends great effort and expense (though it pales in comparison to their brand advertising spend) to ensure eye-level placement wherever its products are sold.

Oh, I get it. Shelf placement and POP!

To be fair, point-of-sale is becoming more sophisticated and will continue to do so, especially with mobile transactional software, mobile apps, 2D bar codes, augmented reality and the like. Still, it’s not competitive to brand advertising, neither will it replace it. It’s simply the final stage of the purchase funnel.

Oddly enough and as much as Rampell claims that he coined the term – ‘Transactional Advertising’ has been around since the ‘80’s. I recall a couple of Canadian retail agencies using it as their unique point of difference.

He finishes with an admission about his masterplan:

Today you see very little in the way of transactional advertising online; rarely does one brand pop up in another brand’s checkout experience.

Unless it’s a house brand, wouldn’t a brand have to pay for that opportunity? And if so, given Rampell’s earlier comparison, what if it’s RC Cola versus Coke, who’s going to win that bid?

Why, the one with the best known and valued brand I suspect.

Who is this guy and why is TechCrunch giving him a soapbox? Another argument that belongs with “A Marketing Era of False Prophets and Failing Results.”

Loading mentions Retweet

Loading mentions Retweet

An excellent article on the history of advertising written by Randall Rothenberg for Ad Age. Certainly an article that new people in the business should read and study.

He finishes the article with this:

But as we near the end of the broadcasting era, at the twilight of the advertising century, this much is now clear: In the spark of creativity lies the future of business.

Advertising is fundamentally persuasion and persuasion happens to be not a science, but an art.

However much we would like advertising to be a science-because life would be simpler that way-the fact is that it is not. It is a subtle, ever-changing art, defying formulaization, flowering on freshness and withering on imitation; where what was effective one day, for that very reason, will not be effective the next, because it has lost the maximum impact of originality.

Loading mentions Retweet

By Simon Billing

Marketing should be the easiest gig going. Most people have wallets stuffed full of money, all of which they are going to – all of which they are bound and determined to spend (borne out by the pitiful savings rates in most developed economies). All we have to do is convince them to spend some of it with us.

I was looking at Dave Trott’s agency website. I love their idea of predatory thinking, the strategic underpinning of an idea being expressed as the “predatory thought”. It’s a refreshingly honest way of looking at business that channels everyone directly to the real job at hand. Preying on someone else’s share of wallet is what we do. Prouk (former Chairwallah & CD of Scali McCabe Sloves, Toronto) used to say he loved attending bi-monthly Nielsen market share audits because: “they’re the body count.”

Years ago, Ries & Trout put it slightly differently when they said that in aptly positioning our brand, by definition, we reposition the competition.

The idea of predatory behaviour doesn’t sit well with most Canadians. The Protestant work ethic, which despite our vaunted multiculturalism still underscores much of life on the tundra, means we imbue the work we do with great seriousness and moral purpose. Taking a cue from our national critter the beaver, diligence is a virtue, but the vulpine instinct is not part of the national character.

Marketing has no function if not to take a sale away from someone else. No matter how unique your offering, Mr. & Mrs. Punter will spend the money with someone else if not with you. If you’re a charity, the job is to deprive some other charity of a potential donation, or a store of a purchase that would otherwise have been made with that money; if you’re Crest it’s to steal share of pearly whites from Colgate or a store brand; if you’re the Army then you have to lure potential recruits away from the police or industry or the BNP.

Wal-Mart is a voracious hunter of other stores’ customers: drugstore customers, supermarket customers, clothing store customers. Everything they do is designed to bag a sale that would otherwise have gone somewhere else.

Marketing Magazine (in Canada) is polling readers to determine the best TV spot of the Winter Olympic schmaltz fest. I don’t know how they determined the list and, having assiduously avoided watching the country engage in its conjoined pastimes of self-aggrandisement and self-flagellation, I haven’t seen what else was on offer.

As dull, predictable and decidedly non-carnivorous a collection of corporate cuddliness it would be difficult to find. And yet this probably represents the largest marketing investment any of these companies have made in a decade. Millions of Canadians glued to the telly, the audience happily captive once again, for an entire fortnight, and all they have to say is “we’re nice folks, just like you”.

Go Canada.

*Credit: Gary Prouk, former Chairman and Creative Director: Scali, McCabe, Sloves (Canada) Inc.

Via Grumpy Brit

......................

Apple's, "I'm a Mac" campaign illustrates "predatory thinking" to it's maximum. A knife sheathed in velvet.

Loading mentions Retweet

A blog started by a Brit who claims that he is the CMO "of a big company. I can't say who. But if I say we're number 2 in the European consumer durables market relating to, or directly involving, cleaning clothes and or soft furnishings and or other fabrics, with a commitment to excellence, quality and placing superior cleaning at the core of our customers' product experience, I think you'll suss. Yes - that's us!"

The blog is mostly written to and about ad agencies, letting them know the realities of how he, as a senior marketing guy thinks. The language he uses would've made Sam Kinison blush, which after some debate, I've decided to let stand.

Here are a few of his insights into the workings of the ad biz:

The presentations

I've admitted several times that planners and their powerpoint slides turn my mind into bum-gravy, but they're by no means alone. Over the years, agencies have made many and varied attempts to present me into my fucking grave.

On one occasion, an agency MD gave me 30 slides on the agency's long and celebrated history, the account director gave me 40 slides on their 'brand eruption methodology', a planner gave me the usual 50 slides on whatever the fuck it is they do and the media buyer gave me 60 slides on audience segmentation, reach, 'the media day' and his manifesto on 'owning the media worldscape'.

Then the creative director showed me a half-page ad, a flyer and an insert for the Northampton cunting Trumpet. 

The agency barista

I am a prolific consumer of coffee (especially in the morning, when I like to make a smoothie with coffee, bacon, fried bread, black pudding, eggs, ham, lamb tikka bhuna and sausages) but even I can't fathom why agencies need a fully-fledged coffee emporium inside their building. Some of you agency hamshanks even have some desperate intern as a barista, making little ferns in the milk of your skinny latte while he dreams of being allowed to blow the creative director's assistant's dog-walker's fucking builder.

Do you know how many coffee shops there are in Soho? Exactly 7,434. There are branches of Starbucks in supermarkets, petrol stations, funeral parlours, strip joints, municipal dumps, drains, the trousers of people who stand still too long - you fucking name it. I came down to my car one morning and there was one in the fucking boot! There's more coffee than rain in Britain! Just go out and get some!

The names

It used to be Surname & Surname. Then Surname would get a call from this other Surname - and his very good friend, Surname. They'd do some lunching and, a bit later, merge into Surname, Surname, Surname & Surname. Then Surname would leave, but Acronym & Surname would come along - creating Acronym, Surname, Surname & Surname. By this time, agencies had rebelled against that old-fashioned naming protocol and were going for Dark & Esoteric or Edgy & Cool. So when Acronym, Surname, Surname & Surname acquired an up-and-coming agency to compensate for fact that they'd grown too rich to be bothered, they became Acronym, Surname, Surname & Surname / Edgy & Cool.

Now, agencies are called things like UnCulture or MeLikeYouLikeHappyTime, and I honestly can't decide which is fucking worse.

The industry-wide self-delusion that they aren't salespeople.

Come on, folks. Let's the two of us have a heart-to-heart here. Nobody else - just us. Let me be honest, because I like you / you buy me beerz.

The only difference between you and a car salesman is an ironic T-shirt.

The constant fucking 'offerings'.

What is it with you fucking people? Why does everything you do have to have a name? Why do you have to call two account executives trawling the internet for second hand research 'The Truth Laboratories'? Why is your planning department 'The Disrupterference Unit'?

And why must you have a fucking 'system'? Because whether you call it '360 Insightification', 'Mirage-Busting' or 'Gorgeouslogicmakesideasgrow', I know that your 'offering' involves an account man giving a brief to some one-time film-makers/novelists who will do everything they can to produce work that turns them back into film-makers/novelists. And you know it too, you fucking con artists.

The flaunting.

I walk into my agency. The sofas are beautiful. The reception desk is like something from a spaceship. The flooring has the reassuring feel of real wood. The sculpted fittings and furniture are sleek and beautiful. There are grand plasma screens, a stunning sculpture and, for real impact, one of the Minis from The Italian Job.

THAT'S MY FUCKING FEE, YOU CUNT-FORKS!

Jesus wept. It's like a mugger popping round the next day to show you what he spent your cash on. 'Look, I got this nice watch - and I sold your phone for this jacket. Fucking nice, eh? Same time tomorrow, you fucking twonk?'

Loading mentions Retweet

By Simon Billing

The irritating bit about the certitude of the advertising-is-dead, the-answer-is-awesomeness, canned-peas-are-an-experience, Facebook-is-fab, twitter-is-tops nouvelle vague is that there’s no real evidence to support the prognostications, theories, assured pronouncements from august symposia, and the information ‘broken telephone’ of the blog- and twitter-spheres.

It simply hasn’t been around long enough for reliable data or examples in terms of sales and other value creation over the long term. I’ve yet to see a case study that demonstrates anything other than a one-time effect. Or an example of sustained attititude change among a significant portion of the target. Or anything that relates a social media campaign to sales (other than using it as a straight sales channel which is not the same thing at all).

That’s the frustrating thing about new: it’s untested, has no history, the future is anybody’s and everybody’s best guess.

And yet there are library loads of statistics and case studies for the effects of the now besmirched and discredited use of traditional media advertising. This apparent squandering of funds can be correlated to (inter alia): awareness, trial, repeat purchase, positive attitude shift, brand preference, brand loyalty, creating word of mouth, changing behaviour, creating sustainable competitive advantage, justifying a premium price, extending product use or developing a previously untapped user base, and increasing a company’s stock price.

Then there’s the fact that most social media “successes” are for brands built by advertising, the awkward issue of cause and effect generally being swept away on a wave of triumphal euphoria.

Thousands of campaigns, decades worth of data, and myriad cases of moribund brands getting the Lazarus treatment from which to learn and arrive at informed decisions. All of which some suggest, should be consigned to the shredder or the recycling bin.

It seems a bit silly that the best alternative to not knowing which 50% of your budget is wasted, is potentially wasting 100%.

....................................

I agree with Simon. The hype surrounding Social Media and its subsequent push to the top of the heap of everything marketing is unbelievable and scary. However, social media will develop, hopefully grow up and because of that, holds much promise as an important tool in the marketing kit. It is however, media, in other words, empty space between a brand and its audience. The important thing here, in fact the only thing that matters is the content that fills the space.

Loading mentions Retweet

It seems that we’ve fallen into an age of technicians. Or worse, an age of technocrats. The focus of marketing is increasingly about technology, with few hat tips left to creativity. Rather, marketing is now the domain of those who create and promote platforms and apps. It’s the domain of those who herald a new age of conversation and giving goods away free.

These are today’s marketing rock stars. Even though many of them don’t believe in good old fashioned marketing. According to many of them, any prior form of marketing is dead, along with brands and advertising.

The funny thing is the majority of consumers couldn’t care less. Sure, they flock to facebook, use gmail and view videos on YouTube. But to them it doesn’t represent anything other than convenient and free entertainment and communication.

In fact, I’ve never heard anybody outside the hallowed echo chamber of social media actually call it social media. “What are you doing tonight?” “Oh, participating in a little social media, how about you?”

Social media is just another form of media added to the palette. Not the promised land. Neither does it represent the destruction, or replacement of marketing and advertising.

The problem is the barn doors have been kicked open allowing anybody with a social media opinion in. Now everybody is a self-proclaimed marketing expert, guru, or maven. (Oddly enough, ‘maven’ is a word coined by an ad guy in the 1960’s. But like so many things in marketing, you’d have to believe much of the history was invented yesterday).

Over at a blog called The Ad Contrarian, Bob Hoffman says, “The advertising industry, in fact the whole of marketing, is now sinking in the quicksand of complicators. They are in charge. This is the era of the complicator.

He’s right. The influx of complicators has caused confusion, inertia and as a result, some very bad marketing efforts and advertising lately. But, like most things, it’s probably cyclical.

Back in 1947, prior to opening up Doyle Dane Bernbach, Bill Bernbach wrote a letter to his then employer, Grey Advertising. In the letter he expounded on a topic that reflects much of what we’re dealing with today:

I’m worried that we’re going to fall into the trap…that we’re going to worship techniques instead of substance, that we’re going to follow history instead of making it, that we’re going to be drowned by superficialities instead of buoyed up by solid fundamentals. I’m worried lest hardening of the creative arteries begin to set in.

There are a lot of great technicians in advertising. And unfortunately they talk the best game. They know all the rules. They can tell you that people in an ad will get you greater readership. They can tell you that a sentence should be this sort or that long. They can tell you that body copy should be broken up for easier reading. They can give you fact after fact after fact. They are the scientists of advertising. But there’s one little rub. Advertising is fundamentally persuasion and persuasion happens to be not a science, but an art.

It’s that creative spark that I’m so jealous of for our agency and that I am so desperately fearful of losing. I don’t want academicians. I don’t want scientists. I don’t want people who do the right things. I want people who do inspiring things.

In the past year I must have interviewed about 80 people – writers and artists. Many of them were from the so-called giants of the agency field. It was appalling to see how few of these people were genuinely creative. Sure, they had advertising know-how. Yes, they were up on advertising technique.

But look beneath the technique and what did you find? A sameness, a mental weariness, a mediocrity of ideas. But they could defend every ad on the basis that it obeyed the rules of advertising. It was like worshiping a ritual instead of the God.

All this is not to say that technique is unimportant. Superior technical skill will man a good man better. But the danger is a preoccupation with technical skill or the mistaking of technical skill for creative ability.

The danger lies in the temptation to buy routinized men who have a formula for advertising. The danger lies In the natural tendency to go after tried-and-true talent that will not make us stand out in competition but rather make us look like all the others.

If we are to advance we must emerge as a distinctive personality. We must develop our own philosophy and not have the advertising philosophy of others imposed on us.

Let us blaze new trails. Let us prove to the world that good taste, good art, and good writing can be good selling.

Jeremiah Owyang, a partner at Altimeter Group (specializing in research and consulting on digital strategies), wrote a post on his blog, titled: “Scorecard: Does Your Agency Fondle The Hammer?” He too cautions clients away from agencies focused on tools and techniques:

Caution. Agency partners that are focused on technologies –not business needs, can destroy your brand. Although new technologies are emerging at an ever-increasing speed, creating a strategy based on tools will leave you in a churn of change, without anyway to escape. Agency partners that jump from one shiny tool to the next (hammer fondlers) risk poor implementation, not tying efforts to business goals and worst of all confusing your customers as you over-deploy.

Rather than developing a strategy based on the latest tool –focus on the end goal of building a place for your customers to come interact with each other, and your brand.  Look for agency partners that focus on customer behaviors, and business goals as the over-arching goal.

All of this is not to say digital tools and technology are bad.

Social media, is a great and promising new development that requires skill in getting to know how to use it and integrate it into a broader business purpose.

Rather, as science fiction writer, Theodore Sturgeon, so eloquently put it, “Ninety percent of everything is crap.”

Given the ubiquity of communications, hype and along with it - expert opinion – Sturgeon’s law is more true today than ever.

Loading mentions Retweet