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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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Chicken Biryani and B2B Marketing

Paul Hague this week reflects on how an understanding of the decision making process in everyday life helps us to better understand and influence the decision making process of our prospective customers.

I was out for dinner the other evening with a colleague and we were eating in an Indian restaurant. The restaurant had the usual extensive menu we have come to expect in such places. Now I’ve got to thinking that restaurants would be an excellent place to segment people. Who takes the lead and calls the waiter? What do people look for when choosing a meal? How influenced are they by price, the specialties and variety? How much information do they need to make their choice? How decisive are they? Do they stick to their choice or does it get changed at the last minute?

My colleague sat happily chatting and would never have looked at the menu if I hadn’t suggested that we take a couple of minutes to look it over and place our order. After a good five minutes of puzzling she quizzed the waiter about every type of rice on the menu, enquired how the sauces were served, and queried the provenance of just about every meat and fish dish. Then, just as I thought we had game, set and match, she called the waiter back and chose something completely different. A man from Mars would, without hesitation, have put her into the bucket of ditherers.

And the man from Mars would have been completely wrong. I know this person well and she is a high-flying consultant in human resources. She commands a daily rate that makes my eyes water and is courted by some of the largest corporates in the country for her decisive advice. With her considerable riches she has recently moved into a palatial new home, bought a sizeable Mercedes as her main car and a little Citroën as a runabout. How is it that a powerful woman who can instruct a board of directors on what they should do to avoid mass disruption in a workforce and who can readily invest thousands of pounds in bricks, mortar and metal, cannot order a chicken biryani?

This paradox got me thinking about decision making. How do we choose things? How do we decide what actions to take from something as simple as a meal in a restaurant to an investment in a company?

Every decision is driven by a need – an objective, if you like. Somehow our brains synthesise the available information and guide the best course of action; the decision. It may appear strange that the decision to buy a house, the biggest investment most of us ever will make, is often based on a couple of visits to the house, an hour or two walking round it and some dodgy advice from an estate agent. If we analyse the cost per minute of the house investment decision versus the cost per minute of the chicken tikka masala decision, we see a difference of at least 1,000 to 1. It is clearly out of proportion.

So what is going on? When we buy a house or a car, we very quickly narrow the options down to just five or six choices with our final selection based on a critical issue. In the case of the Indian meal, there is an overload of information. There may be little to choose between the different meals and, let’s face it, any of the options would be reasonably acceptable. There is too much choice and too much information to synthesise for a very modest return.

I am reminded of a story that I heard years ago about Tootal, who used to be one of the largest manufacturers of ties in the UK. Tootal had a range of ties that was so large it would have embarrassed Sainsbury’s toothpaste display. They reduced it to the 35 best sellers and lo and behold, sales increased and profits rocketed. They made decision making easier; they simplified choice.

The insight I share with you is one of the most crucial in b2b marketing. We need to help customers make their choice – and we need to make sure it is in our direction. To do this we need to understand how our customers are different, we need to recognise their different needs and, now the difficult bit – we must be strong in simplifying our offer so that it resonates better than any others with what they are looking for. If we do this, our products will stand out, they will be snapped up by those who like them and, of equal importance, they will be rejected by those who are looking for something else. And we will all get home earlier.

Read more about the subjects touched in today’s Thursday Night Insight in our following white papers:

Why Is Business-To-Business Marketing Special?
Market Segmentation in B2B Markets

Posted in Decision making, Leadership, Management, Needs, Paul Hague, Thursday Night Insight |
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What’s that smell?

In today’s Thursday Night Insight, Paul Hague uses an interesting analogy to point out that small marketing actions can often make a big difference.

I live in a nice suburb of southern Manchester. A couple of hundred yards in one direction is the River Goyt which joins the River Mersey and eventually finds its way into the Irish Sea. A couple of hundred yards in another direction is a care home. A hundred years ago this care home used to be an isolation hospital for TB patients but it has been modernised and extended and now looks after a couple of hundred people in residential care. Because of our remote location, the nursing home has its own mini sewage works. It is not quite a cesspit, more of a digester.

A couple of years ago, at the time of one epoch of modernisation, a new effluent treatment plant was installed. However, I have to tell you that it hasn’t been very successful. The pong has been terrible. I notice it every time I walk down the lane with Alfie, my boxer dog. My next door neighbour is a few yards nearer to this digester than I am and he gets a whiff more often as he sips his sauvignon blanc on his back lawn.

Now this neighbour is no shrinking violet and he is not backward in coming forward. He complained long and loud to the manager of the nursing home and, guess what, nothing happened. He is also a man of action, my neighbour. Driven to distraction by the stench and, with time on his hands, he constructed half a dozen signs which he stuck on poles for people to read as they visited the home. His communications were bold and to the point, and read “If you don’t want to smell your parent’s excreta when you visit this nursing home, tell the management”. For those who might have been unsure as to the meaning of the word “excreta”, he had signs with a more basic vocabulary.

Shortly after the police had visited my ‘‘ang ‘em and flog ‘em” neighbour to warn him off carrying out any further terrorist campaigns, things began to happen. Specialists were called in and they did a survey. Within a few days, a six inch plastic vent pipe was strung from the digester to the top of a 30 foot nearby tree. Next they installed snug fitting covers on all the access manholes. Finally they took the lid off the digester, fitted new rubber seals and placed it back in position, secured by half a dozen heavy sandbags. The result – no smell.

As I watched this event unfold, I was reminded very much of the work I do. I would like to point out that I was not making the connection between my work and effluent (although some of you may cynically do so); rather how marketing problems can be solved.

Most companies do an ‘okay’ marketing job – not brilliant, just enough to get by. Their products are reasonable, their route to market works, their prices are roughly right and their promotions are acceptable. If this wasn’t the case, they would quickly go out of business. However, I guess that almost every company receives at least the occasional complaint. Every business has some weakness in their marketing activities. I sense that, as with the nursing home, many of these will be known and many will be largely ignored. Only when things get bad enough is action taken.

And yet, as we have seen, actions that lead to improvements need not necessarily be extreme. The nursing home didn’t put in a new digester. It made three small improvements that solved the problem. In many businesses, three small improvements, in the right area, can make a considerable difference. And this is my insight today. Don’t wait for customers to turn to terrorist activity before action is taken. Ask yourselves which three things you can do to improve your marketing. If necessary, get the experts in to carry out a survey and find out what needs attention, and do it now – don’t wait for the nasty smell.

Posted in Marketing, Paul Hague, Thursday Night Insight |
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The Challenges of Global Business-to-Business Promotions

This month, Campaign magazine published its second Going Global supplement. A number of experts in the field of branding gave us their thoughts on the issues that face those tasked with international branding. One of those experts was B2B International’s very own Paul Hague, who provided some advice for business-to-business marketers taking their promotions to a global audience:

We have all heard of communication gaffes made by regionally focused consumer companies as they attack a wider market. If Rolls-Royce had gone ahead with the branding of their Silver Mist car in Germany, it would have found it was trying to sell Silver Sh*t. Such cultural and linguistic differences are a marketer’s nightmare and they indicate the importance of using research to understand the difference between customers throughout the world.

HSBC has made an effective campaign out of the way different people see the world. In a long-running and highly recognisable series of adverts (particularly noticeable in international airports), they humorously provide examples of how people’s interpretation of the same objects can be vastly different depending on their culture, heritage, education, etc. They demonstrate, if you like, how one man’s meat can be another man’s poison.

All the while, business-to-business marketers have been sitting on the sidelines. They do not have the huge marketing budgets that are required for global campaigns. In fact, $200,000 is likely to be a respectable budget for many an industrial company or division aiming at an international market. With such meagre funds to play with, their communication efforts have been much more targeted and therefore less visible for us to examine and critique.

With an emphasis on below-the-line advertising, business-to-business marketers have focused on anything that gets them close to shaking hands with a potential customer. High on the list are exhibitions, brochures and technical sheets translated into local languages, and, if you’re lucky, a website on which you may just have one or two language options. There is very little attempt made to understand the local culture and to design a promotional campaign that meets local needs.

If marketing budgets are really so small for business-to-business marketers, it may be hard to imagine how they could afford to spend $100,000 on a market research campaign aimed at testing different communications and finding out what works over a wide geographical area. Mind you, the investment in research to establish the principles of what works pays dividends – not only on the current campaign but on all future campaigns.

I encountered a good example a couple of years ago during the concept testing of an advert. Of the seven adverts being tested, the design agency had a clear favourite – a nicely designed ad showing two futuristic-looking heads. However, in what was a huge disappointment to the agency, this particular ad bombed dramatically when tested against the six others among an international group of target customers. Existing and potential customers actually found the ad confusing and felt it portrayed the company as two-faced. Adverts that tested much better were less stylish but they featured the product, or the product plus a person.

A good test for any b2b marketer is to lay out their promotions in front of customers and prospective customers, and ask the following questions:

• What are first reactions to the promotions?
• What are the key things that jump out of the promotions?
• What are the promotions saying to you?
• How would you rate the clarity of the message(s)?
• What are the benefits that are communicated by the promotions?
• How important are these benefits to you?
• How effective are the promotions in terms of being compelling (“stop-ability”), relevance, links to the positioning of the advertiser, and clarity?
• How successful are the promotions in “calling the customer to action”?
• Do respondents think anything is missing from the promotions?
• How clear is it what people should do next, having seen the advert (i.e. how effective are the response mechanisms and instructions)?

Market research isn’t the only measure that can be used to test the effectiveness of promotions. Additional indicators can be quite simple, such as:

• The correlation between the sales of a product and a promotional campaign. However, the long lead times in business-to-business markets seldom show strong links between the two.
• Response mechanisms built into adverts or literature that over time provide feedback on the effectiveness of campaigns.
• Orders taken on an exhibition stand (or, more simply, the number of business cards collected on the stand).
• Feedback to the sales team (and order takers) that a promotion has been seen.

In conclusion, here’s a checklist of questions that business-to-business marketers should consider when addressing global markets:

1. Start with the views of locals – no one knows or understands the market better and their views are always worth listening to. However, be prepared to experiment and be bold, because the best promotions are those that break the mould.
2. Promotions are most effective if they have a single, purposeful proposition. Many promotions are overloaded with too many propositions or they are too clever by half.
3. Promotions that look authoritative, even editorial in style, will be eagerly read by a technical audience.
4. Technicians love facts. Give them loads of them.
5. The product may be boring to some people but it isn’t to the person who is buying or specifying it. Show them the product.
6. Promotions that feature someone from the company are far more believable than those that use actors.
7. People will give a fraction of a second to a promotion (a blink) as they make up their mind whether it is for them or not. Catch their attention with images and visuals at the top of the ad and use them boldly. Use them to draw people into the promotion.
8. Make sure that the images are relevant otherwise the audience will quickly move on. The closer the relevance of the images to the industry and the text, the better.
9. The headline of any promotion needs to be strong and powerful. Many headlines fail by being too long, too complicated or irrelevant. The headline should follow the visual or lead at the top of the ad.
10. When developing a campaign, give it “legs”. Wherever possible, create a connection with parallel or previous campaigns so that there is a link that provides continuity for the audience.

Posted in B2B Marketing, Branding, Global Research, International Market Research, Paul Hague, Promotion |
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Market Research: The Second Oldest Profession?

Paul Hague this week takes us on a trip down memory lane to discover the origins, history and development of the market research profession as we now know it.

A prostitute, a doctor and a market researcher were sitting around late one evening, and they got to discussing which was the oldest profession.  The doctor pointed out that according to biblical tradition, God created Eve from Adam’s rib. This obviously required surgery, so therefore that was the oldest profession in the world.  The prostitute said that this may be so but that was engineered by God, not doctors.  Eve’s temptation of Adam was a clear indication that her profession was the first.  The two turned to the researcher who was listening intently and taking notes.  "Which profession do you think is the oldest?" they asked. "Well," said the researcher, "we can’t be sure without a survey and that will take six weeks.  However, what you should know is that market research is the second oldest profession."  "How is that?" asked the other two in unison.  "No doubt at all about it," said the researcher, "because when Adam and Eve had done their deed, the first words that were uttered were, "How was it for you?"".

This story got me thinking about the history of market research.  Casual questioning, as from Eve, is not the systematic process that we know as market research.  It is said that the first recorded straw polls (incidentally, the term comes from farmers throwing a handful of straw into the air to check out where the wind was coming from) were in the early 1820s when newspapers in the United States carried out simple street surveys to see how the political winds were blowing.  By the early 1900s a fledgling market research industry had started in the U.S. focusing on advertising testing in one form or another.  The industry arrived on the U.K. shores in the 1920s and 30s, and I was reminded of this the other day when I picked up what must be one of the first books published on market research in this country (Market Research by Paul Redmayne & Hugh Weeks, Butterworth & Co – 1931).

Flipping the yellowing, musty pages, I was quickly taken back to my formative days in the market research department of Dunlop, where we had an ingenious device for analysing responses from questionnaires.  The closed answers were represented on single cards, perforated with holes around the edge, each representing an answer to a question.  If a respondent gave a particular answer, the perforated hole would be punched open right to the edge.  When all the cards were punched, they could be lined up in the box and a needle would be run through the holes so that we could lift out only those cards which were not punched right to the edge.  This enabled us to do a quick count of the number of cards left in the box, which represented respondents giving an answer to a question.

Charting in those days was laboriously carried out with my Rotring pen and graph paper.  Redmayne and Weeks had some sage advice for the novice market researcher on this subject: "There are many advantages in using a standard sheet of charting paper, so that charts can be kept together in a ring binder.  It is useful to make a practice, dating each chart and of indicating to whom it has been shown and for what purpose it was first prepared, together with the original source of the various statistics plotted."  Check out this illustration of how they suggested charts should look.  You wouldn’t easily turn out 100 of these by hand the night before a presentation!

So what has changed in the market research industry over the last 100 years?  Answer: almost everything.

The questions we ask are broadly the same but the technology that allows us to ask these questions – the phone and online – has resulted in faster, cheaper and more thorough surveys than ever before.  Qualitative research is, as it always has been, dependent on the skills of the moderator, although focus group venues provide an improved environment for viewing and testing products and concepts.  In quantitative research, the tools and techniques such as conjoint, SIMALTO, Van Westendorp and the like enable us to get a better fix on prices and product features.  I was amused to read Redmayne and Weeks say: "As market research acquires a more established position in industry, its purpose will be better understood and appreciated by ordinary men and women, so that in time we may hope to reach the position of the United States, where the man in the street will respond to questions about his tastes and his buying habits since he can understand the reasons why he is being questioned. The time, however, is still very far off when consumers will have cause to be annoyed by the frequency with which they are approached.  It will need a great number of investigations before many of the inhabitants of this country are called upon twice unless the general technique of investigations become so stereotyped that certain representative towns are continually being chosen."  There must hardly be a person in the UK who has not been subjected to some sort of invitation to take part in a survey in the last year.

Returning to the story of the doctor, the prostitute and the market researcher, it occurs to me that market researchers may or may not be the second oldest profession in the world, but for certain, we will be the last profession hanging in there.  When the world finally comes to an end, and we are queuing at the entrance to the Pearly Gates, there will be someone with a clip board and a questionnaire.  "Just one more question Sir/Madam before you enter.  Can you tell me how likely you are to recommend life on earth on a scale from 1 to 10 where…?"  It’s that question again – "How was it for you?"

Posted in Innovation, Market Research, Online Surveys, Paul Hague, Pricing Strategy, Research Methods, Thursday Night Insight |
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