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An Interesting Approach to Advertising

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” John Wanamaker’s famous quote certainly has more than a grain of truth to it.

One of the ways companies attempt to get the most advertising bang for their buck is by trying out different advertising strategies. Obviously, depending on the strategy, the execution, the targetting, etc, these have varying degrees of success. Some will be repeated time and time again – by the same company and by competitor organizations; others will be deemed unsuccessful and fall by the wayside.

A slightly unusual strategy is being tried by popular North American lager brand Sam Adams. Rather than highlight the strength of its brand name, it is actually emphasizing how small a market share it has. Is this is clever way of saying that they’re a national brand but have all the strengths associated with a locally-brewed product? Or is it commercial suicide? The article below, published by AdAge at the start of this month, makes an interesting read:

Sam Adams Wants to Show You Just How Small It Really Is

Brewer’s New Ads Aim to Separate It From Big Brands by Pointing Out Lack of Market Share
By Jeremy Mullman

Samuel Adams Boston Lager marketer Boston Beer Co. is pushing an unusual selling point in new ads: Its own insignificance. In a spot titled “Growing Up Small” from the brewery’s longtime agency, Octopus, it sets out to dispel the notion that it accounts for a significant portion of U.S. beer sales, asking drinkers in a series of documentary-style interviews how big they think Sam Adams’ share is.

Twenty-five percent, guesses one. Huge, says another. At that point, the brand’s actual market share flashes across the screen: 0.9%.

It’s not every day companies spend their media budgets heralding their general puniness, but it’s not a good time to be a major player or seen as one in the beer industry. Virtually every premium brand with the scale to be perceived as mainstream—Budweiser, Bud Light, Coors Light, Miller Lite, Corona Extra and Heineken Lager—saw sales declines last year, and Samuel Adams—while boasting a fraction of those brands’ total sales—is nearly as ubiquitous.

A Boston Beer spokeswoman declined to comment, citing a company policy of not discussing advertising (because, after all, what could be a bigger secret than the messages you spend millions of dollars to broadcast to millions of people?). And in Boston Beer’s case, it spent nearly $30 million on measured media last year, according to Kantar Media.

But the conundrum is apparent enough. In the same way brands such as Heineken and Corona have struggled to avoid the “my father’s import” label amid a sea of new import offerings such as Stella Artois, Modelo Especial and Dos Equis, Sam Adams finds itself struggling to retain its relevance in a world where the number of craft-beer options has increased exponentially.

Plus, it’s hard to be the little guy when your shares are traded publicly on the New York Stock Exchange (albeit with a market cap of less than $740 million, which we admit is a tad smaller than Anheuser-Busch InBev’s $81 billion.) “They no longer have that boutique aura,” said veteran alcohol marketer Arthur Shapiro. “They want it back.”

Regardless, sales of Samuel Adams have held up reasonably well to this point. Boston Beer recovered from a weak first half to eke out a 1% increase in shipments during 2009, thanks to a second-half surge that has apparently continued into 2010. Through February, the brewer said its shipments were up 9% vs. the year-earlier period.

 
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How Important is Advertising?

How much of the money spent on advertising is wasted? Although it’s a very difficult question to answer, advertising research goes a very long way towards measuring and tracking over time the effectiveness of any ad campaign.

However, according to a new study by Satmetrix, only 2% of consumers trust advertising the most as a source of information when choosing a product or service. Almost half (49%) of respondents feel personal recommendations from family, friends or colleagues is the most trustworthy source of information. While this statistic is not surprising – word-of-mouth recommendation has always had an extremely positive impact – it is maybe a little surprising that so many more people (15%) find opinions posted online as that much more reliable than the 2% who trust advertising. While online message boards, forums, etc are meant to be an independent source of opinion, many people are skeptical as to how unbiased they often really are.

The study, in fact, claims that some companies are wasting billions on attracting new customers through advertising when their focus should really be on keeping their existing customers happy. According to the study, poor customer experience has forced more than 10 million consumers to switch suppliers in the past six months.

The principal cause of dissatisfaction to the point of switching is unfair fees or charges. A further 22% blame poor product or service quality. 19% move because of rude of disinterested employees. And, 12% leave because they feel they can’t get anyone to deal with their problem.

Read more about this subject in our white papers and articles:

• Making Your Ads Work Harder
• Loyalty – How To Win Devotion From Your Customers
• Customer Satisfaction Surveys

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What, No More Football?

Reflecting on a month of non-stop football coverage, Alex Clements this week mulls over the effectiveness of high profile advertising and sponsorship.

The World Cup is now over and things are, once again, returning to normal. Wives get their husbands back, kids get the right to watch TV back and the men are in recovery for another four years until the next World Cup. I will confess, I’m not a huge fan of grown men kicking a ball around a pitch (I’d rather watch grown men beat the life out of each other in a cage!). I did, however, watch a few games of the World Cup, including the England vs. Germany game, which was an interesting one to watch with Vanessa, my fiancée who, just to make things more interesting, comes from Wuppertal in Germany!

Despite not really caring who won the World Cup, I found myself subconsciously supporting Spain in the final. The only reason I can think of for this is that I quite like visiting Spain on my holidays. The least I can do is support their football team in return for their hospitality.

I’m quite easily distracted at times and my mind can wander to a vast array of weird and wonderful things. The example I’m going to share with you on this occasion came to me during this football (or “soccer” for those of you in the US) match between Spain and the Netherlands. As I watched the ball go back and forth between opposing players – and on occasion directly from one goalie to the other – my mind wandered as I noticed the multitude of banners advertising different companies around the pitch. There were banners for Adidas, Sony, Coca-Cola, McDonald’s and Budweiser to name a few. I sat there and wondered to myself, “How effective are these adverts?”

I decided that some of these adverts must be more effective than others when using this platform to reach their target market. I praise the strategic placement by Adidas because it is a company that manufactures sports clothing, which is likely to be of interest to a considerable percentage of football fans who will be watching. Similarly, people watching the game on TV at home or in a public bar could see the banners for Budweiser or Coca-Cola and as a result think “I could really do with a Budweiser!” – just as I did! Unfortunately, however, I was sitting at home with no access to any Budweiser… Of course, this is the aim of the banner and I’m sure it works quite effectively.

In my mind, I compared the effectiveness of the ‘drinks’ banners to that of ‘electrical goods’ banners which have used the exact same method to reach their target market. Let’s first think about the platform for advertising here: The World Cup final. A quick search on the internet suggests there were over 18 million viewers in the UK watching the game on British television. Before the game took place, FIFA expected an audience of 700 million worldwide to watch the final. Even if viewers turned out to be significantly fewer than this prediction, it would undoubtedly still reach a considerable number of potential customers. As a means of embedding your brand in the minds of your target market, I say this is a very effective way to reach millions globally.

Maybe the decision to advertise in this way would be more straight-forward for companies such as Coca-Cola as they are presumably targeting anyone who drinks liquid – which I shouldn’t need tell you is a pretty high percentage of the world’s population! However, for companies that specialise in electrical goods – which are not necessities of life (don’t tell my fiancée I said that) – as high value and infrequent purchases, from a consumer point of view there is more at stake and a bigger purchase decision to be made. Such companies must assess who they are targeting and who they would reach by each method of advertising before deciding on a platform.

At first, I questioned whether electrical goods companies would see as much return on investment as drinks companies would. Will people see these banners and think, “I could really do with a new TV”? My guess would be that the need for a beer would come before the need for a new TV, but then again, I was watching the game in high-definition on a 40-inch screen! Despite this, this approach still does the job of raising awareness and embeds the brand in the minds of millions. Not bad for something as simple as a banner with your logo on, is it? Not that a pitch-side banner at the final of the World Cup will be within every company’s budget, mind!

I’ll leave you now with one final example, which truly shows how effective advertising and sponsorship can be. Domino’s Pizza sponsored television coverage of the World Cup and Britain’s Got Talent, and it has been reported that the company has seen sales rise to 237.1 million – an increase of 21% in the last half year leading up to June 27, making a £17.5m pre-tax profit. Even more impressive, sales were said to have been up 65% on the day of England’s only World Cup win, increasing by a whopping 333% during the hours the match was shown! To find out more about Domino’s recent successes, click here to read Domino’s Pizza Plc Half Yearly Report.

• If you would like to find out more about measuring and monitoring the effectiveness of advertising, please click here.

Posted in Advertising Research, Alex Clements, Marketing, Marketing Strategy, Return On Investment, ROI, Sponsorship, Sport, Thursday Night Insight |
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World Cup Advertising: Louder and Longer, But Will It Last?

For this week’s Thursday Night Insight, Oliver Truman kicks off with B2B’s first World Cup-related blog post of the summer.

Well, it’s almost here. And don’t we know about it.

The 2010 Football World Cup is upon us, and everyone’s got their knickers in a twist. Cue endless speculation about who’ll be in each nation’s team. Cue furious flag waving and shows of unbridled patriotism that would otherwise cause a diplomatic incident. Cue four weeks of shouting at the television. Cue the inevitable Thursday Night Insight analysis of what this all means.

I’m sorry to go all “grumpy old man” on you here, but is it me, or does the run up to the tournament feel like it’s been over-done this time around? Like Christmas, the speculation and hype around the competition (and England’s ritual, quadrennial shaming in a penalty shootout) seems to begin earlier and earlier every time. The adverts get brasher, longer and more stomach-churningly jingoistic, and this year appears to be no exception.

I am perhaps in danger of exaggerating my ennui at the situation, however. From a cultural and marketing point of view, events like the World Cup are fascinating insights into what advertisers try to do to switch us on.

At least from a UK perspective, the theme in this year’s World Cup advertising – like Maradonna in the late 1990s – appears to involve an excess of everything. The recipe for a successful commercial, it would seem, is as follows:

• Feature celebrities and other well-loved national figures in barrow-loads: There’s no better example than the current Carlsberg advert. Beefy Botham, Phil “The Power” Taylor, Jeff Stelling and Ranulph Feinnes are but a few of the luminaries spouting words of wisdom in what the lager brand describes as “probably the greatest team talk in the world”. Burger King are even running a promotion where the first “prize” is to “Watch the final with Jimmy Greaves” with three of your friends and a Whopper.
  
• Find any way of making your product patriotic, no matter how tenuous. A play on words helps: KitKat have done this by suggesting that England fans should “cross their fingers” and hope for the best. Get it? “Cross your fingers”… Like you’d cross fingers of chocolate-covered biscuit. Here’s a picture just in case you’re struggling to understand the duality of meaning here:

  

• Make it viral: Plaster the thing on Facebook, YouTube and Twitter before you put it on television. Nike did this with their global “Write the Future” campaign and 12 million (and counting) views on YouTube is testament to the interest and awareness levels that social media can generate.

  Also critical is incorporating some interactive element to the campaign – For instance, both Nike and Carlsberg encourage fans to upload films of themselves playing or giving a team talk.

• Make it really, really long: The premiere of the campaign is the big chance to show the full, unexpurgated version of the advert. Appropriately, the musical backing to the Nike ad is Hocus Pocus by Dutch progressive rock stalwarts Focus – a genre noted for its temporal excesses.

• Make it meta: “Self referencing”, “Post modern”, “Reflexive” – call it what you will. There must be a snarky, clever, knowing element to your campaign. In the case of the Nike ad, the premise appears to be “Look what the modern media has done to us! Our idols can be built up, only to be knocked down and crushed in an instant by a moment of misfortune on the pitch! How fickle we all are!”. Even so, we all know that marketing like this is part that very-same building up and knocking down process.

• Don’t forget the oldies: Some brands have actively chosen to stand aside from the thrusting, testosterone-fuelled frenzy of it all, and have taken a folksier, down-to-earth approach. Think former managers Terry Venables and Graham Taylor depicted in an old people’s home, or England’s legends of 1966 flogging suits.

At its heart, all of this jostling for position comes down to achieving awareness and interest in brands during a key time in the calendar for advertising. When all around you are shouting, shouting louder, longer and with bigger laughs is central to securing a share of voice.

Of course, investment of this sort in marketing cannot come without accountability. Marketers must use research to understand the impact that advertising has had – Not just in terms of whether more beer, trainers or televisions have been sold, but also whether people’s longer term disposition to brands have been enhanced or damaged.

Pre and post-campaign studies are one way of tracking brand health, but so too is tapping into what wags in the blogosphere, in forums and on Twitter have to say (not Wives and Girlfriends, by the way – the other meaning). Mining this publicly-available seam of insight is an emerging technique in consumer markets, and the world of business-to-business could well follow.

Like a World Cup advert, I think I’ve gone on long enough, but I’ll leave you with a prediction for the tournament. We can all then come back here in a month’s time and guffaw at how wrong I was. Argentina to win it – not least because they’re my selection in the office sweepstake.

Posted in Advertising Research, Commercials, Marketing, Oliver Truman, Sport, Thursday Night Insight |
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Does Advertising Work?

In this week’s Thursday Night Insight, Paul Hague argues vehemently – once again – that advertising can and does work.

What is it about me? My evenings with friends often end up in heated discussion. For some reason, they associate me with all the sins of the marketing world.

-     “You people are terrible for persuading us to buy things we don’t want.”

-     “You people are responsible for profligate consumption and wasting the world’s resources.”

-     “I don’t know who ever buys branded products – I never do on principle – you are just paying for the brand.”

I defend my corner as best I can, explaining that our work is measuring and analysing the effect of marketing while others are responsible for implementation. However, these arguments always leave me feeling defeated as the debates rage endlessly on and, I suspect, with little change of the protagonists’ views. However, I take no offence. Why should I? These are real questions for our profession.

So, it was no surprise the other weekend when we were entertaining some friends and a heated discussion flared about the effect of advertising. The arguments flew back and forth with the speed of a ping pong ball in the hands of the China Olympic team.

-     “Advertising is such a waste of resource. No one takes any notice of it.”

-     “Oh yes they do. We can measure how many people have seen adverts and track if they have bought the products.”

-     “Well that may be so for some people but no one I know takes any notice of adverts and I certainly don’t.”

As usual we got nowhere, which meant that as usual I felt that I had lost. And, all the while, Alfie, my aging boxer dog, was getting agitated and asking for a walk. We packed up the discussion and headed off down the lane.

We live on a lane that drops down for half a mile through woodland until finally it reaches a farm and the River Goyt, at which point it stops and becomes a footpath. In other words, it is a peaceful sort of lane with limited traffic made up of a few cars, bikes and walkers. It is not your average high street. It is definitely not somewhere that an advert would reach thousands of people.

We hadn’t walked for more than five minutes when my friend spotted a small notice, looking very water sodden despite being encapsulated in plastic, and fastened to a tree. It was a pathetic attempt to communicate and my friend was quickly engaged

-     “Oh look Paul, someone has lost their kitten. See here, there is a picture. We must do something, they will be heartbroken.”

And on and on she went.

-     “Yes, I know. I have seen the poster but the cat isn’t around here, of that I am sure. Also, you will see that they lost it in November and it is now April. I would have noticed the cat and anyway, if I hadn’t, Alfie would have.”

(I didn’t point out that the unfortunate cat would have ticked off another of its nine lives if it had had the misfortune of confronting my canine friend.)

I suppose I was still bruised from our earlier discussion in which I had got nowhere and thought I would try and extract some bonus points.

-     “See, I told you that advertising works. You say you never take notice of adverts and here you are looking at an advert, taking notice and getting engaged in action – just like I was explaining.”

-     “Nah. That isn’t advertising. That is just someone that has lost their cat and is asking us to help.”

Alfie looked up at me and sighed. His expression echoed my feelings – “Come on Dad, save it for Monday. Let’s get on with our walk and if I see that pesky cat, I will scrag it”.

Posted in Advertising Research, Paul Hague, Thursday Night Insight |
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