Desperate Times for General Ad Agencies

Resorting to Humor to Pay the Bills

November 2006 By Denny Hatch

multipage

In fact, it’s possible to reach the majority of Americans in one place at one night of the year—Super Bowl Sunday—for which you will pay $2.5 million for a 30-second spot.

The Ratings Game
Most people believe that what’s being sold on television is product—cars, toothpaste, beer, Nexium.

Actually we, the viewers, are being sold. The networks—or individual stations—guarantee to round up a certain number of us to watch at a certain hour and they sell us to sponsors. If more of us watch, the sponsor must pony up more loot. If the ratings are below the guarantee, a rebate is paid.

Measuring the number of viewers is very tricky.

A. C. Nielsen and Arbitron
For years, Nielsen sent diaries to households—one diary for each TV set in the house up to a total of five—and asked viewers to record the day of the week, the time and channel or program watched. Arbitron did the same for radio. The number of listeners or viewers were then projected based on diaries returned.

To a direct marketer—who can measure results within 10ths and 100ths of a percent—this is a truly primitive system. For starters, the system relies on the honesty and competence of rank amateurs.

For example, I never watch an evening newscast. I watch all six. I start with Brian Williams and skip to Charles Gibson when I don’t like the story or during a commercial break. During that half hour, I check in on Katie Couric, Brit Hume on Fox, Lou Dobbs on CNN and MSNBC’s Tucker Carlson.

It would be impossible for me to keep track in a Nielsen diary!

People Meters
Both Nielsen and Arbitron have tried to bring the rating system into the 21st century by persuading people to wear little black boxes that record precisely what they watch on TV (Nielsen) or listen to on radio (Arbitron).

Implicit is measuring the influence of advertising—a scheme called Project Apollo. In the May 9, 2005 issue of Advertising Age, Al Ries predicted that Nielsen was chasing the wrong model. Ries wrote:

Marketing people live in an advertising-centric world, but consumers don’t. Advertising is the bread and butter of the marketing community, but consumers see advertising mostly as an annoyance. So if Apollo is the Holy Grail of the marketing community, then TiVo is the Holy Grail of the consumer community.

Bingo!

The Nielsen TV commercial rating system has come to a standstill because the networks—ABC, CBS, NBC and Fox—don’t trust any system that can’t track how consumers see advertising on digital recorders such as VCRs and TiVos.

The point here is that the television industry—networks and cable—aren’t comfortable with any kind of accountability.

General advertising agencies are terrified of accountability because they’re spending clients’ money like sailors, and are taking their cut. If it can be proved that the ads aren’t being seen or that they aren’t generating sales, the client will look elsewhere for advertising efficiency.

The Need for Response
The great retail mogul, John Wanamaker, said he believed that half of his advertising was wasted, but he didn’t know which half.

The new book, “What Sticks: Why Most Advertising Fails and How to Guarantee Yours Succeeds,” claims that Wanamaker’s numbers are wrong.

Based on $1 billion spending by 36 leading advertisers over five years, authors Rex Briggs and Greg Stuart claim that only 37 percent of all advertising is wasted.

In 1952, my uncle, Eric Hatch, wrote a Kraft Television Theater play and I was invited to accompany him to 30 Rockefeller Plaza one day to watch the rehearsals. This was live black-and-white TV and fascinating. At one point, I watched the mellifluous-voiced Kraft spokesman, Ed Herlihy, whose tummy preceded him by fifteen minutes, deliver a commercial—a voice over as a cook demonstrated a recipe for a casserole with canned clams and melted Kraft cheese.

It was reported that the founder of the company, old J.L. Kraft (he died the next year), watched the commercial in disbelief and went into the bathroom and threw up. But the next day, Kraft saw a surge in cheese sales and canned clams were sold out all over the country.

The commercial was a success.

Today, with media wildly fragmented by hundreds of channels, if no offer is made—and no response mechanism supplied—it’s certifiably impossible to measure the ROI of an ad or a campaign.

So at least $370 million out of every $1 billion is wasted.

About Humor in Advertising
One group of humorous ads that worked was created in the 1930s and 1940s by Theodor Seuss Geisel, who had a long and illustrious career in advertising before he became Dr. Seuss and created a line of beloved children’s books. According to The Times of London, Dr. Seuss was the seventh highest dead earner last year (tying with Ray Charles), bringing in £5.3 million. Kurt Cobain was number one, earning £26.3 million, followed by Elvis Presley, who earned £22 million.

At the end of this newsletter, you’ll find two classic Dr. Seuss ads, one of which has the caption he made famous, “Quick, Henry, the Flit!”

But as more and more advertisers move to direct, which is accountable and measurable, the sweet-talkers at the general agencies—who know nothing about direct—have to do some fancy footwork in their castles in Oz to keep Toto from pulling down the green curtain and exposing them as incompetent wastrels.

So humor is the message du jour this holiday season. Watch Santa Claus and his reindeer get a parking ticket in a Garmin G.P.S. navigational devices commercial, and see a pine tree eating a Campbell’s Soup casserole. Other thigh-slappers to watch for will be from Lowe’s, cellphones sold by Virgin Mobile USA, The Gap, Best Buy, Wal-Mart, shoplocal.com, Gifts.com, Kohl’s, American Eagle Outfitters, Target and Home Depot.

If the ads can’t be measured, at least they’ll be talked about.