Why would you pay an ad agency to just *try*?
The Pizza Paradox: Attempts vs. Results
If you walked into a pizza place, ordered a large pepperoni, and the waiter said, “Pepperoni, that’s an excellent choice! We’ll try our best to make your pizza, but we may fail, resulting in nothing for you, but whatever the case, the attempt will cost you $14.95,” would you let him finish his sentence before you were out the door?
Probably not. Why would you let your advertising agency tell you the same?
“We have generated this creative platform based on several focus group interviews, and we are certain this will work. But in order to realize media efficiency, we propose you spend $5 million on TV, then add print and digital, of course.”
“What if it doesn’t work?”
“Oh, but we’re confident it will.”
“That’s great, but if it doesn’t your salary doesn’t change.”
“Well, we don’t like to think of it that way. We’re confident it will and our research shows that it…well, should.”
There are instances in which we pay for attempts: surgery, lawsuits, blind dates. However, in this modern era of behavior models, creative testing, and automation, it is high time to take marketing off that list.
Yoda on Advertising: “Do. Or do not. There is no try.”
If you make a list of all the commercials that are currently running on TV, what percentage of them would you say are interesting? I constantly ask this question to random people here in Tokyo, and the answer is usually 5~10% (by no means a scientific study, so don’t quote me). Continuing on, what percentage are actually persuasive, or most important, compel you to go out and buy what they advertise?
The biggest budgets, the best tools, the experts at the most prominent agencies, and we are clocking one hit in ten. That would cost Ichiro his job.
Big Advertising is clinging to the glorious heyday when ad campaigns correlated directly to revenue — TV advertising was a numbers game, and performance varied by creative impact, who had the best idea this time around.
The game has completely changed. It’s no longer about long, smoky creative meetings into the wee hours, it’s now tech-driven and always-on. This bitter morsel of reality notwithstanding, the hoary olde guarde ad guys still bellow:
“Sure, digital is important, but I still think good advertising requires a good creative, a good strategist, and a good accounts guy!”
I heard another gentleman of moderate prominence and similar ilk state:
“I’m tired of hearing about ‘big data’. It all starts with an idea!”
he said, dismissing the complexity of modern marketing communications with a hand wave. Well, yes, this is true, my seasoned friend. Everything does start with an idea, including your career path, that cologne you’re wearing, and which two flavors you’re going to marry on that waffle cone.
This proclamation does not discount the importance of understanding every facet of modern marketing. Relevance in this industry is a fickle mistress and she, better than anyone, will teach you that “one” is indeed the loneliest number if you are not constantly keeping up with the changes.
It’s time for marketing/advertising to be accountable to results, not an attempt at them. And “awareness” does not count, as it is the ultimate crutch upon which failed campaigns lean.
In order to fully grasp how critically important this is for advertisers — especially SMEs in this era of economic downturn, reality-TV presidential elections, and bot-driven 12-sigma market movements — we need to understand how we got here.
THE EVOLUTION OF ADVERTISING
1898 — AIDA — The Sales Model:
ATTENTION • INTEREST • DESIRE • ACTION
Creator: E. St. Elmo Lewis
If you have not seen Alec Baldwin’s famous speech [NSFW] in Glengarry Glenross then A) your deck of cultural meme cards is missing a jack of diamonds, and B) you are in for a treat because this captures the spirit of the Sales Model in…well, spades.
(The more observant among you noticed that Baldwin says “attention, interest, decision, action” which is inaccurate. Think it through and you’ll discover a memo from the Department of Redundancy Department.)
AIDA was the direct sales model, a gentleman at your door with a vacuum cleaner hoping to make a sale on the spot. His smooth demeanor and clever pitch captured your attention, the shiny hardware inspired interest, the ease with which he sucked up the ashes and butts off your carpet gave rise to desire, and the easy payment plan resulted in action.
1920 — AIDMA — The Advertising Model:
ATTENTION • INTEREST • DESIRE • MEMORY • ACTION
Creator: Samuel Roland Hall
The Advertising Model was the birth of creative, as denoted by the clever insertion of “M” into the Sales Model. As advertisements became more prevalent, Sam Hall recognized the need to bridge the time-gap between exposure to an ad, and the trip to the general store.
Thus were born the clever jingles, hooks, and catch copy that served to trigger customer recall once consumers moseyed in for some beef jerky and sundry other provisions.
AIDMA was dominant through the David Ogilvy/Leo Burnett Mad Men era, and ultimately endured for 85 years.
If we consult the Ad Agency Relevance Meter below, it’s easy to understand why advertising agencies were considered revenue partners during the Advertising Model era:
100%. Run an ad campaign, get money. How fantastic. Print, radio, and eventually TV were the order of the day, and if the ad was catchy, then exposure to an ad equated to purchase. The ad did all the heavy lifting by virtue of the analog media landscape.
The Internet completely screwed that up.
2005 — AISAS™ — The Internet Model:
ATTENTION • INTEREST • SEARCH • ACTION • SHARE
Creator: Dentsu Inc.
In 2005, Dentsu Inc, the largest single ad communications company in the solar system, and the institution in which I cut my advertising teeth, declared that AIDMA was no longer relevant by stating that after INTEREST, consumers SEARCH.
That year, Yahoo reigned supreme (here in Japan), Google was a distant second, YouTube was a crazy idea, and Zuck was hacking away in his Harvard dorm room.
I remember the day of the announcement, and the pride inside the company rippled. Proud enough, in fact, to trademark it: AISAS™
Let’s go straight to the Ad Agency Relevance Meter to see how the AISAS model fares:
The irony of Dentsu’s declaration is this: after INTEREST comes SEARCH, but search is not the domain of the agency, it is the domain of the search engines. Dentsu unwittingly announced that the role of the ad agency had a serious haircut, and in fact, the agency is no longer a revenue partner, but instead should be considered a traffic partner.
Exhibit A: This Wall Street Journal article states, “A survey of roughly 200 marketers [in 2014] by the Association of National Advertisers found that about 56% operated in-house agencies.”
Why would advertisers need to have in-house agencies? For the simple logical leap that SEARCH, ACTION, and SHARE are, in many cases, the responsibilities of advertisers, not agencies (actual miles will vary).
Granted, this is a generalization, but as an underscore to the trend, the article states, most notable among the 200 marketers is Apple, which has an in-house agency of 1000 people.
Now that we know ad agencies drive traffic, how do we create revenue from that? Welcome to the era of Data.
2014 — AIRTAC — The Data Model
ATTENTION • INTEREST • RESEARCH • TRUST • ACTION • CONNECTION
Creator: Christopher Demetrakos/Manzanita K.K.
In addition to Tom Clancy-esque expressive possibilities of this acronym, AIRTAC represents an homage to Lewis’s Sales Model: all roads point to simply making a sale. AIRTAC also marks the return of the revenue partner.
If you don’t measure it, you can’t manage it. -Mark Twain
ATTENTION • INTEREST
This is communications, and that includes, but is not limited to, paid advertising.
“Wait, what was that? No paid ads?”
Yes, Mercutio, the bringer of marketing communications dreams has in his satchel the ability to promote your wares sans the use of paid ads. We drive traffic to a conversion funnel just the same, and when they come, we are waiting with exactly what we want them to see. But it doesn’t stop there.
A Good Idea
The Olde Guarde will tell you that good creative is all you need (well, in addition to a “good accounts guy”), and with the right media execution, it’s going to rain sales revenue. This raises an important question: what is “good creative” and who decides it’s good?
What makes a movie “good”? Or how about a song? Or a romantic partner, or a book, or an advertisement? The answer is that it’s stimulating, it causes you to feel something. In each of our respective hearts are strings of varying pitch, and something that is “good” accomplishes the task of plucking one or more of those strings. If I discover I am thinking about a movie the day after I watched it, then it was a “good” movie (Dawn of the Dead. Really. You, too?).
In modern, data-driven advertising, not only can we assess whether creative is failing before spending millions on TV, we can actually conduct inexpensive creative tests on limited audiences of actual high-relevance customers in the wild, not fish-farm focus group subjects. Then we choose the idea we know will work.
(On this note, I highly recommend Clotaire Rapaille’s masterwork The Culture Code. People will tell you what they think you want to hear. Would you like to know how to get the real goods? Kindle it up).
Data-driven marketing goes through testing cycles. We cannot fix what we don’t measure, so we need to measure creative impact, and measure it in ways that will give actual results. When we get it right, the result is creative communication that is measurable, memorable, and desirable. Only then should big media money even be considered.
As consumers searched in the AISAS model, they conduct RESEARCH in AIRTAC. There are endless sources of information where users can obtain trustworthy information on which to base purchase decisions. Here are some key facts:
30% of product research is done on Amazon vs. 13% on Google. -Forrester study, 2012
80% of the buying process is done before the first contact with your brand. -Marketing Dive study, 2015
70% of consumers want to hear about you via content (not your ads). -Social Media Today study, 2015
As I mentioned, you had better be waiting for them with what you want them to see. Think of marketing in two modes: vertical and horizontal.
This is the advertiser talking at consumers — TV, newspaper, magazine, radio, and other usual suspects.
Horizontal marketing is word-of-mouth, social posting, influencer marketing, blog posts, reviews, answer sites, and myriad other touchpoints that allow the above conditions to be satisfied.
If 80% of the buying process takes place before the first interaction with your brand, then “buy more media” will not be sound advice. All of the research mentioned in the AIRTAC model will be conducted in what we call the “horizontal digital infrastructure,” and there is one really important reason why: trust.
We all recall Google’s “Zero Moment of Truth” study that stated people check 10.4 sources of information, on average, to make a purchase decision. If you don’t have the horizontal Infrastructure to satisfy these inquiries, then you don’t exist.
Consumers will search in order to trust you, but if they don’t immediately find relevant info, they are gone, and you just lost a sale, as well as the pyramid of people who would have been influenced post-purchase.
“You may have just won $10 million from Ed McMahon and Publisher’s Clearinghouse Sweepstakes!”
If you are American and over 35, you remember those sales letters that used to come in the mail. They were pages long. Lester Wunderman, the father of below-the-line marketing, pioneered the research that discovered which font converted best, which headlines hooked, and a litany of other variables. Those mailers were the conversion marketing of yesteryear.
The reason they were so long is because different people hit the TRUST hook point at different places. $10 million? You have my attention, and I am interested. Now I’ll look for something to help me trust you.
Do people read? No. Enter yellow highlighting, red visual cues (arrows), and little handwritten notes on the side that said “read this!” These devices highlighted the answers to the most common questions, the barriers to conversion.
The same is true on the web — people will conduct a finite amount of research until they trust you, so your job is to create trustworthy digital infrastructure so you can be found, and ultimately trusted enough to lead to the next phase…
In a word, this is: conversion. Conversion can be defined as a purchase, a download, a sign-up, a like, tweet, or several other possibilities.
Conversion in an e-commerce context is purchase. Conversion for an auto maker would be lead generation, or a prospective customer filling out a form and submitting.
Audi or BMW? Tough decision. It’s not just buying a car, it’s joining a club, and the astute marketing team will take the opportunity to maintain a connections with those who have crossed the TRUST hook point.
Sending an email with a price promotion to encourage repeat purchase is quite a bit more cost-effective than paying for ads to get previous customers to come back.
Even better if that email is the result of an executed action from within a marketing automation workflow.
That is the AIRTAC model of modern marketing. In the spirit of the sharing economy, we will not trademark it, so use it at will (though a hat tip is appreciated).
The responsibilities of a modern, conversion-based agency go far beyond coming up with clever ideas and efficient media executions. Approach marketing in three phases, and cover them all:
1. Communication: the driving of traffic to a conversion funnel (perhaps without paid ads).
2. Conversion: converting that traffic to customers. This will be either purchase or lead generation.
3. Connection: maximizing customer lifetime value via marketing automation, and management of customer acquisition costs.
Get traffic, the lifeblood of your business, using the most intelligent, comprehensive, and far-reaching strategy. Then convert that traffic into customers using conversion optimization.
Finally, keep positive relationships with each of those trusting customers. Underneath this entire process is a stack of technology, tools, data, and marketing artistry.
But in the end it is simply making a sale, the reason why we are in business.
You are good at what you do, and your focus should be on creating your unique piece of value for the world. If you trust your marketing to an outside team, then you should pay for results, not merely the attempt at results.
Order a pizza, get a pizza.
Originally published on manzanita.jp on July 5, 2016.