Friday, 8 January 2010

June 2005 issue of Harvard Business Review

reporting on the effectiveness of 500 various consumer and B2B marketing programs:
84% resulted in less market share, not more
Most customer acquisition efforts did not break even
Fewer than 10% of new products succeeded
Most sales promotions were unprofitable
Advertising ROI was below 4%
Doubling advertising expenditures for established products increased sales just 1% - 2%

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Thursday, 7 January 2010

"The incredible plethora of choices consumers now possess has a downside

"The incredible plethora of choices consumers now possess has a downside, and it's called exhaustion. An overwhelming number of possibilities complicates every buying decision. Add to that all the other more baroque aspects of modern life, such as two-income households, frequent divorce and remarriage and blending of families, increasing traffic, shortening news cycles, and 100 channels of cable television, and you wind up with a consumer group that feels very over loaded and harassed.

"It's a paradox: The more brands consumers have to choose from, the more they need to cling to one good brand.

"Good brands do three highly significant things for stressed-out consumers:

1. They save time.

2. They project the right message

3. They provide an identity.

David F. D'Alessandro, CEO John Hancock

Brand Warfare: 10 Rules for Building the Killer Brand. New York: McGraw-Hill, 2001. page 18.

"The per-capita consumption of advertising in America today (1996) is $376.62 a year. (That compares with $16.87 in the rest of the world.)

"If you spend $1 million a year on advertising, you are bombarding the average consumer with less than a half cent of advertising, spread over 365 days to a consumer already exposed to $376.61 ½ worth of other advertising.

Al Ries and Jack Trout

Positioning, the Battle for Your Mind. New York: McGraw-Hill, 1981. page 6.

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Wednesday, 6 January 2010

"Yet most advertising is ineffective. Mathematically, that has to be true.

"With the customer hunkered down in his or her mental foxhole, it becomes harder and harder to score a hit in our overcommunicated society. With volume up and effectiveness down, advertising has become the focus of intensive research.

"Consider the facts. Most major advertising programs that run are tested. They don't run if they don't test exceptionally well.

"Yet most advertising is ineffective. Mathematically, that has to be true. In a given market four or five brands will develop marketing programs designed to increase market share. Yet on average, no one will increase market share, which in total remains at 100 percent.

Al Ries and Jack Trout
Bottom-Up Marketing. New York: McGraw-Hill, 1981. pages 152, 154, 194, 195.
Use Interactive Communication and you'll win...big time!

Tuesday, 5 January 2010

Why Traditional Interruption-Based Advertising Doesn’t Work Anymore

Traditional advertising doesn't work well anymore for a very simple reason - there's too much of it. There are too many companies trying to interrupt consumers to try and sell them something. There's so much ad clutter and noise today that the latest studies show the “majority of consumers boycott companies that bother them with too much advertising.”

In addition, techonolgy provides consumers with every manner of “ad blockers” including TiVo, VCRs and DVD recorders, to cable and satellite TV, to MP3 players and downloadable music, and now satellite radio. Consumers are paying billions to AVOID ADVERTISING, which is why they like it even less if you actually manage to break through and interrupt what they are doing.

Within this blog are some statistics and below are some quotes from the leading advertising and marketing experts who all agree that traditional “interruption-based advertising” has lost its effectiveness and their individual views on the reasons why. And here is why, despite the lack of effectiveness, traditional advertising won't be going away soon.


"The era of marketing as we have known it is over, dead, kaput - and most marketers don't realize it.

"Mass advertising has lost its ability to move the masses. Technology has given people many more options than they had in the past and created a consumer democracy. Everybody has a thousand choices for any product they might want to buy, and there are a million different products competing for their wallets. So marketers increasingly need to find ways to speak to customers individually, or in smaller and smaller groups. With so many choices, each customer has many factors that weight in his or her decisions, so marketers have to find the reasons that speak to particular customers' concerns. Old-style, one-size-fits-all mass marketing can't do this.

"Because old marketing isn't working, every year, earlier and earlier in the marketing year, people are admitting defeat and falling back on ‘Plan B,’ which is, of course, price promotion. Price promotion is definitely on the rise, and the cost of it is going up. That's because when everyone is cutting prices, you have to cut yours even more. The sale that cost you a dime to get three years ago, now costs a quarter, and still, all you are getting is rented volume that is going away as soon as you stop paying for it.

"Every day you can turn to the newspaper's business pages and learn that another company has succeeded to death. It has sold a lot of stuff and gone broke in the process.

Sergio Zyman, former Chief Marketing Officer, Coca Cola

The End of Marketing As We Know It. New York: HarperBusiness, 1999.