The Joy of Advertising

"Where's the Beef?" "Meow, Meow, Meow, Meow . . . Meow, Meow, Meow, Meow . . . ." Remember the 1986 IBM PC AT commercial with a Charlie Chaplin look-alike? I didn't either. Or, speaking of computers, remember the green apple with bites taken out of it by Commodore 64? We had one of them, with its 8-inch floppy drive and small fat tan keyboard. How about Steve Ballmer in a cheap plaid jacket selling Windows 1.0? How about memorable annual Superbowl commercials like the Budweiser Clydesdales, or hard to understand ones like cute blonde Kaley Couco from The Big Bang Theory, dressed in a purple pantsuit granting extreme wishes? And she was selling the Toyota RAV4 - did you get that?

I remember the Benson & Hedges smoker in his VW Bug, smashing the long cigarette into the windshield on a sudden stop. None of us can count the millions of commercials we've seen over the years, since Ad Agencies like fictional Sterling Cooper from Mad Men, with its headquarters on Madison Ave. grew more and more powerful since the fifties. Ad campaigns cost capital, and all business owners, whether using xeroxed posters hung in storefronts, or multi-million dollar campaigns like Microsoft Windows 8, have been brainwashed that advertising and marketing had to be a big business expense.

Now with minute-long You Tube videos going viral, or a good Facebook placement, social media is now the marketing buzzword. "Are you effectively marketing your business via social media? Facebook, Twitter, Google+, Pinterest and Linkedin are just a few networks we're experienced in," is the byline of hundreds of companies that will do it all for you - write your tweets, Facebook entries, send out email campaigns, write your copy for you and on and on. Oh, and if you're a business without a website? Forget it -- no one will ever find you or hear of you. Or verify you exist.

There's only a couple problems with America's advertising and marketing model, which believes sales always result from new commercials to either drive more sales or push a particular product. Well newspapers are dying, mainly because advertisers are moving to other mediums, hence papers like The New York times now sells online subscriptions, a much saner model. Word-of-mouth, always the most effective means of promoting brands, has taken on greater meaning today. The only problem with it is that when someone likes your product they may tell a few people, but studies have shown if they hate your product or have a bad experience with you, they'll tell ten or more people. And its long been known that a 1% success rate on any advertising is a great return. Oh, only no one can measure it with much accuracy. That's a problem. We "think and hope" our advertising will be successful. 

Also, maybe part of the issue is the growth issue. "We must grow our sales," and our profits. Have you often wondered if this is a company's purpose, rather than making the best product or providing the best service? Will you agree with me that generally we don't mind paying a little more for better quality? When we can tell the difference that is. And the Internet has been getting better and better at doing that with user reviews, although we're still a long way from more independent sources like Consumer Reports, which only focuses on the most popular items.

So, the forever question has always been "How do I grow sales?" New models have emerged, like the subscription model, or membership model. They always existed, but are growing exponentially. Angies List is a good example of a Consumer Reports/personal review subscription model combined with a membership model. And the local gym membership is another. But voluntary memberships, although you receive their services, fail. Take WHYY Public Radio. Excellent programs most everyone loves, but only a small percentage pay for. 

More and more people are searching for these things, tired of being offered only one choice, or limited sources, with no specifications or personal reviews given on the product's efficacy. So word-of-mouth is best, which is good because it means companies better make better products. We're fed up with being "told" they're better -- now we want proof.

Bottom line, since the turn of the century advertising no longer sells products, like soap or soup, it sells differences -- brands -- like Campbell's vs Progresso, Coke vs Pepsi, Toyota vs Honda, People Magazine vs Us, Pine Sol vs Mr. Clean. Its successful -- we're brand loyal. And this is one of the rules of business -- "Its easier and cheaper to sell to an existing customer than to a new customer." Just threaten to leave Xfinity or T-Mobile sometime and see what discounts they offer you to stay. We got offered $50 off our monthly cable bill and some free movie channels for example when we left them. My Mom's cell phone bill went from $46 to $7, after she told them she was on limited income and had to cancel.

Another growing consumption model is the usage model. "The more you use, the more you pay." We're not there yet but should be. Now the first hundred kWh on your electric bill costs x cents, and the second hundred costs less. We have a discount mentality. The more we buy, the greater discount we expect. This is ass backwards. "Tiers" and "levels" etcetera are ways to accommodate the current mentality but actually charge the true cost and provide greater profits. 

I'm not talking about the truism that producing one of something costs more than producing thousands on a per unit basis. Modern business is well organized and with computers knows exactly all costs involved in materials and production. No, I'm talking about big companies like Walmart which extract huge discounts from their suppliers before they'll do business with them, actually putting them just above minimum profitability, but without honor. Kinda like the $.00034 cents songwriters make on each of their records sold. Or the 7-8% writers make on their books from big publishing houses vs 70% from self-publishing.

So I'm in favor of the subscription, membership and usage models for sales, and not the heavy advertising models. . . . We'll see soon what comes out of this new knowledge age. Oh, and by the way, basic social media sites and websites are currently, I repeat -- currently --  free.

By Rodney Richards, NJ