The Incompetence of General Ad Agencies
This was a banner week for marketers and their ad agencies crying HELP! The New York Times and The Wall Street Journal ran long stories about the inability of Web advertisers to determine whether their ads were effective or not.
I have spent 45 years in the world of direct marketing, a discipline that is able to measure results down to a gnat’s eyebrow—whether it be mail, space. TV, radio, telephone or the Web. Our feedback comes directly from those to whom we advertise.
Yet the world of general agencies has somehow conned the dumb little yuppie MBA corporate brand managers into believing that it’s okay to spend millions and then rely on the analytics and electronics of third parties to guess whether the money is being well spent.
The situation is sick, sick, sick.
Meet Joan Manley
When Jerry Hardy founded Time-Life Books—turning the massive magazine archives into a magnificent publishing enterprise—his secretary, Joan Manley, was as brilliant as he was. When Hardy moved on, Manley took over as CEO.
Periodically Joan Manley would fly out to her Chicago distribution center and physically go through raw orders—hand-opening Business Reply Envelopes and seeing what they contained.
Manley knew she was not in retail with the luxury of face-to-face interaction with real customers. Hers was the business of manipulating people over long distances using paper.
Apart from random incoming and outgoing phone calls and letters of complaint, examining raw orders is the only way a direct marketer can be directly in touch with the customer.
The same principle holds today. The difference: electronics has replaced paper.
A Personal Aside
A number of years ago I attended Fundraising Day in New York where a guy from Father Flannigan’s Boys and Girls Town was a panelist. One of the mainstays of charity mail is the use of personalized address labels as the freemium (a free goodie in the outgoing envelope). When a consumer receives a sheet of personalized labels to use on the family’s outgoing mail, it lays on a guilt trip that results in a precisely measurable increase in contributions.
Boy’s Town Guy told us that his marketing people flatly refused to test these labels “because everybody was using them and they did not want to look like everybody else.”
One day, Boy’s Town Guy went into the mailroom and grabbed a bag of Business Reply Envelopes à la Joan Manley. To his astonishment, in the upper left corner of many of these BREs were personalized address labels sent out by competing charities. Clearly his donors had responded to this marketing technique by others.
A mailing that featured personalized address labels was tested, and it quickly became the control.
The lesson: If you are not directly in touch with your market—and are making decisions based on gut instinct—you are throwing money down the sewer.
The Dot-Com Boom/Bust
In the late 1990s, when the dot-com boom was booming, the hot-shot twentysomethings, who dictated the styles and protocols of the Web, told us old-timers in marketing that we were not needed any more.
“This is a new medium—a new paradigm—and old rules no longer apply,” was the mantra. “New rules are needed, and we are making them up as we go.”
So we geezers cried in our martinis and waited.
In the immortal words of Emeril, “BAM!” The dot-com bubble burst, and $4 trillion disappeared into oblivion—roughly the GDPs of France and Italy combined.
It turned out these wunderkinds did not know diddly about the basics of marketing. They knew not the difference between features and benefits, nor the difference between eyeballs and paying customers, nor how to make an offer, how to ask for an order, how to make it easy to order and—above all—how to know whether their advertising was working or not.
Apparently those who advertise on the Web still don’t.
Web Marketers: Wringing Their Hands, Gnashing Their Teeth
Several stories broke this week about the trouble Web marketers have trying to measure their advertising. Emily Steel wrote in The Wall Street Journal:
Advertisers increasingly want more-detailed feedback on the effectiveness of their online marketing efforts, both to justify their increased spending on the Web and to help guide their future allocations across all available media.
And in a New York Times story—titled, “How Many Site Hits? Depends on Who’s Counting”—Louise Story wrote:
How many people visited Style.com, the online home of Vogue and W magazines, last month? Was it 421,000, or, more optimistically, 497,000? Or was the real number more than three times higher, perhaps 1.8 million?
The answer — which may be any, or none, of the above — is a critical one for Condé Nast, which owns the site, and for companies like Ralph Lauren, which pay to advertise there. Condé Nast’s internal count (1.8 million) was much higher than the tally by ComScore (421,000) or Nielsen/NetRatings (497,000), whose numbers are used to help set advertising rates, and the discrepancies have created a good deal of friction.
In Direct Marketing 101, beginning students learn the basic steps needed to persuade a prospect to become a customer. This inviolable rule applies to direct mail, off-the-page-advertising, DRTV and radio, and the Internet. It all comes down to the acronym, AIDA.
Where general advertising falls is in the Action phase.
If you have persuaded someone to buy—or donate or seek further information—it is imperative to have an action device so you can close the loop and consummate the transaction. An action device can take the form of an order form in a direct mail package, a coupon at the bottom of an ad, a cents-off coupon in an FSI, an 800-number or a hyper-link on a Web ad to click on.
With no action device, the ad will be instantly forgotten in the clutter of 3,000 other advertising messages the average consumer is hit with each day along with the thousands of other interruptions in the ordinary business of living.
On the Internet, a simple click is not enough. A click may bring eyeballs, but only an offer will get action.
General Advertising vs. Direct Marketing and Vin Gupta’s Victory
General advertising is the business of creating awareness; direct marketing is about changing behavior by generating response.
Of the 64 spots on the 2007 Super Bowl TV show, only one advertiser changed behavior: Vin Gupta of infoUSA, who used an offer to get a response.
The offer: “For 100 free sales leads, go to salesgenie.com.”
Among the comments by the uppity, elitist critics reported by Eleanor Mills on c/Net news:
“I kept waiting for the punchline … and it never came. It was like a cheesy SNL parody,” wrote one commentator on YouTube. “Was this a college course marketing class project? (no disrespect to the undergrads). ‘How to blow 2 million in 30 seconds.’ Inexcusably bad.”
Advertising Age columnist Bob Garfield gave the ad two stars out of five, calling it “so monumentally brainless and amateurish it actually attracts attention—i.e., is this really a Super Bowl ad??? No problem. The ‘Glengarry Glen Ross’ crowd won’t downgrade for insipidness.”
“There has got to be more about it than just people watching it because there is so much clutter during the game,” said Matt Creamer, editor at large at Advertising Age magazine who called the Salesgenie.com a “low-rent ad.”
Gupta’s $3 million investment in the Super Bowl salesgenie.com ad was ranked absolutely last by the 238 volunteers assembled by USA Today and given hand-held Ad Meters to rate the ads in real time as they ran.
Not reported: The salesgenie.com ad rated #1 in direct response, bringing 30,000 people to the infoUSA Web site, generating 2,100 phone calls and an additional 25,000 views on YouTube.
The Web traffic monitor, Hitwise, declared it to be “ the third highest market share rise among the Super Bowl advertisers, after King Pharmaceuticals and Budweiser.”
Vin Gupta knew exactly what he was doing while America’s top advertisers and their smartypants agencies blew zillions of dollars showing off to each other and wound up not knowing squat.
“It’s the Offer, Stupid.”
In point of fact, any of those 30- or 60-second Super Bowl ads—or any other TV spots—could devote the last five seconds to the visual of a Web address and make a quick down-’n’-dirty offer. “Save $2” on Coca-Cola … “Free Barbecue Cookbook” from Budweiser” … “$2,000 rebate and free Bose car stereo” from Toyota.
This would have brought in some feedback directly to the advertiser. No, it’s not perfect, but it beats by a long-shot the business of total reliance on a third party’s electronic analytics—which could be deeply flawed—to guess whether you are successful or not.
Further, in this epoch of viral advertising, Web and TV ads are forwarded all over the Internet and reside on YouTube. The use of the offer extends the reach and effectiveness of your message and incrementally improves your ROI.