Before the Great Depression, the best-selling soft drink in America –
shifting more than Coca-Cola and Pepsi – was a bitter, carbonated
concoction called Moxie. But have you ever heard of it?
The answer is probably ‘no’, because when that recession sank its
teeth into American businesses and money had to be saved, one of the
first things the Maine company did was to drastically reduce its
advertising budget. Moxie lost market share and although it still exists
as a sort of regional curio in New England and Pennsylvania, the brand
never recovered. Its competitors – whose names we know today – didn’t
make the same mistake.
Anecdotal evidence like this doesn’t necessarily mean that
advertising in a 21st-century downturn is an effective use of money, but
the case has been persuasively made. Based on the findings of a report
published in 2008, the Institute of Practitioners in Advertising (IPA)
estimates that firms tempted to cut marketing budgets would end up
having to spend four times the amount ‘saved’ in order to regain their
position.
As the body responsible for promoting the interests of brand
communications agencies, the
IPA would press this claim, but as its
president Nicola Mendelsohn explains, the statistics come from
substantial
economic research.
“Around 30 years ago it might have been difficult to prove the actual
value of advertising,” says Mendelsohn. “But you can do that now. With
econometric modelling you can strip out everything, including the effect
of the weather, regional variations and other factors, to establish the
net contribution that advertising made to the bottom line. It can be
enormous.”
A change in how the effects of advertising are measured isn’t the
only way the industry has moved on, says Mendelsohn. “Today we have so
many more channels to market than we’ve ever had before, which allows us
to be so much more creative and do things in a more affordable way.
Internet, email, social media – these are much more affordable forms of
communication than we’ve had before.” Without doubt, there’s an
opportunity for companies without big budgets to make a big impact.
Doing more with less
One organisation to have done exactly this is Tourism Queensland. It
might
not sound as though the body responsible for bringing people from
offices and cities to the Great Barrier Reef and the surrounding area
has a difficult task on
its hands, but its campaign budget in
2009 –
only £840,000 – was a drop in the ocean compared with many aiming to
reach a truly global audience.
The New York advertising agency
Nitro came up with a campaign that
began with a simple classified job listing for “the best job in the
world”. The idea was to offer one fortunate applicant a six-month,
£72,000 contract as the caretaker of Hamilton Island, just off the coast
of Queensland. Attracted by the prospect of duties that amounted to
little more than cleaning the pool in their own, rent-free villa and
writing a blog about the island experience, 35,000 people from 197
countries submitted video applications.
The story was immediately leapt on by newspapers, magazines, blogs,
social networking sites and TV, and went on to generate £230
million-worth of media coverage and prompt 8.5 million visits to the
Tourism Queensland website.Crucially, Nitro had realised that with
little money at its client’s disposal, other people had to do the work
for them, and with a fantastic ‘and finally’ story of escapism up for
grabs, media outlets across the world were only too happy to oblige.But
exploring new territory like this and placing your company’s fortunes at
the mercy of people in cyberspace or elsewhere can be a daunting
prospect for a marketing team with a reputation to protect. Indeed,
speak to people in the industry and horror stories – about social media
campaigns started on Friday, left unmonitored over the weekend and found
in ruins on Monday morning – do rear their heads.
But, says Mendelsohn, brands are becoming more and more sophisticated
in the way they interact with people. Having spent time with the
management teams of Facebook and Google – both comfortable developing
ideas and strategies on the bleeding edge of progress – she’s in no
doubt that companies risk more by standing still.
Take the example of US electronics giant Best Buy. Confronted with a
sea of complaints and negative comments about its products posted on the
web, the company set up Twelpforce – a Twitter account dedicated to
answering customers’ queries. The answers come from a team of 2,000
store employees with expert knowledge and never amount to sales pitches,
focusing exclusively on helpful advice.
Harnessing the potential of social media and seen as a cheap way to
use existing resources and communicate effectively with its customers,
Twelpforce has been a monumental success. With around 50,000 tweets
since it started in 2009 and 39,000 followers in its first year, it has
helped to reduce Best Buy’s customer complaints by 20 per cent and
generated
a groundswell of positive feeling.
Modern times, enduring principles
But even though companies now have more numerous, more
cost-effective, more direct methods of communicating with their
customers, some things do remain constant.
“In one respect, the rules of the game haven’t changed at all,” says
Rory Sutherland, creative director of OgilvyOne, TED (Technology
Entertainment and Design) conference speaker and much-acclaimed
advertising guru. “Underpinning everything is an understanding of human
psychology, how people make decisions, what enables people to
confidently buy one thing rather than another thing. Really, the whole
business shouldn’t start with an appreciation of the media and
technology. Actually, it should start with an appreciation of people.
“You can then use that understanding to employ anything from social
media to television commercials, design and indeed anything else that
works.”
For Sutherland, a former classics teacher who joined Ogilvy in 1988
during the industry’s golden age, much of the success a product or brand
enjoys can be put down to familiarity.
“A very powerful human heuristic [motivating factor] is fame,” says
Sutherland. “We’re much more comfortable buying things which we’ve heard
of. Another heuristic would be the social heuristic – we’re much more
comfortable buying things that other people seem to be buying.” For
example, he asks, which restaurant are you most likely to go to – the
one you’ve heard of that seems to be busy, or a quiet one that you know
nothing about?
Of course, there are myriad layers
to human behaviour and the
consequences this has for business and economics. But there is something
to
be said for simply making a fuss and getting the word out. Good
old-fashioned PR stunts can work wonders.
Some of these, such as having Tiger Woods hit golf balls off the
helipad at the Burj Al Arab hotel ahead of the Dubai Desert Golf
Classic, or opening a pop-up shop in London’s hip Covent Garden as Tommy
Hilfiger did in 2011, might be expensive. But similar ways of
exploiting behavioural economics, says Sutherland, “can be very, very
inexpensive
to deploy”.
Small is beautiful
According to Simon Dodd, founder of the Dorset-based creative agency
Digger, small and medium-sized enterprises need not be put off by the
feeling that successful campaigns require big budgets. “Almost
ironically, it’s the reverse,” he says.
“The smaller the budget, the better the work has to be to cut
through. Big agencies, because they’re spending so much money, can
afford to do average or below-average work because it’s going to be on
TV 400 times.“It’s not unusual for brands and companies to feel
neglected inside
big agencies,” he continues. “Rather than a famous
name and an office with a postcode that begins with W1, companies need
to find people
who really understand their business, their sector, who
can
add insight and value.”
To go about finding such people, Dodd recommends heading to the IPA website, since its member agencies must meet certain criteria that increase the chances of them producing good-quality work.
The next thing to do is
narrow the contenders down
to agencies that
have done the kind of campaigns that your company aspires to. This,
combined with the opinions of peers and other marketing contacts, should
be enough to zero in on a few options. Then it’s time for a ‘chemistry
meeting’.
This is an opportunity to discuss ideas and narrow options down
further (asking your favoured agencies to pitch their ideas may or may
not be necessary). It’s also a chance to speak about money.
If a prospective agency believes in
the client and themselves, they
may
well be amenable to a payment structure that, using various
metrics, takes into account the success of the campaign. But, warns
Dodd, this is only likely to happen with clients who are brave, who
provide
a simultaneously useful and inspiring brief, and who build a
healthy, two-way relationship with their agency.
Admittedly, following the process all
the way through and producing a
finished campaign will cost money and take
a great deal of effort. But
the returns can
be vast – one campaign for Morrison’s is
calculated
to have generated £21.57 for
every pound it cost. And if an investment
like that doesn’t make sense right now,
it never will.
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