Think Differently!

October 27, 2011

That’s what Steve Jobs did. Even though he revolutionized the digital era, he did not think much of the internet as a branding medium. While everyone was jumping on the digital bandwagon, Jobs effectively remained “old school.”

In 2010, Apple spent an estimated $420 million on advertising. Over 90% of that budget was allocated to network television, newspapers, magazines and billboards. Less than 10% went toward digital initiatives.

And when Apple did spend online, it was usually an extension of a TV campaign like the iconic Mac vs. PC ads.

Jobs also believed in controlling the message which files in the face of the current wisdom that consumers should tell the brand story via Facebook and Twitter. Upon his death, Apple barely had a presence on either platform.

Throughout his brilliant career, Jobs created products for the masses. And he wisely chose mediums that targeted the masses. In advertising, as in product development, he relied heavily on his convictions and intuition. He did not rely on “likes” or “tweets.” He took a much more pragmatic approach: tell the story of how an amazing product can change a consumer’s life in the best environment possible. And then he was smart enough to understand that the best environment – then and now – is still traditional media.


All that glitters isn’t gold!

October 19, 2011

A new survey of marketers conducted by the Association of National Advertisers has discovered something interesting, but not terribly surprising about the new media rage.  According to the survey, more national companies are dedicating larger portions of their ad budgets to new media.  But it also finds more companies questioning the effectiveness of their new media investments.

78% of companies surveyed said that they planned to spend more on new media like online ads, social networks, search engine marketing, mobile and viral video in 2012 than they did this year.  On average, this represents 14% of their total media spending – up from 10% in 2011.

So, with more spending come better results, right?  Not necessarily.  Compared to a similar study in 2009, marketers in general, are complaining that bigger investments in new media are not always producing the desired results.

“While marketers have substantially increased their use of new media platforms over the past few years, they are beginning to question the effectiveness of some of these vehicles,” Bob Liodice, president and CEO of the ANA said.  “The ANA survey indicates a strong willingness by marketers to integrate innovative new approaches into their marketing mix; however, this enthusiasm is tempered by concerns regarding the ROI of these emerging options.”

Or in other words, anyone who thought that new media was going to quickly transcend old media (i.e. television) was perhaps blinded by all the glitter.


TV Advertising Helps 3 Auto Brands Stand Out!

November 11, 2009

Picture for Post #39

 

What do Hyundai/Kia, Subaru and Volkswagen all have in common?

1) They spent considerably more on television advertising for the first 6 months of 2009, as a percentage of their ad budgets, than the auto industry average.  

Brand

% of ad budget spent on TV Advertising

Hyundai/Kia 

78.4%

Subaru 

90.0% 

Volkswagen 

80.7%

Industry Avg. 

62.5%

2) All three auto makers saw their market share increase substantially over the same period a year ago.

Brand  Market Share Increase 
Hyundai/Kia  39.7%
Subaru  52.9%
Volkswagen 28.8%

3) All three posted year-over-year unit sales decreases (every single manufacturer suffered decreases in sales during this period) that were considerably less than the industry average.

Brand  Unit Sales Decreases 
Hyundai/Kia  -9.4% 
Subaru -0.8%
Volkswagen -16.4%
Industry Avg. - 35.1%

4) All three brands allocated a smaller percentage of their ad budgets to Internet advertising than the industry average:

Brand  % of ad budget spent on U.S. Internet Advertising
Hyundai/Kia 3.7%
Subaru 5.4%
Volkswagen 4.0% 
Industry Avg. 7.5%

What do I think?

First of all, I think all three auto makers have done a great job bringing products to market that people actually want to buy. That’s most important to remember.

I also think it’s hard to refute what the data above says about their advertising decisions. There’s no denying, I’ve seen a ton of compelling television commercials for Hyundai, Subaru and Volkswagen this past year … and it would appear I was not the only one. 

I don’t care how the new media crowd spins it, when a brand like Subaru spends 90% of their total ad budget on television and is able to increase market share by 53% — it makes a compelling case for the power of television advertising. Short and simple.

And when you add in the impressive sales performances by Hyundai and Volkswagen, it’s even harder to ignore that television played more than just a casual role in success of all three auto makers.  Wouldn’t you agree?

Source:  TNS Media Intelligence/Automotive News

 

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Retailers: Think Twice Before Cutting Back Your Ad Spending

August 18, 2009

Picture for Blog #9A new study by ThinkVine, a Cincinnati analytics firm, offers evidence that cutting out ad spending during a recession can have harmful consequences.  

The firm that does predictive media modeling for marketers such as PepsiCo, and Colgate-Palmolive, found that although companies can usually get away with cutting media spending in the short term; cutbacks over 16 weeks can start to erode sales volume. 

The firm analyzed the effects of turning off all advertising entirely for a year on one unnamed brand.  It then studied the effects of turning it back on the next year at prior levels.  Here’s what they found: 

  • For about 16 weeks, sales volume was about the same. 
  • By the end of year one, however, sales volume was about 20% lower without advertising than with it. 
  • Turning the advertising back on in year two, reversed the sales decline as the brand began growing again at the same rate before the advertising was stopped. 
  • However, the advertising was not able to close the gap in sales compared with what it would have achieved had it maintained media spending for both years. 

Different brands respond differently to media cuts, but for many – getting back sales and share lost from cutting budgets can be a lengthy and an expensive process. 

ThinkVine CEO, Damon Ragusa, said it best:

“The cost of getting back what you lose is often greater than the savings of not advertising.”

 

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