Half The Advertising Money Is Wasted!

“Half our advertising money is wasted,” is a common whine. There are four problems with that.

  1. Nobody knows which half,
  2. It is not the same half all the time,
  3. It is not the same half in all markets
  4. It is not the same half in all demographics

Advertising is a tough business. Everyone sees it differently. Creative people, production people, channel people and the client all have different ideas. Some right. Some not so right. Typically, the client has the poorest set of ideas. They can overcome that to some extent by answering a strategic question.

What is the ad for?

There are two pure forms. The approach to each is quite different.

  1. I want to sell product.
  2. I want to create an image

You are familiar with the “sell the product” ads. Infomercials, car dealer ads, flyers on the windshield, want ads, Kijiji. Ron Popeil and the Veg-O-Matic and “But wait, there’s more.” Some are more subtle than these, but the prime purpose of the ad is to move product.

It is easier to measure this kind of ad because the campaign does not last long. It cost X and developed Y in new margin. If Y is less than X then it is a poor campaign. Revise and relaunch.

You cannot do product advertising exclusively, because a competitor can “out-advertise” you. More pages in the flyer, better prices, better time slots, and more. Similarly you can out-advertise your competitors. It is like price cutting. It only works until you both go broke.

Image ads differentiate your business, not promote a specific product or price or feature. Integrity, innovation, performance, fun, connectedness, prestige. Brand is the current buzzword. Image ads are harder to measure but can be spectacularly successful if they connect with your market. My daughter-in-law Kim produced this example that appeared in Canada on the 2012 SuperBowl. Flash Fans. It went viral immediately and had 2,000,000 youtube hits within days. It has more than doubled that, since. Way to go Kim!

Image ads are much more expensive to produce and despite that, some run only once. Like the 1984 Super Bowl MacIntosh introduction ad. Others run many times. The “Zoom-Zoom” Mazda ads can go here and so too the old Chevrolet in the Grand Canyon, or Dinah Shore and “See the USA in your Chevrolet” ads. If you are old enough to remember.

Most IBM ads and beer ads are image. McDonald’s spends more than a billion dollars per year on advertising. Most of it image. Is it any wonder that Ronald McDonald is as easily recognized as Santa Claus? In the 1930’s Santa himself got a big boost from the Coca-Cola company.

Image ads endure far longer than product ads and so they are harder to value in precise terms. “Taste Great – Less Filling” Miller Light ads have been running for over 40 years. Most people know exactly what they are. That will influence sales, but how much is a good question.

Image ads fall into “the 1% category.” The 1% category is the third layer of the Pareto Principal. 0.8% of the effort generates 51.2% of the result. Have another look at the 1% solution. Be patient. Watch for viral effects.

For success, you will need to define what you mean by wasted ad money. It is usually better to be positive and focus on the known useful part. Know what you are trying to achieve, know your demographics and markets, find a professional advertising firm and listen to them.

Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. don.s@protectorsgroup.com

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