Collective Voices

By Tim Maroney

Every seasoned advertising manager has heard the 1934 quote from Philadelphia’s famous haberdasher John Wanamaker, “I know half my advertising doesn’t work. I just don’t know which half.”

For 75 years after that, neither advertising agencies nor their clients worried too much about which half wasn’t working, so long as half did. Actually, direct marketing pioneer David Ogilvy figured it out. He knew that the half of the advertising that didn’t work was likely to be the part where the client was telling customers what to think rather than giving them a benefit and an offer and letting them decide. Of course, he went on to build an advertising empire around that idea which still endures today.

In the meantime, most advertisers and agencies did try to mitigate advertising’s negative half-brother through pre-advertising research focus groups, mall intercepts and one-on-one interviews, etc. Over time however, the cost, resource utilization and sample size limitations of these programs have made them less attractive and proved to be less reliable than other means.

And, in a digital world where analysts measure a company’s performance and value on a quarterly basis (or less), who has the luxury of a 90-180 day advertising campaign planning and development schedule? Plus, in today’s pervasive social media environment in which customers control the conversation how nimble you are in responding to consumer preferences can be key to engaging them with your brand.

Fortunately, one of the big benefits of social media is that it has spawned a variety of related technologies that enable advertisers to track, manage and evaluate customer behavior faster and cheaper and with greater accuracy than ever before. For example, the availability of online consumer panels that can be geo-demographically segmented then polled overnight means that advertisers no longer have to wait until after they run their advertising to find out if the message resonates with their customers and how likely consumers are to respond to the ads.

This means that today there is no excuse for bad advertising. Here is a case in point: Our agency recently conducted an overnight poll to determine which of four print advertising concepts would be preferred by our client’s demographic and to which ad they would most likely respond in advance of buying the media to support them. In 24 hours we had a definitive answer. Happily for the agency, consumers preferred the ad we recommended to the client.

The value of having tools like these maximizes the opportunity for successful advertising and can reduce the “other half” to a statistical anomaly. Just for fun, review the ad concepts we tested below. Then click on the link at the bottom to see how your preferences compared to the actual survey results.

Just for fun, review the ad concepts we tested below.

Then click on the link at the bottom to see how your preferences compared to the actual survey results.

www.bbgintegrated.com/testresults

By Tim Maroney

If you are like me, this holiday season was a mix of confusing and astonishing consumer behaviors. How do you reconcile watching hordes of pepper spray toting holiday shoppers fighting their way into stores to buy the latest version of Nike’s Jordan Air sneakers with Americans’ continued bleak assessments of economic conditions, both with respect to the national economy and their own financial situations?

So, what is really going on here? Well, it may be that they saved for it.

Recent Pew Research reports show that Americans may have turned a corner in the recession long before their politicians, because they are both saving more money and rethinking which items are worth buying. As a result of what’s been happening with the economy, 60% of Americans say they are changing the way their money is saved or invested, up from just 48% two years ago; 32% say they have adjusted their retirement plans.

And, U.S. Department of Commerce studies show that Americans put aside an impressive 6.4% of their income after taxes last year. By comparison, Americans were saving less than 2% in 2007 just prior to the recession.

They weren’t just saving for Christmas, either. About a third of adults say they had an unexpected expense in the past year that “seriously set [them] back financially.” Among this group, the most oft-cited such expense is medical (34%), followed by car-related expenses (24%) and home and housing related-expenses (20%).

What are the implications of this to advertisers? Perhaps the longer the recession lasts, the more there is pent up demand for what consumers now regard as ‘essential’ goods and services. For example, are auto sales up because more people have more money, or because a car that was two years old in 2008 is now six years old and needs to be replaced?

The new savings paradigm also suggests that advertisers should realign their thinking about where the opportunities are in the struggling economy and reconsider programs like charging customers $5.00 a month to use their debit cards, vs. getting a share of the additional 6.4% of consumers’ new savings.

Food for thought as we enter the New Year.

By Steve Mamarchev

Car enthusiasts concur that Hyundai has superb products that are getting better each year. Its Genesis and Sonata models are exemplary. And, if you really want to be wowed, take a look at its flagship product, Equus. Simply breathtaking at its price point.

Engage Customers By Emphasizing Benefits

I recently saw a two-page spread in Newsweek and The Economist magazines promoting Hyundai’s new 2012 Sonata Hybrid. It contained a lot of techno-speak about Hyundai’s new lithium polymer battery, and sounded more like a conversation between auto engineers. My reaction was the company may have missed the mark in communicating what’s important (the benefit) to consumers when it comes to buying hybrids and other alternative fuel vehicles.

According to an April 2011 J.D. Powers survey, the most important thing influencing consumer purchasing of hybrids is fuel economy and cost of vehicle operation. Consumer preferences for hybrid features start with mileage, then vehicle cost (hybrids tend to cost more than gasoline powered vehicles). Maintenance ranks third in preference and that is where battery reliability is important, because many consumers are wary of how much it would cost to repair or replace one. Surprisingly, saving the environment ranks fifth among consumer preferences.

Customer Expectations & Information Needs

My suggestion to manufacturers is this: Focus on customers’ expectations and their need for information. I may be a consumer research marketing professional, but I’m also a consumer. I want to know the MPG and range on a single charge and tank of fuel, the MSRP cost of a hybrid versus a similar gasoline-powered car, and the projected cost savings over three years of ownership – in other words, the benefits of ownership.

By placing so much emphasis on its new technology, as impressive as it is, manufacturers like Hyundai run the risk of tuning out their potential customers. Communicate the benefits, not the attributes. That’s what engaged dialog marketing is all about.

By Tim Maroney

A recent J.D. Powers and Associates report has confirmed what many of us have expected for years, serious uptake by consumers of alternative fuel vehicles (AFVs) and plans by more manufacturers to develop and get them to market is gaining traction.

Even though sales of AFVs are down this year (largely due to production problems following the devastating tsunami in Japan), Honda’s sporty new CR-Z is selling almost as fast as dealers can get them.

I recently visited a Honda dealership to test drive the CR-Z, and everything about it says “excellent economy.” Then, when I took my wife with me back to the dealership the next day, the car I drove was already gone.

Annual sales of electric drive-train vehicles in the U.S. have grown from 732,000 in 2010 to 940,000 in 2011, according to the Powers forecast. General Motors has no fewer than eight hybrids on its product line now and, another Powers report says the number of hybrid options available to consumers in 2012 will reach more than 40. At the same time, technological advances — from fuel cells to compressed natural gas — are being driven (pun intended) at a dizzying pace.

Fuel cell powered vehicles should receive government approval by 2014, and natural gas powered vehicles are close to production now. Should Congress get around to passing the “Pickens” bill anytime soon, tax incentives for buyers and users of natural gas powered vehicles will create enough demand to motivate service station owners to install natural gas fuel pumps (more than 1,000 U.S. gas stations have them now).

It would be great to say that all this activity is due to a widespread acceptance of global warming and serious personal commitment to improve the environment, but, rather, I think it’s recognition that the competition for the remainder of the world’s oil supply from emerging economies like China will keep gasoline prices unacceptably high for the foreseeable future. And that is a less sustainable option in the face of adopting alternative fuel technology.

Tim Maroney is Director of BBG’s Automotive Marketing team. For more information, visit: http://bbgintegrated.com/Autoteam [PDF].

By Scott Burkhead

Driven by attractive consumer offers that cost their advertisers dearly, Groupon continues its rapid growth. But when will retailers begin to gravitate toward programs driven by smart, value added promotions instead of giving away the store? Jasper Malcolmson, CEO of rival deal company Bloomspot, thinks retailers will soon reject money losing trial offers from Groupon and opt into services that offer fewer deep discount deals and more targeted promotions.

We think Jasper is on to something but neglecting a key issue: the majority of offers we’ve seen from either service are sadly lacking in any meaningful differentiation for the brand paying for the advertising. This is probably understandable as Groupon and its clones are the digital reincarnation of Valpak, which is rarely driven by either creative, or media strategy. This probably won’t change for Groupon’s core market of small, local retailers. However, to attract significant brands someone like Bloomspot needs to prove that Daily Deals programs deserve a spot in their media plans. Read the article by Tricia Duryee in eMoney for some great insights into this subject.

By Tim Maroney

For those of us lucky enough to be immersed in advertising New Media we love the holiday season because ours is a longer season than yours. That’s because Christmas and New Years are followed up in January by the Winter Consumer Electronics Show (CES) Show in Las Vegas.

Each year, electronics manufacturers, video gamers and other eccentric, but brilliant minds, trot out their new stuff. It’s an annual looking glass into our future.

The last few years have seen major technological advancements that seemed way down the road even before the Great Recession. Ideas like mass market touch screen computers, and location-based GPS applications with cell phones to carry them.

Some technology introduced at the CES Show advanced so far and quickly that it got replaced almost before it could be mass produced. Technology’s human equivalent of 15 minutes of fame. Remember tablet computers? They were almost the next big thing back in 2003.

This year we expect a lot to be said about advancements to 3-D televisions. Many will be on display and we can hardly wait to see them. That’s because the implications for the advertising agency business of having 3-D televisions in every home in the future is huge.

Broad acceptance of 3-D TV would bring a lot of excitement back into a ‘traditional’ media that has been drowned out at recent CES shows by the focus on other breakthrough technology like smart phones and Kindles.

Just imagine the possibilities for 3-D television advertising, or should we say Advertainment:

• Product demonstrations that would make John Popeil roll over in his grave (for those of you who are 12, he was the Veg-O-Matic guy. Ask your Dad).
• Virtual rides in new automobiles. Can’t wait for the BMW one.
• LeBron James dunking a basketball in your face while wearing what look like size 44 Nike sneakers.

There would seem to be no limit to the creative opportunities and revitalization that 3-D TV will bring into the ad business. But, here is the catch. 3-D televisions cost too much and the American people cannot afford them right now.

Moreover, many of the Hollywood films produced in 3-D over the last two years weren’t exactly blockbusters (anyone remember Alice in Wonderland with Johnny Depp? That’s ok, no one else does either). Then again, watching episodes of The Good Wife or any sitcom on 3-D TV may not get you to the point you would want to own one.

But, the investments are being made, the production systems are getting refined and I’m already thinking about how much a 30-second 3-D slot on the Super Bowl will cost in 2015 vs. a pithy high definition spot.

If this discussion seems premature to you, and you haven’t gotten the 3-D bug yet, because you can’t see beyond the glasses, then, like all other things CES you will not have to wait long to get bit. Apple this week announced that it has been granted a patent for glasses-free 3-D TV. Yes, really.

Do you want to see it? Here it is:

So, while all of you may be spending the weekend of January 1, 2011 singing Auld Lang Syne, or watching football, we’ll be thinking about the CES Show and saying “Bring It On!.”