Why Advertising Works, Even When You Think It Doesn't

http://www.theatlantic.com/business/archive/2011/08/why-good-advertising-works-even-when-you-think-it-doesnt/244252/

by waxymonkeyfrog • 15 years ago

110 70 15 years ago

Afton• 15 years ago

Also see: source stripping, where we remember 'facts' without remembering their source.

Slightly OT: I used to think all ads were stupid, and the industry run by morons. Then at some point I thought that at least some of the ads seemed clever. At that moment, I realized that I'd shifted, and become a target demographic. The ads before weren't clueless, they just weren't aimed at me.

jmjerlecki• 15 years ago

This particular quote isn't about advertising, but its something Steve Jobs said that reminded me of your post.

"When you're young, you look at television and think, There's a conspiracy. The networks have conspired to dumb us down. But when you get a little older, you realize that's not true. The networks are in business to give people exactly what they want. That's a far more depressing thought. Conspiracy is optimistic! You can shoot the bastards! We can have a revolution! But the networks are really in business to give people what they want. It's the truth."

waxymonkeyfrog2• 15 years ago

Great/scary quote

larrik• 15 years ago

That quote is basically the entire premise of Fahrenheit 451.

vannevar2• 15 years ago

The networks are in business to give people exactly what they want.

No, the networks are in business to create desire. As a rule, people generally want what their peers want, so the chief goal of advertising is to create the impression that everyone wants the product. The very act of putting it in a prominent place is the first step, since everyone seeing it knows that everyone else is also seeing it.

waxymonkeyfrog2• 15 years ago

Excellent point. My 'favorite' comment on the article page is the guy who says ads don't work very well, except for the majority of people, whom he calls "sheeple."

You can't say that ads don't work and also argue that most people are too mindless to ignore them!

Vandy_Travis2• 15 years ago

I'm guessing he's implying that higher level thought processes more associated with intelligence act as a defense against the advertising influence.

joshklein10• 15 years ago

Madison ave ad exec here. They're talking about a specific kind of advertising, what we would call "brand awareness" advertising. The objective is, as they say, not to get you to do anything, but rather to shift your perception (implicitly or explicitly) about a product or brand. Alone, it doesn't do much of anything. Matched with direct-response, promotions, events, point-of-sale, etc ... it can be powerful. But this is a tool for mass market consumer packaged goods and the like, not your niche startup.

Since they have the picture of the Old Spice guy in the header, that's a perfect example to use. Those ridiculous commercials were not meant to send you running out to buy deodorant. Amongst other problems with that, deodorant is what we call a "low consideration" market - as in, you just don't really think about it. You came up with your go-to brand, then you just stuck with it because of inertia. You can't convince someone of the functional benefits of one brand versus another because they're all exactly the same thing.

Those Old Spice spots are meant to have a multi-year effect on your perception of the brand. How many of you remember that Old Spice used to be thought of as an old man sailor deodorant? They wanted to move away from that perception, and in a decade, no one will remember anything except how funky and hip they are.

I wrote about this campaign when it broke in July of 2010 here: http://www.joshklein.net/is-old-spices-viral-campaign-a-fail...

As an interesting anecdote, Tide has 70% of the detergent market despite literally being exactly the same box of chemicals as any other detergent. Except their box is a different color, and they advertised for 50 years so that your mother would tell you which brand to use when you went to college.

EDIT: It's worth mentioning that this kind of advertising is getting harder because of something you need to achieve called "share of voice". There used to be 4 TV stations that the whole country watched, so you could spend enough money to blast your message into the head of every American. This is obviously not how the world works anymore - you simply can't reach everyone, and even if you could, there's almost always a better way to segment your audience and only speak to the people who care. That's why I work in digital advertising, and think the TV/Print people don't have great long term prospects for their industry.

Pewpewarrows2• 15 years ago

Off-topic, but do you watch Mad Men? If so, what is your opinion of it, as an ad exec?

joshklein10• 15 years ago

I do, as does everyone in the office. Our parent company is one of the "Big 5", and I know people in all of the others, some of which are explicitly named in the show. Everyone in the industry is obsessed with the show because it is spot on, minus the womanizing and (mid-day) alcohol consumption.

Everything from the inspirational speeches to the insane personalities is accurate.

marcin2• 15 years ago

Good point. Also worth comparing startups to regular SMBs, who don't do national TV advertising but rather focus on local listings, niche magazines and outdoor. There is a tool for every marketing job, which for a startup might mean sponsoring a meetup of early adopters, then releasing some shwag, doing PR or advertorials, and ending in harvesting demand via search. Otherwise, when you perceive advertising as a hammer, everything starts looking like a nail.

_delirium• 15 years ago

A lot of small businesses do seem to do the brand-awareness thing as well, but on a smaller scale, e.g. local TV affiliates. One classic is the annoying/insane mattress salesman with a ridiculous ad that replays constantly, not really to get you to go buy a mattress now, but to build name recognition so that the next time you do need one, you remember that Crazy Uncle Bob's Mattress Emporium exists.

MicahWedemeyer• 15 years ago

Thanks for the clarification. For niche players (like me), it's difficult to separate out a lot of the Fortune 500 advice on advertising. Creating "engagement" and "brand awareness" is all well and good, but if my total ad budget is $5,000 for a year, then it's tough for me to say, "Oh well, people have a slightly improved vision of my product and/or brand. Money well spent."

We've found that ads that just come out and say what we do perform much, much better. Simply bring up the pain point we solve and how we address it. Couple that with a call to action. Sure, it's pushy and unsexy, but it's easy to understand and it translates directly into user action.

joshklein10• 15 years ago

Fortune 500 advice on advertising has almost nothing to offer you; I'm glad you've been able to find a better way for yourself.

Fortune 500 Marketing 101 breaks your activities out into the AIDA funnel - Attention -> Interest -> Desire -> Action. [1]

I can't think of any reason a startup would focus on any part of that funnel before "action" unless they needed to achieve some bizarro network effect for their idea to work (in which case they better have a couple million bucks to drop, and will still probably fail).

The sort of advertising before "action" presumes you're talking to someone who doesn't already know they need something like your product, and doesn't already desire something like it. The only reason to communicate to someone like that is if you've already maxed out your market share amongst people who give a hoot.

[1] http://en.wikipedia.org/wiki/AIDA_(marketing)

wisty• 15 years ago

I guess you want to focus on sales, not marketing.

IMO, google text ads (and affiliate schemes, and other similar products) are sales. You find a person with a problem, drive them to a landing page, then pitch to them. Maybe you to do it a few times, but the ultimate goal is to make a sale. The fact that it costs a lot less than a salesman is just a bonus.

Banner ads are more about building your brand, and could be considered marketing.

varikin• 15 years ago

On those lines, I have realized lately that I am more inclined to buy products that have familiar names, especially if it is a type of product I am not familiar with. For example, if I needed some allergy medication, I would look for something I have seen frequent commercials about. Not because I think they are better, but because of my limited knowledge, the ads are all I have.

joshklein10• 15 years ago

There's a good bit about this in "Freakonomics". Rationally speaking, a company that can waste a ton of money getting you to try their product has signaled their expectation that you will actually like their product enough to keep buying it. In this way, something like a celebrity spokesperson indicates a certain level of reliability. The product probably won't poison you.

Also, in lieu of actual information, social proof (buying whatever everyone else buys) is a pretty good shortcut for picking the right thing. That's why we have such a strong compulsion for it; if everyone else eats berries from that tree, it probably won't poison you. If everyone else buys ipods, they probably play your music well enough to get by.

This bothers the heck out of rational optimizers like we people who frequent HN, but the average person simply doesn't care enough.

brazzy• 15 years ago

That's exactly the effect most ads have as their first goal.

larrys2• 15 years ago

"They're talking about a specific kind of advertising, what we would call "brand awareness" advertising. The objective is, as they say, not to get you to do anything, but rather to shift your perception (implicitly or explicitly) about a product or brand. Alone, it doesn't do much of anything. Matched with direct-response, promotions, events, point-of-sale, etc ... it can be powerful. But this is a tool for mass market consumer packaged goods and the like, not your niche startup."

I think there is another principle that comes into play even for a niche startup.

An startup gets initial publicity maybe from TC or HN or even mainstream media. I think it then needs to spend money on brand awareness advertising to keep itself from becoming "out of site out of mind". Unless of course it's mentioned everyday in the news (like Twitter).

My question to you (as the ad person) is do you think that a company like myspace could have prevented their decline at least somewhat by investing in brand awareness advertising meant counter Facebooks rise? (Forgetting for a second the things they failed to do or need to fix).

joshklein10• 15 years ago

I do not think Myspace could have saved themselves through brand advertising, because Facebook wasn't attacking them at a mass audience level; they cornered the college market, school-by-school, then methodically expanded social-group-by-social-group. According to the research, in most categories, recommendations from friends and family is far and away the most important influencer. Advertising doesn't come close. And anyway, this is very much the opposite of mass market awareness; they did exactly what a startup SHOULD do, which is narrowly define their audience of early adopters and then focus all their energy on a growing a critical mass of adoption there. Then, and only then, should you consider growing to a broader audience.

Also, good advertising can never save a bad product.

kstenerud2• 15 years ago

I dunno...

If I'm looking for a "low consideration" product, I just go for the cheapest one. They're all the same, so what's the point in going for a particular brand? This is where the "store brands" are nice.

For snack food, I check for MSG, which, if present, indicates that they're putting other nasty shit in and using MSG to mask the taste. If it passes that test, I'll try any of them once, then stick with whatever tastes good and has the least amount of ingredients I can't pronounce. Or I'll just buy some trail mix (whichever brand they happen to have).

If I'm looking for something I plan to use long term, I go to a number of trusted review sites to see what people are saying about it.

I've switched between Seagate, Maxtor, Fujitsu, and WD many times over the years based on which company maintained quality at the time and which one cheaped out (once again, based on reviews from places like Tom's Hardware, Consumer Reports, etc). You'd be amazed at the swings in quality these companies have year-over-year. Same goes for Asus, Abit, Gigabyte, Intel, MSI et all for motherboards, Toyota, Mazda, Ford, GM, Audi, Citroen for automobiles. Glues, power tools, jackets, shoes, bicycles, furniture... the list goes on. If you're not researching them, you're gambling with your money.

I could rattle off a huge list of advertising jingles I've heard throughout the years, but I've never paid them any heed in disposables (I buy the cheapest one), nor have I bought big ticket items without some serious research upfront.

jacques_chester2• 15 years ago

You are not a normal buyer. However:

1. You'd be surprised how effective some of the approaches are at a subconscious level, and 2. The mass of people don't spend a lot of time comparison shopping.

Try and find an American sitcom, minus laughtrack. You'll be amazed at how painfully unfunny most of them actually are.

arohner• 15 years ago

Out of curiosity, as a Madison ave ad exec, what do you get out of HN? Are you technical? Are you here for business or pleasure? What does the HN crowd need to learn about advertising?

libraryatnight• 15 years ago

Advertising could be considered hacking the brain. ;)

masterzora• 15 years ago

Those ridiculous commercials were not meant to send you running out to buy deodorant.

Amusing fact that I think actually helps to drive your point in further: those commercials are ostensibly about their line of body washes, not deodorants. In fact, Old Spice body wash sales have dropped since those commercials started while sales of their products on the whole has nearly doubled.

timbre• 15 years ago

A side issue, but there are real differences among what many people think of as interchangeable brands.

I started using Tide many years ago after, dissatisfied with my laundry results, I found a Consumer Reports article that said it was the best. I just did a quick search and they say it still is, although you can get your clothes almost as clean with some much cheaper brands (http://www.consumerreports.org/cro/magazine-archive/2010/jul...).

Pewpewarrows2• 15 years ago

It is precisely for this reason that I'm largely confused by Internet advertising payments. A lot of companies only want to pay out based on the number of clicks an ad gets. If what this article says is true (and I've come to this conclusion myself before), then the direct clicks as soon as someone sees an ad on a web page is largely irrelevant. What should matter are the impressions over time, allowing that product or service to grow in the consumer's mind.

javery• 15 years ago

People cling to clicks because it is the easiest thing to measure (clicks and then conversions) - and also because Google has trained them to do so with AdWords.

There is a movement to more multiple attribution style reporting - so when you get a sale you would see not only the click that generated it but the display ad that person saw that caused them to search on Google and finally click on your ad there.

rokhayakebe• 15 years ago

Branding (impressions over time) vs Direct Response (clicks).

joshklein10• 15 years ago

Two points:

1 - TV ads are more interruptive; to ignore them, you have to leave the room or change the channel. Most people just deal with sitting through them. On a website, you can easily ignore the ad. There are plenty of exceptions in digital advertising - pre-roll for web video, page takeovers, and other stuff that is unbelievably annoying, since your expectation as a web user is to not be interrupted.

2 - It depends on the key performance indicator for the campaign. Certainly, direct response campaigns want to measure clicks (or purchases/actions - the closest you can get to the sale, the better). But there are awareness-style campaigns on the web, and those advertisers pay by impression, not clicks. The problem is that with networks, you don't know the quality of the place your ad is running, so an impression is worthless. You'll only pay directly to a publisher you know is at a certain level of quality.

At a past company, I saw our media buyers put in ads at $170 CPM (cost per thousand impressions) for a particularly relevant publisher audience. The advertiser was in financial services, and the publication was uber-niche and uber-influential.

dkl• 15 years ago

There are plenty of exceptions in digital advertising - pre-roll for web video, page takeovers, and other stuff that is unbelievably annoying, since your expectation as a web user is to not be interrupted.

I don't know if I'm unique, but every single time I'm presented with a pre-roll ad, I close the tab I started the video in. 100% of the time. I always wonder if stats on that type of thing are collected and given to the "right" people. (I'm 90% sure they are not, but I thought I'd ask, since you're an expert.)

GlennS• 15 years ago

I wonder if particularly intrusive adverts might have a detrimental effect on a brand.

If I accidentally move my mouse over an underlined word and up pops a video with sound over the top of what I was trying to read, well I certainly feel pissed off with Vibrant Media, and I probably get annoyed enough with the website that I won't visit it again.

I'm unsure if it has any actual effect on the brand though.

TeMPOraL• 15 years ago

I decided not to use Groupon just because of the fact that on one point pretty much every advert on the web featured their pink-colored deals for fast foods. I just got really, really annoyed.

ddlatham2• 15 years ago

If all the dollars spent on these sorts of advertisements end up causing me to spend more dollars on those brands and products, is that a net gain or loss for me? What about for society as a whole?

If it's a loss for me, what can I do to defend against it?

mkr-hn• 15 years ago

Buy less stuff in general, and watch for falling sales funnels.

joshklein10• 15 years ago

Relevant reading: "Influence: The Psychology of Persuasion" by Cialdini.

If you only ever read one book on this stuff, this is the book to read. It is framed around the 6 core psychological principles advertisers leverage, with half the chapter on how to utilize the principle, and half the chapter on how to defend yourself against manipulation of the principle.

But more directly to your question; I think it depends. Was the product you just learned about a pharmaceutical drug that will help improve your quality of life, but that your doctor has never heard of because he left medical school 25 years ago and isn't tapped into current events in this particular field?

It's very possible (and I think, correct) to think of advertising as a net-negative to society. But it does serve the vital function of informing people about things they should know about. It solves problems of information asymmetry.

The startup deadpool is filled with companies that were awesome but nobody knew about.

benofsky• 15 years ago

How is advertising a net-negative to society? Advertising funds many things which are too expensive to produce by themselves: newspapers, tv, movies, etc. You may not _like_ it but it makes possible many things which would otherwise be infeasible.

larrys2• 15 years ago

Oh great. That's the book I don't want anyone to know about.

jacques_chester2• 15 years ago

I second Influence. I used it in sales and the 6 principles were very effective.

(Except attractiveness. I'm just a regular looking guy, plus a lot of my work was telephone sales).

vilhelm_s• 15 years ago

Apparently, seeing an attractive person look at an object automatically makes you like it more [http://meteuphoric.wordpress.com/2009/09/06/subconscious-sta...]. I guess this is part of the reason ads tend to feature good-looking people.

This makes me want to avoid looking at ads as much as possible -- we are vulnerable to manipulation in ways which are completely impossible to defend against.

wccrawford• 15 years ago

Advertising absolutely affects me.

But the thing is, it does it both ways.

Old Spice was mentioned here. They came up with interesting, catchy new commercials. That immediately endeared me to their product.

Other commercials are often (at best) noise or (at worst) insulting of their own customers. I can't count how many times I've seen what was supposed to be a funny commercial, and the idiot in the commercial used the product. Your customers are idiots? Really!? I have never yet bought one of those products.

Not that I bought Old Spice, because I like my current solution. But I did seriously consider it.

dendory• 15 years ago

Ads didn't use to affect me, I use adblock and I rarely watch TV. But lately it seems they find all kind of new ways to send you ads, and I start to remember ads more. My personal policy has always been the same, if I need something, and there's more than one choice, if I recall ever seeing an ad about one company I'll always, always go for the other one. It seems like a natural thing to do, and I bet I'm not alone in that.

The other day I went to buy a lamp and the store had tons of one particular brand that advertises all the time. Of course I went right by those and bought another name I had never heard about, and it turned out to work just fine, and cost less.

So I guess that's why companies that advertise always puzzled me. I mean what's the point? Everyone gets annoyed at watching ads, so why would you want your brand name to be associated with annoying?

I guess I just don't get it.

nitrogen• 15 years ago

I, like you, actively repel the effects of advertising (though I have no doubt that some of it still influences me to an extent). However, if advertising really didn't work, then all products in supermarkets would come in colorless boxes, you'd walk to a touchscreen kiosk and specify your caloric and nutritive needs, preferred foods, organic/vegetarian/vegan/etc. requirements, and the kiosk would produce a list of items that met those requirements, along with prices and an objective evaluation of product quality.

How I wish that were the case! Meal planning and product discovery would be easy. Instead, I eat basically the same things over and over, since as a bootstrapping entrepreneur, I can't afford to throw away much food in the name of exploration. If we could get rid of the patent system that killed Modista (http://k9ventures.com/blog/2011/04/27/modista/), and replace advertising with information, I think my life would be a lot more awesome.

Triumvark• 15 years ago

> U.S. companies would not invest $70 billion (yes, that's the size of TV's ad market) in something they thought didn't work.

Advertisers sell advertising first, products second. It's not implausible to think they are better at the one that pays their checks.

casemorton• 15 years ago

Advertising does work, but it also has other issues being overlooked. For instance, all Geico commercials featuring the Cave Men have made me hate listening to Royksopp. I don't believe that's an effect Geico or Royksopp could have anticipated. Be ready for the affects good or bad if you're the 3rd party in one of these 'viral' ads.

rdouble• 15 years ago

Whenever a catchy "indie" tune hits the top of Spotify, I wonder just how long it has before it becomes a VW commercial or the ending credits of The Hills.

georgemcbay• 15 years ago

Head on, apply directly to the forehead.

Unfortunately that little nugget is stuck in my head for life, but I've never bought the product (nor do I know anyone who will admit to having bought it), so in that sense did the ad really "work"?

onwardly• 15 years ago

Apparently their sales increased over 200% following that commercial.

I'm with you- pissed off that I had to listen to it and avowed to never buy the product. But some people did.

Natsu• 15 years ago

I still get pissed off every time I see homeopathic products (i.e. water sold as "medicine") in the pharmacy, like that "Head on" stuff. It's worse for some things like allergy eye drops where the homeopathic part may be written in tiny print on the package.

If I just wanted to flush my eyes out with water, I'd do that at home for a fraction of the cost. When my allergies act up, I need eye drops with actual medicine in them. And that's when I'm the least able to see well enough to avoid bottles with tiny print.

But Wal-Mart still stocks that crap in their pharmacy. Ugh. Shouldn't they limit it to medicine?

jcizzle• 15 years ago

The only "fact" in this article, the amount of money spent on TV ads, was never supported (read citation). Even if that number is valid, it still doesn't prove that advertising works. The only thing this proves is that advertisers can sell - advertisements to companies.

If I were to argue that advertising works, I'd argue that it affects social proof; no one drives a Mercedes Benz because it is a functionally superior car. In the American market, products aren't purchased on their functionality, but on the social class they put you in. (Would argue a similar argument for non-luxury items, but it'd tl;dr.)

jerf• 15 years ago

If advertising didn't work, than the companies blowing millions and billions on it would be in a million/billion-dollar sized hole vs. their competition, and they would be promptly outcompeted, or cut off their own spending. That they are not is rather strong evidence that yes, it does work, inasmuch as a dollar in ad spending can bring in substantially more than a dollar in revenue.

(No, it is not a sufficient counter argument to say that they just spend because everyone else does; if advertising really didn't work there would no forces holding it up, and a lot of forces pushing it down. If you flipped a switch and made it not work somehow right now, advertising would be gone within a handful of years, if not faster.)

Vandy_Travis2• 15 years ago

What if it's not a binary (advertising works/ doesn't work)? In my view, part of Google's success is they allowed advertisers (as well as self serve businesses) to better measure the ROI from the advertising. In other words, for direct response campaigns, the best option pre-AdWords was through TV. But Adwords really let's you measure your ROI with a granularity not possible with mailers/tv ads.

So direct response campaigns existed before google b/c there was some value holding it up; Google just came along and revolutionized it. That's part of their power from the advertisers POV -- metrics.

Large, nationwide branding campaigns have been effective b/c the entry cost to run one means they are only feasible to large corporations. And those corps have the resources to run the market surveys that are really necessary to evaluate the effectiveness of a campaign. Smaller ad budgets just can't do the followup efficacy measurements.

I definitely think both direct and branding based advertising works. I wonder if Facebook's play will be to revolutionize large branding campaigns, while google focused on the direct response (CPC v CPM, at its core).

malbiniak• 15 years ago

Related: "Ten-Year-Olds Can See Through Advertisers' Tactics"

http://web.hbr.org/email/archive/dailystat.php?date=083111

damoncali• 15 years ago

My six-year-old just informed me that the fruit loops ads are full of it. She said that "they said they taste good, and they DO NOT. They are lying."

My work is done here.

majmun2• 15 years ago

Advertising works in a same way that Nigerian scam works. Because there are minority of people that give money to Nigerian scam.

dlss• 15 years ago

> Because there are MAJORITY of people that give money to well advertised products

FTFY :p

majmun2• 15 years ago

My point that I try to make is that "Advertising works" is nonsense statement (that statement is attempt to advertise itself), and proof given in article therefore also nonsense, Advertising is not true and false kind of thing. (works or doesn't work) Nature of advertising is like tricks . it can be revealed in some moment in time. so advertising must adapt. and it wont work in 100% of cases and all the time.(Proof: go look at advertisments in 50s and look them today, notice any difference?) so it is not 1 or 0 like in computers , but is in scales and dynamic.

corin_• 15 years ago

Did anyone else notice that this article is a pretty poor puff piece? I mean, don't get me wrong, the points it made are pretty much correct, but it just did a terrible job doing so.

Through-out the piece, the key evidence that advertising works was an anecdote that a friend of the author could remember two adverts.

And then, at the very end, almost as if realising "oops I forgot to actually back up any of this with facts" he adds "Access to data that proves their point." Oh well that's good to know, I guess that's settled then.

He could have written it in a "this is what they are trying to do" way, or if he really wanted this "I can show you that it works" then he should have actually proven it, not suggested it and then waved his hand in the air muttering "see I told you" under his breath.

Why Advertising Works, Even When You Think It Doesn't

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