Atomic Direct, LTD

There’s nobody easier to sell to than other salesmen. Unless, of course, you’re promising a consumer revolution to advertising agencies. Then, stand back and let the stampede commence!

I was reminded of this recently by the promotion for a communication conference. It opens as follows:

THE GREAT DISRUPTION – The consumer strikes back. 

For decades new technologies and media consolidation overwhelmed viewers and readers with new platform options, countless channels, confusing dials, settings and features no one asked to get. Now, the ’disrupted’ consumer is the one disrupting old media and ad institutions. The agency is scrambling to remain relevant in a world where consumers ignore ads and work their social networks to make decisions. They are fleeing the desktop for mobile media faster than content and marketers can keep up. Their love of time-shifting and multi-screen multi-tasking has attracted a mob of tech, media and digital companies all skirmishing for their attention as all platforms seem to converge in the living room. Technologies are no longer the great disruptors; the consumer is.

Recent email promoting the Online Media Marketing Association conference

Sound familiar? It should. It reflects group think found in many corners of the advertising biz and featured in a recent Fast Company article. Sadly, this group think is rampant among people who are paid enough that they should know better.

It seems to me, though, that ideas like this get their power in the advertising industry because agencies dislike the idea that they are selling things. All this “power to the consumer” and “consumer revolution” group think seems to be popular because it is anti-salesmanship.

It doesn’t matter that the ONLY reason that their jobs (advertising roles) exist is to help companies sell things to their consumers. It doesn’t matter whether we are in brand advertising, social media, online content creation, retail, display, outdoor or hard core direct response – everything we do is about selling goods to people.

Perhaps this reality is too hard to accept when you have an elite training at an art or portfolio school. Not liking the reality, it’s much nicer for a 20-something (or 40-something) to get excited about some nearly utopian mythology implying companies who become social butterflies will see their goods whisked off the shelf. (These theories usually help agencies make themselves rich while accomplishing little for their clients.)

My tendency is to respond with a tough message: Deal with it or get out. Truth is, you shouldn’t be in advertising unless you are dedicated to selling goods (today or in the future).

That doesn’t mean we’re sharks – it means we know our value to our clients. What advertising does is important and valuable – to people, to consumers, and to the economy. Our work creates jobs at companies (desperately needed jobs) in manufacturing, engineering, accounting, and more. Our work helps connect consumers with products they love. Well executed, our work builds a strong foundation for companies to thrive.

Of particular interest, the claims in the OMMA statement flat out aren’t true. So, for anyone who wants, I’ve posted a line-by-line deconstruction of the comments.

Why write all this? Advertising is important work to the country and our economy. It deserves better than this AdBuster-driven self-loathing.

Copyright 2011 – Doug Garnett

There’s nobody easier to sell to than other salesmen. Unless, of course, you’re promising a consumer revolution to advertising agencies. Then, stand back and let the stampede commence!

I was reminded of this recently by the promotion for a communication conference. It opens as follows:

THE GREAT DISRUPTION – The consumer strikes back. 

For decades new technologies and media consolidation overwhelmed viewers and readers with new platform options, countless channels, confusing dials, settings and features no one asked to get. Now, the ’disrupted’ consumer is the one disrupting old media and ad institutions. The agency is scrambling to remain relevant in a world where consumers ignore ads and work their social networks to make decisions. They are fleeing the desktop for mobile media faster than content and marketers can keep up. Their love of time-shifting and multi-screen multi-tasking has attracted a mob of tech, media and digital companies all skirmishing for their attention as all platforms seem to converge in the living room. Technologies are no longer the great disruptors; the consumer is.

Recent email promoting the Online Media Marketing Association conference

Sound familiar? It should. It reflects group think found in many corners of the advertising biz and featured in a recent Fast Company article. Sadly, this group think is rampant among people who are paid enough that they should know better.

What’s most concerning, though, is that ideas like this only get their power in the advertising industry because so many agencies really despise the idea that they are selling things. All this “power to the consumer” and “consumer revolution” group think is popular because it is anti-salesmanship.

It doesn’t matter that the ONLY reason that their jobs (advertising roles) exist is to help companies sell things to their consumers. It doesn’t matter whether we are in brand advertising, social media, online content creation, retail, display, outdoor or hard core direct response – everything we do is about selling goods to people.

Perhaps this reality is too hard to accept when you have an elite training at an art or portfolio school. Not liking the reality, it’s much nicer for a 20-something (or 40-something) to get excited about some nearly utopian mythology implying companies who become social butterflies will see their goods whisked off the shelf. (These theories usually help agencies make themselves rich while accomplishing little for their clients.)

My tendency is to respond with a tough message: Deal with it or get out. Truth is, you shouldn’t be in advertising unless you are dedicated to selling goods (today or in the future).

That doesn’t mean we’re sharks – it means we know our value to our clients. What advertising does is important and valuable – to people, to consumers, and to the economy. Our work creates jobs at companies (desperately needed jobs) in manufacturing, engineering, accounting, and more. Our work helps connect consumers with products they love. Well executed, our work builds a strong foundation for companies to thrive.

Of particular interest, the claims in the OMMA statement flat out aren’t true. So, for anyone who wants, I’ve posted a line-by-line deconstruction of the comments.

Why write all this? Advertising is important work to the country and our economy. It deserves better than this AdBuster-driven self-loathing.

Copyright 2011 – Doug Garnett

There was a post on Retail Wire this morning that pondered whether retailers will need traditional research once mobile tracking is “in place”. The question is interesting because it reveals a very common flaw in how people think about research.

Developing conclusions from mobile data is the equivalent of scientists reading the fossil record. When I was a kid, scientists had been observing the fossil record for hundreds of years. So, they really thought they knew what the truth was. Dinosaurs were reptiles, they had reptilian skin, they were cold blooded, lived isolated lives, and modern day lizards are their direct descendants.

Fast forward to 2011. I’m no paleontologist. But it’s my understanding that fossil prognosticators now believe that some (many) dinosaurs had feathers, that some (many) were herd animals, they were pretty fast moving, that some lived in family based units, and that birds essentially evolved from dinosaurs.

The original scientists weren’t bad at their jobs. In fact, they were brilliant. The problem was in the observed data. They created solid, grand theories from the observed facts they knew.

The Key to Observed Behavior is What You Can’t Observe. Paleontologists erred in their theories because there were thousands and millions of fossil truths they couldn’t see – they hadn’t yet been discovered or analyzed.

Mobile data puts us in a similar spot. Ethnographic observers are in a similar bind as are direct marketers who rely purely on response. No matter how hard we work, observational research misses more data about human consumers than it captures. And without that data we mis-lead ourselves into error.

What’s fascinating is that as we create grand unified retail theories from this data, behavioral data becomes a type of departmental Rorshach test. Your company is likely to project onto the research the things that help individual careers. Or, it may project the results of your latest session with a highly paid consultant. What’s least likely is that it finds actionable consumer truths.

Wise companies will continue to rely first and foremost on data that helps us see motivation because motivation is the key to changing profit in big ways. Of modern research, its not just mobile that lacks insight into motivation. True “ethnographic research” is purely observational and is quite weak at discovering things that drive sales. (Perhaps that’s why so many firms claim to do ethnographic research but really do in-home one-on-one interviews).

To get to motivation, you have to use qualitative research of some form. It has to be executed by professionals. And it has to be interpreted with all the best care to avoid similar theoretical jumps to the errors noted above. But somehow, I find the challenges in qualitative data much more evident where the errors in things like mobile data are dramatically more insidious.

At the same time, I’m not suggesting we ignore the mobile opportunity! Mobile data offers opportunity for some fun and interesting bits of learning about store organization. But mobile data is limited and, even considering only in-store behavior, I’d probably get considerably more value from Paco Underhill-style teams of in-store observers.

Copyright 2011 – Doug Garnett

There was a post on Retail Wire this morning that pondered whether retailers will need traditional research once mobile tracking is “in place”. The question is interesting because it reveals a very common flaw in how people think about research.

Developing conclusions from mobile data is the equivalent of scientists reading the fossil record. When I was a kid, scientists had been observing the fossil record for hundreds of years. So, they really thought they knew what the truth was. Dinosaurs were reptiles, they had reptilian skin, they were cold blooded, lived isolated lives, and modern day lizards are their direct descendants.

Fast forward to 2011. I’m no paleontologist. But it’s my understanding that fossil prognosticators now believe that some (many) dinosaurs had feathers, that some (many) were herd animals, they were pretty fast moving, that some lived in family based units, and that birds essentially evolved from dinosaurs.

The original scientists weren’t bad at their jobs. In fact, they were brilliant. The problem was in the observed data. They created solid, grand theories from the observed facts they knew.

The Key to Observed Behavior is What You Can’t Observe. Paleontologists erred in their theories because there were thousands and millions of fossil truths they couldn’t see – they hadn’t yet been discovered or analyzed.

Let’s get honest about how little we can truly learn from mobile data. No matter how hard we work, pure observational research misses a HUGE amount of learning that is critical to increasing profitability. And without that data we mis-lead ourselves into erroneous conclusions.

Then, as we create grand unified retail theories from this data, its my experience that behavioral data becomes a type of departmental Rorshach test. Your company is likely to project onto the research the things that help individual careers. Or, it may project the results of your latest session with a highly paid consultant. What’s least likely is that it finds actionable consumer truths.

And so, wise companies will continue to rely first and foremost on data that helps us see motivation. Because motivation is the key to changing profit in big ways. (At the same time, bring on the mobile! Mobile data offers opportunity for some fun and interesting bits of learning about store organization – although I’d probably get much more from Paco Underhill-style teams of in-store observers.)

Please, let’s ignore this impulsive idea that mobile tracking is any more valuable than traditional data. The long term retail winners will continue to be those who best know how to learn from research then have good judgement in the actions they take.

Copyright 2011 – Doug Garnett

Massive misperceptions lead industries into poor choices. But industry politics make people hesitant to call out those mis-perceptions – sometimes for fear of losing future work; at other times because its easier to go along with the crowd; and most often because it’s hard to find the courage to remind the world the sky is blue when “everyone” else says it’s orange.

Today’s topic of untruth is found in this line from a recent guest article on Media Post:

“In TV, you are forced to stop enjoying content in order to watch several minutes of ads. On the Web, the ad experience is more integrated and more targeted.”

Does anyone really believe this? Any honest look will tell us that the web may be the noisiest ad environment in history of mankind. And while it may be targeted, that doesn’t mean it’s any less offensive.

Web advertising regularly interrupts our enjoyment of content. On the commercially very successful HuffingtonPost, it’s random whether a new page you visit will pop down several screen inches then back up seconds later as aggressive top of the page banner ads expand.

On most news sites, pop up windows are a constant irritation. On more technologically advanced websites, ads expand and contract (apparently randomly) as you move your cursor around the page. If we choose to view a web video, we have to put up with pre-roll ads. And now we even have to fight new types of banner ads that take over the page we’re viewing and force us to click out of them or wait for them to finish.

I’d sure love to find the web utopia that guy was writing about. It sounds a whole lot better than the web we have.

Commercial messages even interrupt our enjoyment of social media. Friend a company and you’ll have to put up with their feeds on Facebook. (But isn’t Facebook most heavily used for, well, human friends? It is, after all, a social medium.)

But even worse, in social sites, companies design viral video’s to sucker people into friending their commercial endeavor, then bombard them with commercial messages. Ah, the fundamental dis-honesty of new media.

And if you have Gmail (or similar “free” services), commercial messages regularly interrupt your privacy. I went to a Google presentation here in Portland recently. The presenter proudly discussed how, after he had moved here and emailed with his wife about their car, their GMail immediately featured ads from the local auto dealer. Yikes. I think we’ve finally found Eric Schmidt’s “creepy” (and people at the tables around mine thought so, too).

Are online advertisers desperate? This aggressive interruption on the web suggests that advertisers are desperately searching for impact. And the latest news confirms they might be.

Google is desperately searching for TV ad revenue because their other online sources just don’t have enough growth to make the stock market happy. And just last week Best Buy announced that they were returning to advertising on TV because they hadn’t been able to drive their mass business from the web.

So what about this whole issue of respect? I strongly advocate respect – real respect. But the respect that matters most is the respect between the company and their consumer. Over the past 20 years I find that agencies have developed an intense disrespect for their true consumer. And I believe clients are beginning to realize how ineffective their ads have become as a result.

Many ad agencies or creative teams no longer believe consumers want to know about products and the information needed to make intelligent choices as they shop. Instead, agencies focus first and foremost on “entertainment” and end up delivering little consumer value. It doesn’t matter if you’re using the oldest of the old media or the freshest of the new, this type of advertising will offend the consumer.

And what about the web? Truth is that the web should be much more powerful than it has become. It’s only by challenging these fallacies that we can make it so.

Copyright 2011 – Doug Garnett – All Rights Reserved.

In my introductory ad classes, students review two ad articles each quarter. And from the very first class I taught in January of 2001, an overwhelming number of reviews have extolled the glory of highly targeted advertising on the web.

These articles described a virtual eden – where advertising’s power is increased because ad dollars are spent only on communication with those who care. Just imagine, they say, targeting by interest, by their browsing history, by online purchase history, by selection of keywords in the past 10 years, and perhaps even by the genetic make-up of the consumer’s children

Ten years later, how is Eden?

The answer is decidedly “mixed”. First, response rates to web advertising are horrible. I was reading a book bemoaning how studies show that “only” 16% of TV viewers get the branding from a typical spot (although good creative makes it much higher).

Hmmm. So 1 out of every 6 people watching TV at that time both see the spot and remember the brand. That’s actually quite astonishing when compared with clickthrough rates. See, in CTR’s it’s considered good if you get one click for every 500 times the ad is presented (That’s a .2% rate).

Yikes. My agency creates TV campaigns that have gotten one out of every 200 viewers to PURCHASE from our direct response television ads! But it’s not just TV. Even today, direct mail typically gets one response for every 100 presentations (note that a response is much more significant than a throw-away click).

But a click is a throw-away thing – cheap and easy for a browsing consumer to give. Marketing fundamentals would suggest that if web advertising carried any value to consumers, response rates would be much, much higher – probably 10% or 15% instead of .2%. Clearly, something is broken.

And so, Adam and Eve fall prey to the serpent of “discounting”. Before anyone complains, I’m quite aware that the end cost is quite important and web clicks are very cheap so maybe it all evens out. (Maybe.)

Problem is that a strong industry typically doesn’t work this way. The more highly targeted the media, the more you should be able to charge for the media access. With the web, it’s almost the opposite.

And it all gets worse in social media. (I wrote recently about how average Facebook advertising CTR is 1 click for every 2000 presentations.)

So what? Clearly, the web’s targeted perfection doesn’t correspond with better effectiveness. But I don’t have the full answers for what this means – and nobody else does either. Let’s just walk through what we know about this issue:

- Once more, the hype used to foist the web onto advertisers isn’t supported by reality.
- Not only does it not jive with reality, but it falls very far short of what we should have expected.
- Web media outlets have dropped prices into the bargain basement and they can afford to because their sub-structure is pretty cheap.

This leads me to two important questions for future consideration. First, can web’s micro-audiences really be used to substitute for mass advertising? And secondly, why isn’t anyone talking about this as a problem?

Copyright 2011 – Doug Garnett – All rights Reserved

In my introductory ad classes, students review two ad articles each quarter. And from the very first class I taught in January of 2001, an overwhelming number of reviews have extolled the glory of highly targeted advertising on the web.

These articles described a virtual eden – where advertising’s power is increased because ad dollars are spent only on communication with those who care. Just imagine, they say, targeting by interest, by their browsing history, by online purchase history, by selection of keywords in the past 10 years, and perhaps even by the genetic make-up of the consumer’s children

Ten years later, how is Eden?

The answer is decidedly “mixed”. First, response rates to web advertising are horrible. I was reading a book bemoaning how studies show that “only” 16% of TV viewers get the branding from a typical spot (although good creative makes it much higher).

Hmmm. So 1 out of every 6 people watching TV at that time both see the spot and remember the brand. That’s actually quite astonishing when compared with clickthrough rates. See, in CTR’s it’s considered good if you get one click for every 500 times the ad is presented.

Yikes. My agency creates TV campaigns that have gotten one out of every 200 viewers to PURCHASE from our direct response television ads! But it’s not just TV. Even today, direct mail typically gets one response for every 100 presentations (note that a response is much more significant than a throw-away click).

But a click is a throw-away thing – cheap and easy for a browsing consumer to give. Marketing fundamentals would suggest that if web advertising carried any value to consumers, response rates would be much, much higher – probably 10% or 15% instead of .02%. Clearly, something is broken.

And so, Adam and Eve fall prey to the serpent of “discounting”. Before anyone complains, I’m quite aware that the end cost is quite important and web clicks are very cheap so maybe it all evens out. (Maybe.)

Problem is that a strong industry typically doesn’t work this way. The more highly targeted the media, the more you should be able to charge for the media access. With the web, it’s almost the opposite.

And it all gets worse in social media. (I wrote recently about how average Facebook advertising CTR is 1 click for every 2000 presentations.)

So what? Clearly, the web’s targeted perfection doesn’t correspond with better effectiveness. But I don’t have the full answers for what this means – and nobody else does either. Let’s just walk through what we know about this issue:

- Once more, the hype used to foist the web onto advertisers isn’t supported by reality.
- Not only does it not jive with reality, but it falls very far short of what we should have expected.
- Web media outlets have dropped prices into the bargain basement and they can afford to because their sub-structure is pretty cheap.

This leads me to two important questions for future consideration. First, can web’s micro-audiences really be used to substitute for mass advertising? And secondly, why isn’t anyone talking about this as a problem?

Copyright 2011 – Doug Garnett – All rights Reserved

Overnight ratings for the Superbowl are in – and they’re outstanding. (Click Here.)

Of course, this suggests that when internet TV enthusiasts tell us about huge groups of people “cutting the cable” they’re really trying to cash in their venture investments. Because there are apparently enough cables still connected that the 2011 Superbowl had more viewers than any TV show in history (111 million of them) AND appears to have had a 71% share – watched by over 2/3rds of all televisions turned on at the time.

Let’s use this as a starting point to think a bit more about what Connected TV theorists are claiming right now – namely that we can throw out existing TV with its cable pipeline. (NOTE: A comment from Peter reminded me that this Superbowl was available without cable on Fox network affiliate broadcast feeds. Correction appreciated. And I don’t think this fundamentally changes much. Those feeds are a by product (today) of the strong cable distribution in the US. Change that cable distribution and the economic support for sports broadcasting changes.)

Mass Market or Fragmentation?

As I noted in a recent post, the internet is a tremendous tool to reach tiny shards of audiences. Because online, people scatter to the ends of the web.

But the Superbowl showcases TV’s ability to reach the masses quickly. In fact, TV drives mass communication – the web doesn’t. The web’s inherent strength is fragmented communication.

Note that for all the claims that Facebook and Twitter drove awareness of the recent Egyptian demonstrators, it took 24 hour coverage on the TV networks as well as newspaper front pages to generate broad awareness. (Note that TV coverage of Egyptian demonstrations has given CNN it’s highest ratings in years.)

If All TV Arrived Via Internet, Would There Be a Performance Issue?

These Superbowl numbers also make me wonder if scattering on the web isn’t critical to good web performance. We know the web breaks down under high use. For example, yesterday I attempted to look up some information from Fergie’s online bio’s during the halftime performance. What % of the TV audience was I competing with? .05%? But EVERY site had crawled to a stop.

Would there be a performance issue trying to broadcast the Superbowl ONLY over the web? I’m not a tech guru enough to know. But, here’s the problem: When 50 million US households want the same HDTV programming at the same time, the cable pipe seems to be a much more convenient distribution mechanism than the internet.

There are clever staging, cacheing, and other network load management things that can be done for a predictable event to attempt to maintain performance for something predictable like a Superbowl. Maybe they’re enough. But what about when an unexpected event like 9/11 happens (god forbid it happens again)? Would we be able to get good coverage? News sites already slow down when a gas main explodes in New York.

Sports Are Critical to Americans

Sports are a good place to consider this issue because technologies can be made to live by offering new sports options (DirecTV). Or they will die without it (we’ve forgotten the names of all those interactive TV efforts that were meaningless).

American’s won’t put up with a Superbowl where the action looks and feels like a satellite report from Afghanistan. Sure hope someone’s got this figured out before VC money pays to mount the effort to destroy cable TV.

Copyright 2011 – Doug Garnett

Don’t you hate it when facts interfere with a good story? That must be the way Facebook feels today. Scoop is, somebody cared enough about where their money was going to take a hard look at the effectiveness of Facebook ads.

A dedicated Facebook user’s response just might be “Ads? They have ads on Facebook?”. (Yup, those clusters of 20 words or so that clutter the right hand side of the page – sometimes with microscopic images attached.)

And, that’s exactly the problem. We now learn that the clickthrough rate on Facebook ads is .051%. (Here is a summary of the study by Webtrends.) To be clear, that’s 5 one-hundredths of a percent. Or, one click through for every 2000 times your ad is displayed.

Heck, maybe this rate is pretty good since your ad is probably only noticed once out of every 1999 times it’s seen. But it is scary that this clickthrough rate is DOWN. That’s right, the click-through rate was an astronomical .063% in 2009.

And, there’s one more key concern. Facebook ads should be highly targeted – only put on pages of people whose profile indicate the ads should interest them. So your highly targeted ads have a click through rate of five-hundredths of a percent. Yikes.

A Serious Issue

A few years ago an article in Advertising Age noted that it used to be a measured fact that we’d see an average of 500 or so commercial messages in a day and remember one or two. But, we are now confronted with an average of 2500 (or more) messages a day of which…we still only remember one or two.

My analysis? New media has fragmented messages to the point where consumers don’t care about them or pay attention to them. Instead, we bombard consumers with millions of tiny attacks hoping, I suppose, to wear them down.

And that trains consumers to ignore us at higher and higher rates – like what has happened to Facebook.

Facebook’s Value Isn’t as Advertising

Internet advertising has proven extraordinarily weak at reaching out to people who aren’t already interested in your product. These numbers merely confirm what’s always been true elsewhere.

That doesn’t mean I think Facebook isn’t useful to advertisers. Instead, this indicates pretty clearly that advertising on Facebook conflicts with the reasons that we join Facebook as individuals.

At the same time, it’s all about price with this type of advertising. If you’re paying the right price for displaying your ad to 1999 people, then you’ve paid the right price for that 2000th who clicks. Maybe despite these miserable rates you can eke out a living with these Facebook ads.

But if you want your business to thrive, Facebook’s generally not the place to build it. To make big change happen, you need to leverage off-line advertising. Then once people know why they should seek you out, there’s a plethora of options for using the internet, retail, and other channels to lead consumers to purchase.

Copyright 2011 – Doug Garnett