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Saturday, August 8, 2009

Advertising is Dead.

“Advertising is dead”…Sergio Zymann, Ex Vice president of Coca-Cola told this recently. Tell me honestly, how many advertisements you’ve watched carefully today and how many have caught your attention seriously so that it would influence your buying decisions?
Seriously, I’m not kidding, but I know in 90% cases the answer from you would be nothing, may be even at the time of recalling your memory, you would be amazed that, it’s a complete blank, nothing comes out in your mind. Now tell me, while buying anything starting from the weekly shopping to your daily grocery in some kind of retail format, is it possible for you to remember all those ads and buy stuffs matching your perceptions? At any case, while in transit or at home till we go to the bed, we’re all rushing through that time frame, everyday, though we’re getting bombarded with thousands of advertisements while starting our day by Radio, TV, Newspaper, Magazines, websites, SMS from everywhere. Hardly, I could remember an ad caught my mind and had changed my buying decision so far except may be few here and there, and those few I’ve appreciated mostly for their art form or the aesthetic values. That doesn’t mean the advertisement was great and it had accomplished its goal.
Today, common people are daily undergoing through most-probably billions of ad exposures and within those billions of exposures, hardly few get attracted by the people and create a spot in person’s mind. A person is exposed for an ad for just couple of seconds and within that frame a company needs to achieve its advertising goal and for that, company is spending billions from its marketing budget. Sometimes I feel recession is good, so that organizations rethink and reorganize themselves to survive in that tight market. Customers, who buy, will buy at any case irrespective of the good or bad quality of advertisements made by the companies. Advertising may be described as the science of arresting the human intelligence long enough as milking the cow. What happens when, there is recession like now? The first thing companies would cut the costs in every aspects of marketing, curtail advertisement costs, then lay off people and squeeze down operations and costs. Which we’re seeing now, name a company which had not seen such blood bath during this span. The bigger the organization, the bigger the cost cutting agenda. Amongst them, most of the cost cutting efforts have happened from the marketing department all over the world. That means, marketing is always been treated as the step child by the organizations, because mostly the organizations are run by the Financial people, and they always had seen marketing budget as the percentage costs of the total revenues earned. Recession means the revenue would be less, directly it would be impacting the revenue, hence curtail all the marketing costs. This fallacy had been severely criticized by Prof. Nirmalya Kumar of London School of Business or even Phillip Kotler.
In the real business world, marketing department always been treated as the step child, and as if, it’s the sole responsibilities of the marketing department only to earn revenues on behalf of the company; rest others would be only counting and spending them, and at the bad times when no one is buying or mostly deferring their buying plans, start squeezing the budget from the marketing department first. Human being is always been fascinated to pass the buck, marketing department is been treated so far so rough, that we may have to scrap the entire word “marketing” what we knew and learnt so far. May be this is the call to re-invent new marketing concepts to accommodate changes for the changes happening in the market, especially at the hard times like now. “Advertising” which is the small part of the entire Marketing concepts, I’ve chosen as our point of discussion.
Reverse is again true, recession is the good time when companies should do intelligent marketing, offer better deals to the loyal customers, offer more value of money to their customers and concentrate more on customer retention. Because, this is the time good for business development, making a long lasting friendlier brand value in people’s mind, which would pay off more in the better time.
A complete natural and spontaneous dance for an advertisement is still in my mind. The advertisement was of “Dairy milk”, but it’s not for that product, rather for that dance and may be for that beautiful and natural model.
In one of my article I’ve discussed about the change in consumer behavior in India and the allied brand awareness changes happening all round. There you may also find few of the advertisements clippings, how Multinational companies changed their ad to suit Indian consumers. Let us now discuss what’s the ad goals and objectives. As per Phillip Kotller, Guru of Marketing Management Ad objective is 5M’s.
1) Mission
2) Message
3) Media Vehicle
4) Money
5) Measurement
An ad has got a message and its needed to be conveyed very clearly to the consumers, that’s the mission of an ad. Also an ad could be the brand ambassador of an organization. Coke is an established brand of “Coa-Cola”, and they can’t continue for ever “The Real Thing”, “Coke is It” or “I’d like to teach the world to sing”. Generally its been calculated that 30% of the entire money spent for an ad, gets returned as revenue from the newer customers due to an ad and most probably rest is coming other loyal customers through the selling process. I don’t believe that this theory is true particularly at this stage of brand maturity of Coke, it can really add extra 30% of revenues from the new consumer acquisition. Mostly those ads are used for the newer product introduction or recycling of the older products in newer formats, kind of old wine in the new bottles. After doing market study coke introduced a new product with less sweet in taste as good as Pepsi, because they’ve found Coke is sweeter than Pepsi, and offcourse there was a latent demand for such taste, otherwise the Pepsi bottles wouldn’t have sold. Amazingly they’ve found loyal customers reacted by the taste change and their percentage sales fall rapidly. Immediately, Coke recognized the problem and after doing root cause analysis, Coke had to reinstate the older taste to the market with the name of “Coke-Classic”.
So sometimes, an ad can also kill a product, “Pepsi One” is the case of such. Below is the ad of “Pepsi One’, this ad killed this product line. Pepsi ONE is a cola-flavored soft drink made by Pepsi, with only one Calorie per 12 oz.-can. It was introduced in the fall of 1998 as an alternative to Diet Pepsi, with Pepsi's commericals stressing its superior flavor.
Pepsi ONE was largely a failure, and while it still is on the market in many areas, it is not advertised.
Because, may be the brand rivalry in-between Coke and Pepsi was very evident through this ad, but the message was never clear, so the mission remained un-accomplished. Hence, a detailed measurement process of an ad has to be there. Someone told that, its really hard something that can’t be measured. Ad agencies would always force and claim any positive changes goes for their credit and the ad commercials they’ve produced. After an ad, if you may find the company’s sales revenue is getting down, the ad agency would immediately justifies that the product sales at any case would have to be fallen due to the market condition or product life cycle etc, but their ad made the rate of fall little slower. So, any CEO, prior taking an Ad budget into consideration has to make sure to measure the ad effects to the market and link it directly with the pay per view mode, the way Internet advertising has evolved. May be the change of Media Vehicle decision also could be made for the particular ad on this expenditure and return issue. Particularly when, there’s recession a critical decision about spending money has to be made rightly. Ryanair the cheapest airline of Europe became very successful and the case study is given in the link, also you may see their ad below, while most of the airlines of the world are making loss currently.
Measurement of ad traffics from the Billboards to the SMS would be very hard, but imagine the way Google thought about the advertisement in the web. There, a traffic converted from an ad is measured, footfall due to an ad is tracked, source of the traffic is also tracked and for which Google charge money, keeping the ad idle and publishing to different sites Google don’t charge money. So, it works only on pay per view model, this concept would most probably change the conventional Ad World sooner or later. People spending now big money for the ad commercials will soon become history, most of the companies would get into below the line (BTL) activities in the ad world and only get paid for their performances.
Sometimes it happens that the zingle is so good, the entire ad message is been diluted, people remember the zingle than the video. Or even I've watched a Bike ad few days back (forgotten the company name), which is roaring at the speed of 120KMPH in a hilly terrain, before we put such stuff infront of the consumers, we need to ask few questions to ouselves. Think how much irrelevant such ads are, how many roads are there in India, where a person can ride a bike with 120KMPH and require such product?
I personally believe if companies spend more time, money and energy and bring innovation on products designing and focus more on catering customer expectations and satisfactions, a company won’t have to spend much money for the advertisements. Because, word of mouth and satisfied clients would act as their advertisements and would bring the viral effect. In the today’s world products and categories are more than people’s need, so marketer adopts the strategies to push the products through advertisements. The reverse would be always true, pull strategy by virtue of the product capability and service capability, consumers would be automatically attracted even without costly ad campaigns and buy the products with huge satisfaction.
May be we need to ask certain questions next time prior writing a check to the advertiser for some ad commercial for our own organizations.
  • Whether we've liked the ad creativity/ the content?
  • What is the main message to be conveyed?
  • What do you think a consumer have to remember?
  • How likely the particular ad would influence to buy the product?
  • How the ad would influence your psyche to make you inclined for the product?
  • What works well and what not?
  • How does the Ad would feel like?
Inspired By: “Marketing A-Z- Phillip Kotler

16 comments:

Anil said...

I really agree with the comment " Advertising is Dead" very few ads in recent times create that urge to buy

KaushikB said...

Excellent article. Very thought from Prof. Chowdhury. Its more because when an ad. commercial runs somewhere, audience now a days hove more choices to move away to another option which aparently seems to be more attractive. Even in traditional ad vehicles, with-in the event/program ad. would be seen more than publishing it during a 'break'.

-Kaushik Bhattacharya

Som said...

Dibyendu,

Great article and the thought behind it. It is so true that outbound marketing team sees their budget slashed during bad times and everybody is asking about "can you show me the ROI"?

Regards

-Som Pal Choudhury
Senior Product Line Manager, Consumer Wireless

Nandakumar Kartha said...

From the recent advertising it seems the advertisement is heading for a disaster as far as internet ads and news paper ads. But media ads and ads in magazines will be likely to get concentrated among talented few.

Leonid Lastovkin said...

Very interesting article with many good points, although I am not an expert in marketing

Sourav Sam Bhattacharya said...

Dear Dibyendu:

I agree. To a large extent advertising is ineffective, e.g., the TV ads or newspaper ads. But, in some other form it is still there -- for example, if one wants a plumber to repair something they look at the yellow pages. Online advertising (e.g., Craigslist) is also sometimes effective.

The advertised product may need to be categorized by domain, price range, urgency of need, demographics of target consumers and so on.

Also, the end goal of advertising also needs to be looked into. Is the advertising for selling some goods or products for $$, or is it a propaganda advertising for a different cause. If we see the news media, and the type of news they propagate (in view of the business ownership of those media houses) -- they reflect sometimes subtle / sometimes blunt advertising promoting one theme over another.

So, this is quite a knee deep issue. It may not be as simple to say advertising is really dead. In fact, in many domains advertising is REALLY alive and doing WELL.

Regards.
Sourav Sam Bhattacharya
Wipro- Manager
Greater Los Angeles

PRRASHANT PANDEY said...

Dear Sir,

Great Article!!

I would agree with Sourav's comment though.

Regards,

Prashant

Jay Deragon, Strategic Planning Officer at Social Media Connection said...

Excellent commentary and I agree totally. You might find this interesting and supportive

Ken Altreuter CPC, President Altco Group said...

There is another reason that will give India more relative impetus for growth & that is the rule of law as an old democracy. With Kolkata going for entrepreneurial growth instead of staying with its communist past, is indicative of more factors aligning for India's relative real development and world class competiveness.

Advertising is not dead it is dispersing its approach in non-traditional ways. Like taxes, it will always be with us. Things like buzz marketing, the “pop-up shop”, still contain a large dollop of advertising in this new form of marketing.

Regards, Ken

Cor said...

Dibyendu,

Good topic, advertising scores high on the shortlist of major annoyances when you ask people about their opinion on media.
So if it would not be dead, you would think people around the world would wish it to be . . .

I see a number of points in your blog on the topic 'Advertising is Dead' that I can absolutely agree to.

On the other hand advertising is never expected to have people running to the shops to get that item, if it is that popular, the item doesn't need advertising.

Also, sometimes, if the advertisement is 'too' nice to look at (due to fair shaped models, like you refer to in your blog, or just because the tv-add is very well made, sometimes they are almost small movies) people do remember the add, but not the product. Which proves my point that it is all about product- or brand-familiarity. Perhaps the more annoying the add, the better it sticks?

Advertising is about repetition, getting the name of the product between people ears, like a tune you do not even like, but that, once heard, you cannot get it out of your head.

It's also about appealing to the tendency that people want to belong to a certain community or group of people ("everyone of your age is buying and drinking Coca-Cola zero, why are you still not buying it?")

In my view Advertising is not dead at all. The volume and different ways of advertising have grown tremendously the last decennials, so it becomes more difficult to escape it. People are even paying for special tv channels, just because these are without advertisements interrupting programs and movies : a nice example how you can move your product (tv channel) to the market in the absence of advertising . . .

I think the way it works with most people regarding products in advertising, the more the name of the product of vendor gets repeated, the more likely it will be first on the list when people start orientating about buying such a product and have to choose between several brands. Not because they like it best, but it's just most fresh in memory.

Perhaps a slight variant on the theme could be that in a time of clicks and bricks, where the bricks are loosing and clicks are gaining, the way advertising is presented to people has changed, but not the intent, not the volume (which has rather increasing) and in my view not the effects it has on influencing our behavior.

I hope this adds some value to your topic.

Cor

Sanju Das said...

Dear Dibyendu

I agree to the points u have put across the discussion. Ads used to have a tremendous impact to influence consumer BB but these days consumers are more aware of market info and might check the suitability of the product through many ways before making the final purchase.

But, parallely I see ads these days are more than just br comm its also about creating or maintaining curosity, interest in the minds of the customer and to ensure br recall. I like to see ads more than any shows or programmes on tv. So ads does have a huge relevance till date, only the execution & effect has drastically taken a u turn.

It was nice reading ur article.

karen rands said...

thorough assessment of the challenges faced by both companies seeking to have a product known and the advertisers that struggle to get through all the mixed media noise to get to the buyer.

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