80/20 Market Research

Many years ago in graduate school, I took a seminar in advertising. The professor was a distinguished British gentleman who was a veteran of many years at the highest levels of the industry. This professor made it a point from the first day of class on to impress upon the students that advertising was a “weak force” that couldn’t do much more than nudge somebody to buy something they were already inclined to buy in the first place. Furthermore, he told us the people most likely to pay attention to a brand’s advertising were those who were already users of that brand.

Those sorts of proclamations from the professor took a little bit of the air out of my tires. As a child of ’70s and ’80s television, I had grown up believing that advertising was a powerful force that changed people’s minds on a dime and could persuade people to switch brands with just a little clever wordplay or a well-executed design. That was the whole reason I was in grad school studying it! I didn’t want to believe my professor’s arguments about advertising’s limitations. But ultimately, he convinced me by virtue of the fact that, like most Americans, I automatically accept any information delivered to me in a British accent as being authoritative.

Since then, I have seen for myself over the course of my career that the professor’s assertions were true, both about advertising and marketing as a whole. It is profoundly difficult to change people’s minds or behavior, even if your message can fight its way through all of the clutter of competing marketing that the target audience is doing its best to ignore. Word-of-mouth is much more likely to influence a consumer than anything the marketer can do or say.

I bring all this up because it provides some context for my appreciation for a piece by Ray Poynter that was recently featured on the GreenBook Blog. Poynter argues that, in most cases, a marketer should focus 80% of its market research on its customers. This is in contrast to the way much research was done in the past, which tended to focus on the whole market. A major underlying assumption of the whole market approach is that it’s important to understand a lot about non-users of a brand in order to figure out ways to convert them. In other words, it assumes that marketing is a powerful force, fairly capable of overcoming the consumer’s skepticism, previous habits or apathy.

Focusing a large majority of the research on existing customers is more of a nod to the factors that my grad school professor was talking about – essentially that marketing works best when it is applied to consumers already positively inclined toward the brand. Or, as Poynter says in the piece, “In many cases, perhaps most cases, the best way to grow a brand is to increase the number of customers who ‘love’ it, because these people will recommend it, use it ostentatiously, and offer it in group settings. In most cases, a new line, a new campaign, a new service will only succeed if existing customers respond positively to it.”

It’s a very sensible approach, yet I suspect that a lot of marketers who should be following this 80/20 recommendation are devoting less than 80% of their research efforts on existing customers. It can be hard sometimes for even experienced marketing veterans to admit how much more powerful the consumer’s own inclinations and social peers are than our best-laid marketing plans. And if you don’t have an advertising professor with a persuasive British accent on hand, reading Mr. Poynter’s article in its entirety is the next best thing to remind you otherwise.


‘Mad Men’ Reaction: Episode 703

Disclaimer: Read no further if you want to avoid potential spoilers of Mad Men, Episode 703!

This week’s Mad Men was about whether the head honchos at Sterling Cooper & Partners would accept Don Draper back into the fold after his forced leave of absence. That was the official storyline, anyway. Lurking just below the surface, and in many ways linked to Don’s fate, was a story about SC&P deciding what kind of an ad agency it wanted to be.

From the very beginning, the show has portrayed Don as a creative genius. Presumably, the creative wizardry from Don, and later Peggy and Ginsberg, has been the main selling point to clients over the years. This season, the show has gone out of its way to suggest that the creative spark has left SC&P. Don’s replacement, Lou Avery, is a hack who embraces mediocrity, on top of being arguably the worst manager in a company brimming with awful bosses.

Lou Avery leaves a lot to be desired as a creative director, but you have to like his spiffy Mr. Rogers cardigans.

But agencies do not survive solely on creative prowess. In truth, although the creative product is what most people see from an ad agency, it isn’t the only service that agencies provide their clients. Some would say it isn’t even the most important one. Another major agency responsibility is media planning and buying — in other words, figuring out the best place to run the ads the agency creates and negotiating with media outlets like TV networks, magazines, newspapers, etc. to get the best rates for the time and space. While thoroughly unglamorous, the media planning function took center stage in the side plot of Episode 703 wherein a client puts SC&P media department head Harry Crane (who has evolved from an ordinary putz in 1960, to a putz who embraces every laughable late-’60s men’s fashion choice like it’s his mission in life) on the spot to explain how the agency’s computer compares to the one at Grey Advertising that had recently been featured in the New York Times.

Yes kids, this is what computers looked like in 1969.

I don’t think it’s a coincidence that Grey Advertising, a real-life agency that’s still around, got name-checked in that scene. For many years, Grey had a reputation, fairly or unfairly, as an agency that produced lackluster creative but built its success on the more mundane aspects of the advertising business. In other words, Grey represents the kind of agency that SC&P might morph into without Don Draper. Of course that would be a rough transition since, despite the grandiose lies he tells the client, Harry eventually reveals that SC&P doesn’t even have its own computer and isn’t close to matching Grey in that area. (Did we mention that Harry is a putz?)

So, the decision about whether to bring Don back becomes a long-range strategic vision choice among the partners over what kind of business they want to run: a place with a reputation for ideas versus a place with a reputation for being efficient. It’s a choice of genius versus stability, man versus computer. Or it least it could have been that type of decision. Ultimately, they bring Don back after they collectively realize that buying him out of his partnership would involve too much of a financial hit. In the end, the short-term bottom line trumps any kind of philosophical considerations. Just another reason why Mad Men is the most realistic workplace drama on television.

Atari Archaeology

During my years in the newspaper industry, an embarrassing typo or omission in the paper would sometimes lead coworkers to invoke an old adage: “Doctors bury their mistakes. Newspapers print theirs.” I was reminded of that saying after reading in the news about the confirmation of the oft-repeated rumor that thousands of unsold “E.T. The Extra-Terrestrial” Atari video game cartridges had been dumped in a desert landfill. A documentary film crew has apparently unearthed several hundred of the cartridges. The E.T. game was widely considered one of the worst of all time and its failure is blamed for helping to kill Atari and seriously damaging the video game industry until Nintendo came along and rescued it a few years later. With that reputation, it’s no wonder someone was eager to literally bury that mistake.

This story begs two questions:

  1. If the cartridges had remained buried for hundreds or even thousands of years and were unearthed by a future civilization, would the future archaeologists infer, based on the sheer number of units, that the E.T. game was highly popular and culturally important to 20th Century Americans? That seems likely, and makes one wonder if the artifacts we have collected from the ancient world are really just so much unwanted merchandise that Sumerian, Egyptian, Roman, et. al. merchants weren’t able to unload on the consumers of their time.
  2. Is there a similar landfill out there containing all of the unused AOL Free Trial CDs from the 1990s? If so, the landfill would of course need to be many times larger than the entire state of New Mexico to hold them all.

The next big landfill discovery?

As a final personal aside, it should be noted that I owned an Atari 2600 back in the day and spent untold hours playing it. I never tried the E.T. game, but if it really was worse than other Atari games that were out at the time (e.g., Video Checkers, Tic Tac Toe, any number of ridiculously simplistic sports games) then the game designers deserved to have been buried along with the cartridges.

‘Mad Men’ Reaction: Episode 702

Disclaimer: Read no further if you want to avoid potential spoilers of Mad Men, Episode 702!

Just when I had settled in to write a weekly feature about the marketing principles at work in Mad Men, the show threw me a curveball and aired an episode that was remarkably free of any advertising-related content. Oh, there was a lot going on at the agency in Episode 702: workplace romance, casual racism, horrible treatment of employees by their managers, anxiety over stalled careers, and botched communication between people on different coasts as well as between people who were standing right next to each other — but precious little about the actual work that Sterling Cooper & Partners actually does for clients.

Amidst all those extracurricular activities, the episode touches on one of the show’s persistent themes:  that the people responsible for telling the public how happy life could become just by purchasing the right product are at least as unhappy as everybody else. In fact, the characters who are the most skilled in the art of selling the American Dream to the masses — Don Draper and Peggy Olson — are miserable and have personal lives that might charitably be compared to dumpster fires. Peggy in particular, reaches new lows in Episode 702, as she is revealed to have the emotional  maturity of a 13-year-old girl who doesn’t get asked to the junior high school dance and is later shown verbally abusing her put-upon secretary in a scene that is laden with depressing racial undertones.

The idea that advertising and other marketing-related fields are heavily-populated by dysfunctional, shallow, often generally awful human beings is not unique to Mad Men. In popular culture, the idea goes back at least as far as the 1947 Clark Gable film The Hucksters, which portrays the advertising industry as a place where only unprincipled scoundrels could succeed. And then there was the 2008 headline from the satirical website The Onion that read, “World’s Worst Person Decides To Go Into Marketing.” During the six decades in between, fictional portrayals of people working in advertising, public relations and other marketing jobs have frequently painted such characters as alcoholics, liars, vain, empty suits, manipulators, irredeemably cynical or general personifications of “What’s Wrong With Business Today.” Over the course of its run, Mad Men has certainly featured a rogue’s gallery of all of the above.

This is the part of the post where you may be expecting me to get all indignant and outraged about unfair media stereotypes, but that’s not going to happen. Generally, I laugh at people who get bent out of shape about stuff like that. It’s like the great Kurt Vonnegut once said: “Any reviewer who expresses rage and loathing for a novel is preposterous. He or she is like a person who has put on full armor and attacked a hot fudge sundae.” Besides, while I do believe that marketing, as a profession, is often drawn with broad, overly-simplistic strokes in popular entertainment, I believe the same is true of most professions. Novels, movies and TV shows are routinely littered with doctors, police officers, lawyers, farmers, politicians, army generals, et. al. who are nothing more than one-dimensional embodiments of persistent, intellectually-lazy stereotypes. It would be unrealistic to expect marketeers to get special treatment in that regard.

Finally, I will say that over the course of my career, I have never observed my peers in marketing to be categorically different than anybody else in the workforce. And I definitely don’t sense that real-life marketing professionals are more prone to Don Draper-esque moral lapses or disastrous interpersonal relationships than anybody else. That said, I hope that Don himself continues to be prone to them. They are what make the show worth watching.

Test Marketing

If you have a school-aged child, or you’re a teacher, or if you just know a teacher, you are probably aware of the Common Core State Standards Initiative. If you’re not familiar, the two main things you need to know about Common Core for purposes of understanding this post are: 1. it is an initiative to standardize what K-12 American schoolchildren should know in English Language Arts and math at the conclusion of each school year, and  2. it is extremely controversial and under attack on numerous political fronts, left, right and center.

In New York, a state that is both an early adopter of the Common Core standards and the site of a large-scale grassroots campaign opposing the initiative, Common Core is facing renewed criticism because the standardized state English tests invoke a great number of brand names, including Nike, Barbie, iPod, Mug Root Beer and Life Savers. For example, students who took the test reported that one question began, “Just Do It’ is a registered trademark of Nike…” 

Critics believe that dropping brand names in these tests unfairly exposes children to marketing messages and commercializes public education. The state Education Department denies that mentions of brands are the result of paid placements or endorsement deals. Several of the companies whose brands are mentioned have likewise denied involvement, as has Pearson, the company that produces the tests for New York.

It should be noted that Pearson’s involvement in the process is one of the more controversial aspects of Common Core. Many people object to the extent that the for-profit assessment company has become intertwined with public educational policy. From that standpoint, the controversy over the brand names represents a thorny public relations challenge. Not only does the issue irritate people on its own, it also serves to remind them of one of the things that made them uncomfortable about Common Core in the first place — fear of their children’s educations being co-opted by corporations.

As the parent of school-aged children in New York, I have some fundamental problems with Common Core that go way beyond a passing mention of Life Savers on a test question. Putting my feelings as a parent, a citizen of New York State and an opponent of Common Core aside and speaking strictly from a marketing standpoint, I think it would be a good idea for the state and for Pearson to stop putting brand names on the tests. Having them there just adds more fuel to an anti-Common Core fire that’s already burning red-hot from Buffalo to Long Island. Even if the tests aren’t part of some stealth campaign to market to children — and there does not appear to be any evidence that they are — the optics are simply horrible. This is a case where even the appearance of potential impropriety can cause a lot of damage. For a company that’s already taking a PR beating, Pearson has led with their chin on this issue. Their best course of action would be to quietly remove the brands from future tests and let the issue die.

Finally, in the interests of full disclosure, I teach a class where the lectures, textbook and yes, the tests, frequently mention many real-life brands. Of course, I teach marketing to adult college business school students, where recognizable brands like Nike, Apple and Procter & Gamble are a major part of the subject matter. I think those are pretty significant distinctions from, say, a third grade English assessment, but just in case somebody wants to beat me over the head for hypocrisy on the issue, I figured it’s best to just hand them a club right now and get it over with.

 

‘Mad Men’ Reaction: Episode 701

When I began this blog, one of the initial ideas for a regular feature was to do recaps of Mad Men episodes. After all, this blog is about discussing the impact of marketing on the broader culture. No TV show, now or probably ever, covers that ground better than Mad Men’s look at the world of 1960s advertising. Plus, it’s a fantastic show that’s worthy of analysis.

After this season’s premiere aired, I felt inspired to write about it, but quickly realized that I did not want to do a full episode  recap. There are a lot of good writers already doing that sort of thing, and providing in-depth, critical content analysis of an hour-long drama isn’t necessarily my strong suit. Instead, I decided that for the duration of the show’s run, I am going to provide a more informal reaction piece to every episode, discussing whatever aspect jumps out at me at the time. With that said, the remainder of this post serves of the first installment of the Marketing Smart Aleck’s Mad Men Reaction feature.

Disclaimer: Read no further if you want to avoid potential spoilers of Mad Men, Episode 701!

This episode resonated for me as it featured a few lessons right out of the introductory Marketing Principles class that I’m teaching this semester. Early on in the episode, Joan meets with the young Marketing Director of  Butler Footwear, one of the agency’s clients. The kid is a smug, freshly-minted MBA who wants to end Butler’s relationship with Sterling Cooper & Partners and handle the advertising in-house. He  begins the conversation by lecturing Joan about his focus on the “Four Ps” of marketing, which actually says a lot about the character, the time period and the subtext of the scene to viewers who understand what he is referring to.

The Four Ps, also known as “the marketing mix” were a fairly new concept to the business world in 1969, when the episode is set, but are now standard-issue orthodoxy for anyone who works in marketing or has taken a college marketing course. In my class, they are covered in the very first lecture. For the benefit of the uninitiated, the Four Ps refer to the four broad areas that marketers need to concern themselves with: Product, Place, Price and Promotion.  Product and price are self-explanatory. Place refers to both the locations where customers can obtain the product as well as the distribution channels that the product moves through along the way. Promotion refers to all of the different ways that a marketer makes customers aware of the product and tries to encourage purchase. Promotion includes advertising, but also additional elements like public relations, personal selling, and sales promotions.

By invoking the Four Ps, the young executive wasn’t just showing off his fancy new business school jargon, he was also telling Joan that advertising was just one component of his holistic approach to marketing, and a shrinking one at that. He was also — as Mad Men is so good at doing — giving us a history lesson about the development of marketing in America. In the 1950s and most of the 1960s, advertising was the undisputed king of selling products to the masses. Real world Madison Avenue giants like Ted Bates, Rosser Reeves and David Ogilvy, along with their fictional contemporary Don Draper, held sway. In that era, the conventional wisdom was that selling a product was all about what you said and how you said it via advertising. By the end of the 1960s, that mindset was beginning to give way to acknowledgement that the success of the product was also heavily influenced by considerations like developing features of the product to match consumer wants and needs, price points, where and how the product was made available in the marketplace, and using coupons, rebates, in-store merchandising, etc. to stimulate sales. All of those were considerations prior to the 1960s, of course, but modern marketing represented the first widespread attempt to deal with them scientifically, as part of a structured system — inevitably at the expense of many traditional advertising budgets.

That last point gives us some clues about the subtext of the episode, and I suspect the trajectory of the final season of the series. It suggests that we are entering a world where Don Draper and his cohorts at the agency are much less relevant than when we first met them in 1960, not only because all of the hippies in 1969 were rejecting materialism, but because Corporate America was exploring new ways to sell things. The magic of Don’s slicked-back client pitches, reliant as it was on his personal charisma and the mystique of “The Big Idea,” is waning and giving way to a more systematic, data-driven, prosaic reality. That is to say that the series narrative is winding down at the same historical point that a widely-regarded Golden Age of Madison Avenue was coming to a close. No ending for Mr. Draper and company could be more fitting.