Advertising

The advertising industry calls to mind a scene in Joseph Heller’s Catch-22 where Gen. P.P. Peckem is describing a new term he created.

A bomb pattern is a term I dreamed up just several weeks ago. It means nothing, but you’d be surprised at how rapidly it’s caught on. Why, I’ve got all sorts of people convinced I think it’s important for the bombs to explode close together and make a neat aerial photograph. There’s one colonel in Pianosa who’s hardly concerned anymore with whether he hits the target or not.

Advertisers trying to rise above the constant cacophony in the marketplace understandably focus intense attention on the creative aspect of the communication. However, similar to the colonel who was more focused on bomb patterns than hitting the target, ad agencies are often more intent on getting ads noticed than achieving behavioral outcomes. With advertisers paying for 4,500 messages per person per day, it’s easy to understand that breaking through the clutter is perceived as job number one. But getting the ad noticed is not the same thing as creating a good ad.

Advertising has shaped our habits for generations. Advertising sufficiently offset the cost of newspapers to make them a daily ritual for more than a hundred years. Radio and television owe their very existence to a free broadcasting model, with advertisers picking up the tab for 24-hour access to music, news, movies, and serials. But the old advertising model is collapsing as habits shift in light of market fragmentation, technological innovation, and changing demographics.

As late as the mid-1970s, an ad agency could deliver the vast majority of American eyeballs by simply advertising on three nationwide networks during primetime, the three-hour block of television that turned us into couch potatoes. Newspapers reliably provided access to local markets, informing customers of sales, store openings, and classified ads. And radio stations came in two basic flavors, rock and roll and country, making it easy to reach the vast majority of the Baby Boom generation by buying some local drive time spots. However, our media consumption habits are going through a revolutionary change, and advertisers are desperately trying to figure out this new and alien landscape.

Michael Irvine is on the front line of the battlefield for the next generation of habits. A vice president of sales for ABC since 1985, he has seen his job go from cushy to chaotic. “It used to be simple. There was always a greater demand for our inventory (commercial air time) than supply. One agency would do everything from creation to media buying.” Irvine is responsible for selling ad time on the local TV stations ABC owns, including L.A., San Francisco, and Houston—a job that has become much more complicated in the past few years.

When Irvine started with ABC (at the local Detroit affiliate in 1974), television was tremendously influential. For example, Miller Brewing launched Miller Lite in 1975 with its famous “Great taste/Less filling” television campaign that introduced America to the notion of low-cal beer. The launch was so successful that Miller rapidly grew to take over the number two market share position behind industry leader Anheuser-Busch, and the light beer category became the largest-selling beer segment in the United States in 1992. That kind of success is hard to come by in today’s world of hundreds of cable channels, DVDs, the Internet, game stations, video-on-demand, and IP distribution of video.

“Instead of just selling one channel on 10 stations, now we’ve got digital channels, regional sports channels, and our web sites. I’m selling 71 different products plus combinations of products,” Irvine explained, the frustration clear in his voice. “We might get four million unique visitors to a local station’s web site a month, but advertisers are looking for sites that can do that in a week or a couple of days.” Adding to his challenges, Nielsen, the bible of television ratings, changed its rating system. When I asked Irvine about the new system and impacts of personal video recorders such as TiVo, his response was colorful, to say the least.

After three or four minutes of invective, Irvine presented a picture of just how much advertising is changing. “We used to sell ad time based on theories of recency, reach, and frequency—the number of times you need to see an ad or whether you’re in the market for a product. You never knew when somebody might be in the market for a car, so you advertised consistently. But now, you’ve got companies who have access to a lot more information wanting to change their media buys in response to what happened yesterday. And you’re making promises about what you will deliver based on somebody punching in a code every 15 minutes. It’s crazy, but that’s our business now.”

The inexorable link between advertising approaches and customer behavior is similar to a dog chasing its tail. For decades, we have awaited the fall for new shows, deciding which would become part of our routine for the next year by the end of September. Networks capitalize on this future revenue by getting advertisers to commit billions on next year’s shows in a process called the upfronts, in which media planners play roulette by placing bets on next year’s shows.

My conversations with Irvine took place during the writer’s strike of 2007–2008, a turning point in the transformation of the content industry. We discussed how the timing of the strike would impact habits not only for the next season, but also for the foreseeable future. “Network executives rely on the upfronts so they’ll know how much to spend on shows and the number of rewrites they can afford.” Irvine pointed out that reality shows have much lower budgets and that the strike would tilt executives toward ordering more unscripted programming. The power of habit is not limited to customers. Network executives, writers, actors, and media buyers are guided by the way they made decisions in the past. Indeed, much of the writer’s strike was an attempt to extend the status quo into the revolutionary world of digital media.

Although Irvine focused on changes in the behavior of advertisers, I pointed out that the risk could be much worse. Habits build up their own inertia—the more inertia, the greater the perturbation necessary to dislodge the behavior. Although it’s shrinking, the major networks still control the largest percentage of audience viewing. Disrupting the traditional fall lineups will inevitably change the behavior of millions of viewers in unpredictable ways that are unlikely to be beneficial to the networks. As the baseball strike disrupted our sports habits for years, the writers might be killing the goose who lays the golden egg not only for themselves, but also for the networks.

It’s worth noting that WPP’s GroupM unit, the world’s largest buyer of media, predicts that Internet advertising will surpass television advertising in Sweden, the United Kingdom, and Denmark during 2008. This shift in advertising spending reflects the underlying seismic shift taking place in how people are accessing information.

Advertising agencies have been navigating these changes for more than a decade, sometimes accelerating the process and other times desperately trying to hold them back. Eric, a media planner for a large agency, talked with me about the state of the industry and how his role integrates media into people’s lives.

“The jig is up on advertising—people are on to us,” Eric told me. “We can’t approach the audience the way we used to.” In response to my question about changing media habits, he agreed that the alteration is happening at the DNA level. “There is a new dynamic in the way people view advertising and new dynamics of media. It is totally unrealistic to expect the audience to make an extra effort to get your message.”

Viewing customers as an audience is critical, Eric explained. “We have a responsibility to entertain and inform as well as communicate a message.” If advertising does not create value for the viewer, it will not break through the brain’s filtering mechanism. “We are focused on how to use media more coherently with the message. We’re not looking at simply what we can do, but what we should do.”

Eric agreed with the idea that the biggest challenges advertising faces is the customer’s defense mechanisms against the sheer volume of advertising. “Agencies disaggregated message, media, and placement functions 15 years ago, and maybe that’s been the problem. The creative area might have a great visual, but the placement people are just concerned with how many places they can put it, not whether the ad really works there. They’re not really thinking about the consumer experience.”

And the integration of media and message based on the audience experience has the best opportunity to rise above the cluttered media landscape. Similar to the deal inherent in the brand promise, advertisers need to also understand the deals they are making with customers. I get to watch TV and listen to the radio for free as long as I accept advertising. If I want to avoid the commercials, I can pay for the content. But if the advertising becomes too intrusive, I’ll bypass it with TiVo, Netflix, satellite radio, or my iPod. If advertising is informative, entertaining, or making something I want free, it’s a good deal. And if it’s just clutter, I have a mind that has evolved over millions of years designed specifically to ignore it.

I asked Eric about the challenges of media planning in these times of enormous change in traditional media and the emergence of the Internet and mobile advertising. “We do a lot of TV because a lot of people still watch TV, and it’s a great medium for our messages. We also use magazines because they still have a large readership. Yes, traditional media continues to lose customers, but we still use it to reach the bulk of the market. But the digital world opens up important possibilities about how we connect to and share information.”

Eric explained that, regardless of the chaos of the times, “The best way to tell the story is as if we were simply showing the product to a friend.” For this to be credible, it helps tremendously if the advertiser actually believes in the product. “There is a real problem when the ad reality does not meet the product reality.” He quoted a line that strikes him as particularly appropriate: “Ad budgets are attached to a lot of mediocre thinking.”

Marketers believe that the most powerful form of advertising is word of mouth (WOM), a contention that has a lot of research to back it up. Unfortunately, by definition, WOM is not advertising because no one pays for the message. And that’s why it’s so effective. When someone is trying to sell us something, we automatically discount the message. But if a friend or someone we identify with tells us about a product, a restaurant, or a movie, we listen. Our friend’s recommendation bypasses our ad defense mechanisms and the skepticism we reserve for anyone trying to sell us something.

Ad agencies have struggled for years to capture the power of WOM, and they see tremendous potential in what is loosely called Web 2.0, the world of social networking. Blogs, web sites, MySpace, Facebook, IM, chat, and text messaging have eliminated the space and time constraints of human communications. However, in attempting to seize these new opportunities, agencies risk committing the same mistakes that have gotten them ignored in the past.

Customers want to shop efficiently and effectively, and advertising can help them achieve that goal. But if advertisers cheat, lie, or abuse customers by wasting their time, they sow the seeds of their own irrelevance. The Web 2.0 phenomenon has tempted numerous companies, PR firms, and ad agencies to pretend they are community members in an effort to sway online public opinion. Most of us are poor liars. We fail to make eye contact, our respiration increases, and we fidget. And most of us can tell when we are being lied to because of these same behaviors. A generation brought up on the Internet, IM, and text messaging spots these phonies just as quickly online as we do face to face. Not only does this make the target audience mad, but it also makes the offending company look clueless and dishonest.

Trust is essential to becoming part of customers’ habitual behavior. A lack of trust guarantees that the person, product, service, or company remains under constant, conscious scrutiny by the executive mind. The allure of the digital universe beckons irresistibly because it provides a cheap, quick, effective means of communicating with targeted segments where they live. But this is a double-edged sword because anything seen as illegitimate will be instantly exposed and universally vilified.

Customers are constantly interacting with advertising on both conscious and unconscious levels. Accept this as fact: If you are intentionally dishonest in your promotional activities, what you lose will be far greater than whatever you hoped to gain.

The marketplace operates on a perception of fairness and honesty, and even when companies aren’t being dishonest, their behavior can still violate their customers’ unwritten code of conduct. In 2007, Facebook attempted to leverage its customer base by launching an advertising program called Beacon, which tracked purchases made by its 59 million users. This move created an immediate backlash based on privacy concerns, and the company’s founder, Mark Zuckerberg, yanked the program and issued a public apology.

As discussed earlier, our emotions powerfully influence our beliefs, attitudes, and memories. Crafting ad campaigns to connect positive emotions to a brand or company is a primary goal of most advertising. Just as the vision of a product might not survive the product development process, a great product message can be tarnished by others’ decisions within the company that are totally unrelated to your brand.

Dove soap launched one of the most successful Internet-based viral marketing campaigns with the release of a short video entitled Evolution. In fast forward, we see an attractive woman preparing for a photo shoot. Using her face and hair as canvas, an army of makeup artists transforms the woman to near perfection for the photographer’s lenses. The resulting photograph is not simply retouched, but digitally altered to transform the already beautiful image into impossible perfection. The tag line, “No wonder our perception of beauty is distorted,” captures the irrational quest for unattainable beauty that women around the world feel as a result of Madison Avenue and Hollywood’s relentless presentation of surgically and digitally altered 19-year-old girls as role models for our daughters. Branded as Dove’s Campaign for Real Beauty, the company launched a web site providing resources for women, even creating the “Dove self-esteem fund,” to develop and distribute resources to broaden the definition of beauty.

Dove had hit a home run. The campaign was a hit with women and the press. Only one problem existed. Another clever alternative campaign was running wild on the Web. Axe body gel created “The World’s Dirtiest Film” campaign that boasted great Web 2.0 credentials. It combined professionally developed video with user-generated content, was hooked up with Facebook and www.collegehumor.com, and featured eternally adolescent David Spade as its host. Aimed at young men, the video presented women in exactly the exploitive way that Dove’s campaign for real beauty railed against. Unfortunately for the Real Beauty campaign, Unilever owns both brands: Axe and Dove.

Both campaigns benefited from the collaborative nature of Web 2.0, but that same power was turned against the company. With ironic genius, filmmaker Rye Clifton transposed the images from the Axe film onto another video from the Dove campaign that showed a young girl being assaulted by sexually charged images from advertising, TV, and film. Clifton replaced the powerful Dove message, “Talk to your daughter before the beauty industry does,” with “Talk to your daughter before Unilever does.” A petition to Unilever CEO pointed out the hypocrisy and challenged the company to stop the exploitation by yanking the Axe ads. A Unilever executive pointed out that the Axe ads were a spoof of the mating game, but Clifton’s film, which has been viewed more than 100,000 times, makes that contention seem less credible.

The audience’s unconscious mind picks up on cues invisible to the executive mind that creates the messages. The best path for companies and their ad agencies is to remember the brand promise. Anything you do that breaks the promise or alters the deal will keep the purchase decision under executive review. And the global knowledge engine serves as a gigantic executive mind, exposing any hypocrisy and mocking any pretense.

The advertising industry has long sought to reduce its waste by targeting its messages to the segments most likely to buy a particular brand. It’s much more efficient to sell golf clubs on the Golf Channel than on MTV. From mailing lists to behavioral targeting, advertising has greatly improved its ability to focus its investment. Eric laments what he calls “the loss of serendipity,” in which messages are targeted so scientifically that they can’t be discovered by groups beyond the limited vision of the media planners.

From a habit-forming perspective, advertising needs to facilitate specific behavioral goals based on one of three objectives: habit creation, habit maintenance, or habit breaking.

Habit creation means focusing advertising on getting new customers to try a product or getting existing customers to use a product habitually. From the perspective of the hierarchy of effects, advertising should be moving a potential customer from awareness to trial. Image advertising serves a limited function in creating awareness. Research from various disciplines indicates that customers will have a more favorable impression of familiar versus unfamiliar names. This partly explains why scandal-ridden politicians are often re-elected; voters recognize the name without necessarily knowing why.

But awareness is not enough. We are aware of thousands of brands, and most of them fail to cause any reaction. For a brand to become part of a behavioral repertoire, advertising needs to take customers to a state of mental readiness in which they are actively evaluating the product or service. Getting a potential customer to take the step from passive to active mental effort requires engagement—a connection to the message.

Variety seeking is a habit. Advertising can be very effective at getting people to try the barbecue chicken pizza and the mango iced tea, but few of these products will be anything but a one-night stand. For advertising to help a brand become a habit instead of a fad, it needs to facilitate shortcuts in the customer’s mind.

In 1978, the International Ladies Garment Weavers Union (ILGWU) began an ad campaign encouraging shoppers to “Look for the Union Label.” The commercial was decidedly low tech in terms of production values, with real union members singing marginally off key. Although the commercial ran only 60 times from 1978 to 1985, it was highly effective because it took an emotional appeal, supporting American workers, and tied that to a behavior, looking for the union label when buying clothes. The commercial’s message was not “Try clothes made by union workers and you’ll be impressed by their quality.” The message was designed to shape shopping habits, connecting an emotional appeal to a behavioral shortcut. Looking for the union label became a habit for some customers.

The power of advertising to maintain and strengthen the habits of existing customers is far greater than its ability to persuade noncustomers to try a product. Seeing an advertisement in a magazine or on a billboard for your brand reinforces your choice. Similarly, seeing a product you already own used in new ways can create an immediate trial opportunity. Marketers often neglect reinforcing behavior because they are pressured to acquire new customers, often at the expense of their existing, and profitable, current customers.

Marketers have debated how many ad exposures are necessary to communicate a message. A companion debate surrounds the importance of timing to the exposure. Still another debate centers on the saliency of an ad. From the habit forming perspective, we can see the role of advertising for habit maintenance differently.

Habit formation is a multiple-step process in which a behavior is automated through repetition and reinforcement, and cues (any stimuli associated with the behavior) trigger the response. Advertising can facilitate this process by providing the educational component to begin usage. But ads are far more powerful by creating cues in the environment to activate behavior. Billboards for fast-food restaurants provide a good example.

Chick Fil-A’s long-running “Eat More Chikin” ad campaign combines amusing commercials of cows encouraging us to substitute chicken sandwiches for hamburgers with eye-catching three-dimensional billboards. The humor, consistency, and three-dimensional approach make the cows’ outdoor ad an exceptionally effective cue.

The most difficult job for advertising is to take a customer away from a competitor. You are working against established habits and must overcome the inertia related to prior behaviors. This means the ad must somehow dislodge the behavior from the habitual mind and elevate it to executive mind review. The difficulty in this approach is that habits are often executed so fast that the executive mind remains unaware of the process.

Advertising to take customers away from competitors has a better chance of success if events occurring in the marketplace are already getting customers to think about their current brand. New product introductions, new model years, and even updates of existing products all have a chance at getting a customer to move an automated decision up for executive review, even if only briefly. Even if the competitor is bringing out a new and improved model, it means that existing customers are consciously evaluating their current brand. And, of course, if the competitor makes a publicly visible mistake, your ads have a far greater chance of being attended to.

To facilitate habit formation, advertising needs to break down the behaviors that lead to purchase and repeated use. This means first understanding your potential customers’ shopping heuristics. Do they use web sites, ads in magazines, or newspapers to get information on this product category? Is the product high or low involvement? How does the advertising campaign move the customer toward trial? By understanding your customers’ and potential customers’ existing habits, your advertising can facilitate instead of fight entrenched behavior.

Also, advertising must consistently link to specific behaviors. Advertising typically does not cause a purchase, but it can take a potential customer from awareness to interest and evaluation. Ultimately, advertising should get a customer to want to try a product, such as taking a car for a test drive or visiting the web site to view the trailer of a new movie. Ads that stop at attitude formation are not cost-justified.

What is the role of advertising for products that are already used habitually? Why does Coke spend so much time advertising if the vast majority of its customers are already executing incredibly powerful scripts? Clearly, value exists in providing a cue for purchase and also in reinforcing a purchase. Advertising also helps maintain relationships with distribution channels.

In reality, most of us can’t tell the difference between Coke and Pepsi, or Miller and Bud in blind taste tests. (Oh, of course you can. I’m talking about the vast majority of other people.) The real story behind the New Coke debacle is that the market leader should not mess with people’s habits. Coke had changed its secret formula before (most notably switching from sugar to corn syrup); they just didn’t tell anybody. But New Coke forced the issue into our executive minds. The backlash was simply customer frustration at having to consciously consider a decision long ago relegated to habit.

Although customers prefer to buy brands they are aware of, the experiences associated with a brand are far more powerful than any advertising message. Advertising needs to facilitate a process that leads to and maintains habitual product use.