Why Advertising Is So Valuable – Even When It Doesn’t “Work”

“Don’t it always seem to go
That you don’t know what you got ‘til it’s gone
They paved paradise and put up a parking lot.”
– Joni Mitchell, Big Yellow Taxi

It’s clear from this billboard perched over the parking lot of Back Forty restaurant in Vancouver, that the restaurant’s head of marketing and copywriting understands the biggest conundrum in advertising – and isn’t shy about letting us know. That is, most of the time, you can’t see advertising “work”, but if you stop doing it you’ll eventually see customers move away to competitors who are staying top-of-mind.

Today, the majority of ad dollars are still going into media that are very difficult to track. A recent report from global ad agency Group M shows the enduring prevalence of offline media like TV, radio, print and outdoor advertising. And the difficulty is not only in tracking a consumer’s journey from seeing a billboard to reaching the till; marketers often find that when they spend money broadly on an advertising campaign sales don’t even go up!

So are Coca-Cola, Tide and GM crazy? How about the local travel agency who buys bus ads for a month every winter, or the regional furniture store who continually pumps low-budget TV commercials at us during off hours? What do these advertisers know that you won’t find written about in the Google Adwords Blog?

A rather clever fellow by the name of Byron Sharp has written an incisive book that provides credible answers to these questions and helps us untangle the greatest misconception in marketing. In “How Brands Grow – What Marketers Don’t Know” Sharp convincingly shows that business and financial managers who impulsively reject brand advertising in favour of direct response tactics are often uninformed. They fail to realize that most advertising works by creating and refreshing memory structures. Memory, more so than even persuasiveness, is the dominant link between an ad and a purchase because purchases often happen several weeks, months or even years after an advertisement has made it through the media clutter to lodge in a consumer’s mind. In fact, advertising can and should resuscitate past memories about a product. That said, there are certainly instances where an overt call to action or notification of a time-limited sale in an ad will show direct and immediate results. It’s just that there are many other opportunities for good advertising that don’t give off as clear a signal in terms of consumer response.

Sharp meticulously explains that advertising is very difficult to measure because its effects are spread out over time and because in media there is a lot of noise relative to the signal. Surprisingly, he points out, a lot of the time advertising actually works by preventing one’s customers from switching to a competitor in the future. So the moral of the story is, if you aren’t regularly reminding consumers of your offer, you may lose them. Advertising may be working for you today even though you can’t see it, and perversely, if you stop advertising you may see it stop working!

Here are some of Sharp’s top prescriptions for creating advertising that effectively reminds consumers of what they previously decided they wanted to do – rather than simply aiming for immediate, spontaneous change in behaviour:

  1. Don’t have long lapses in advertising
  2. Get noticed, not screened out, by consumers [cut through the clutter]
  3. Use clear brand links [ensure the distinctive aspects of the brand are present]
  4. Refresh and build memory structures that make a brand more likely to come to mind and be easier to notice

With all that in mind, if you’ve gone a bit light on offline media this holiday season and you’re reconsidering the strategy, Discover Media House can help you get inside access to heavily discounted last-minute ad inventory before Christmas. Ask us how!

AdTech Spotlight: ThinkCX

This week we got a chance to sit down with Ron Smouter, Co-Founder of ThinkCX – the company that analyzes social media to find early warning signs when a customer is considering switching providers (i.e. “customer churn”)…
Q. Tell me about ThinkCX’s vision for marketers. What’s the key link in the chain you’re providing them?

A. ThinkCX is the early warning system that enables marketers to be far more proactive in fighting customer churn. We find and analyze dozens of different types of public churn signals that a brand’s customers provide on social media. When an individual customer displays signs of switching, we send an early warning to the brand, long before that customer picks up the phone to cancel.

Q. What industries is your product an especially good fit for?

A. Our solution is particularly effective in retaining customers for companies that have a subscription or recurring billing business model with relatively high customer revenue values. ThinkCX is currently focused on helping brands in the telecom, retail banking, and insurance industries, and we’re looking forward to serving other industries such as e-commerce, travel/hospitality, and consumer loyalty programs in the near future.

Q. In terms of others in this space, are you beating your competitors on speed or zigging while they zag?

A. Oh, we’re zigging alright! Most of the competition we encounter comes from complex analytic solutions that use the brand’s own internal billing and operations systems as data sources for their churn prediction models. ThinkCX focuses on what the customers more directly reveal about themselves and their churn intentions on social media. So, while everyone is heading for the same finish line, our solution definitely follows a unique course in getting there.

Q. How should someone reach ThinkCX if they want to try your services?

A. “Try” is the right word – we begin all client engagements with a no-risk pilot program designed to prove the solution’s value before a purchase decision is made. Please email rsmouter@thinkcx to find out how it works.