Ad Agencies Don't Advertise

Nice editorial by Al Ries on the Ad Age web site today. What a great observation that advertising agencies don't practice what they preach.

The only industry in America that doesn’t believe in advertising is the advertising industry itself. Because they don’t do any.

Well, hardly any. And certainly nothing like the volume of advertising they convince their clients to spend.

Advertising is the communications backbone of America. Virtually every large company spends anywhere from 2% to 16% of its sales on advertising. That is, every large company except Omnicom, WPP, Interpublic and Publicis...

...If advertising agencies don’t believe in advertising, what do they believe in? What the advertising industry believes in is public relations. They bombard Advertising Age, Adweek, The New York Times, The Wall Street Journal, USA Today and other publications with press releases about their latest campaigns.

And why the intense interest in winning advertising awards? Awards generate publicity and publicity generates clients.

We looked through five consecutive issues of Advertising Age, and except for a few classified “help wanted” ads, there wasn’t a single advertisement from an advertising agency.

“Do as I say, not as I do” seems to be the motto of the agency establishment. They sell advertising to others, but they don’t buy advertising for themselves.

Simply Hang it and Hit it

Today at Sam's Club I found pre-filled piñatas. I've seen pre-made piñatas before, but never pre-filled. I'm not sure if this is an illustration of laziness or just a logical line-extension for a candy company catering to time-starved consumers. Either way it's congruent with my belief that people don't like to prepare food anymore. They want it mass produced in advance.

Strength in Numbers

I heard this in church on Sunday:

A single horse can pull two tons. You'd think that it would make sense that two horses could then pull four tons. However, their combined strength is far greater than their sum. Two horses working together can pull eighteen tons.

We attended Glen Lake Community Reformed Church this week. This was our first trip to Glen Lake in three years. It's as beautiful as ever. The weather was iffy as usual. We batted about .500 on sunshine and warm temperatures.

Amazingly, Sleeping Bear Dunes National Lakeshore still seems empty. Glen Arbor seemed quite slow in general. It felt less busy than it did the last time we were there, which was a pleasant surprise.

We shot over 400 pictures and an hour of video. I may have to post a photo album.

Kicking the Tires Works Better

Eureka Ranch research has determined that demonstrations are three times more effective than testimonials. Doug Hall revealed another proven fact on Brain Brew today.

The effectiveness of kicking the tires is really common sense, and showing a product out of the box is always a better way to sell it. Knowing that it is three times more powerful strengthens the wisdom.

Aisle Surfing

No big surprises here, but still pretty interesting nonetheless:

Researchers at the Wharton School at the University of Pennsylvania analyzed data from tracking devices attached to shopping carts at a West Coast supermarket, finding that:

• We zigzag, we don't weave. Traditional thought was that shoppers systematically weave up and down each aisle as they shop. Instead, we tend to randomly zigzag around to particular aisles, avoiding whole areas of the store.
• We zip in, zip out. Once we enter an aisle, we rarely make it to the other end. We like short excursions. As a result, products in the center of the aisle often are ignored.
• We like it right. Maybe it's because we drive on the right side of the road, but we like to enter on the right, or turn right after entering a store. We then prefer shopping in a counter-clockwise direction. Shoppers entering on the left spend less time (and money) shopping.
• We're racetrack drivers. We don't spend most of our time in the aisles. We stick to the perimeter of the store, often called the racetrack, using it as our main road with quick side trips to the aisles we need. This means products displayed at the ends of the aisles near the perimeter are important for luring us in.
  

Based on Internet surveys of 2,001 shoppers, the Food Marketing Institute's annual "U.S. Grocery Shopper Trends" report found:

• We shop often. Shoppers as a whole go to the grocery store an average of 2.2 times a week, and nearly a third of us go three or four times a week. We spend an average of $92.50 per household each week. Hispanic families shop the most often -- six times a week.
• We shop at more than one place. More than half of shoppers report going to multiple stores. Although supermarkets are the primary place for buying groceries, more than 40 percent also shop at super-centers such as Wal-Mart and Target; one in four shoppers buy groceries at warehouse club stores such as Costco and BJ's Wholesale Club.
• We think the lines are too long. Those most unhappy with the speed of checkout lines at their supermarket: younger shoppers (in their teens through thirties), African Americans and single parents.
• We want it fresh. High-quality fresh produce and fresh meat are the top two things we consider when choosing a supermarket.
• We make a list. Fifty-four percent of us make a grocery list. Most likely to do this: women and older shoppers.
• We like self-checkout (but only if we're young): Younger shoppers say self-checkout is important. The older we are, the less we want to do it ourselves.
  

Online Stores Charge Based on Shoppers' Surfing Habits

...So says USA Today referring to a study by the Annenberg Public Policy Center of the University of Pennsylvania.

The Web lets shoppers easily compare prices, but it also enables businesses to quietly collect detailed records on a customer's behavior and preferences and set prices accordingly. Doing so is generally lawful unless it discriminates against race or gender or violates antitrust or price-fixing laws.

Stores aggressively try to retain loyal customers, while discouraging bargain hunters who check many sites for the lowest price. They are known within the industry as "bottom feeders" who have no brand or merchant loyalty.

We certainly have promotion "customization" such as loyalty programs, customer-specific coupons, targeted ads, etc. These things are standard practice -- and happen in plain sight. But I would be amazed if "price customization" is really that prevalent at this point. This smells like an Ivy League agenda and academics crying "wolf."

More Good Stuff from Brain Brew

W. Edwards Deming quoted by Doug Hall:

95% of failures are due to the system. 5% are due to the workers.

And this on brainstorming, attributed to BBDO Worldwide, the company that coined the phrase:

In big companies it takes an average of 7.3 brainstorming sessions to generate one big idea. However, in small, entrepreneurial companies, it takes only 3.3 sessions to accomplish the same task. Surprisingly, rational left-brained people are the key to success at brainstorming. Although they only attend half as many sessions as right-brainers, they generate twice the number of good ideas.

Never hold a brainstorming session without an engineer!

Brain Brew

I'm listening to gobs of podcasts these days. Podcasting is a wonderful invention. One of my favorites is Brain Brew from Doug Hall and David Wecker. The podcast is actually a syndication of their PRI radio program of the same name. Their vision says it all: "Brain Brew is to be to the 'American Dream' what This Old House is to home repair."

Their three rules of marketing are spectacular. These are the things you must tell the consumer before they will buy your product:

1. Why should I care?
2. What's in it for me?
3. Why should I believe you?

Target Dad

Today we received a Father's Day catalog from Target. It's all electronics, which is not a surprise. What is interesting, though, is that the dad on the cover is standing alone playing a Sony PlayStation Portable. He looks like any 30 to 40-year-old American guy, and he's playing a video game. Ten years ago no one would have even thought about putting a dad playing video game in a Father's Day ad. Now it's on the cover. What an amazing shift.

Ten Ways to Kill a Toy Company

Playthings reported today on comments from a recent speech by Toys R Us president, John Barbour. Much of it is common sense, but it's a good list for anyone in the consumer products business.

• Believe your product or brand is immune to competition—“Yes, believe that. Even Lego and Barbie have come under siege. That will give you some idea about how immune your product is. Paranoia is critical because one day you will be challenged…be paranoid everyday.”
• Dramatically cut product development investments when times get tough—“It’s new products that save a business—research and development. One day an inventor will save your company.”
• Be fourth to market with a worse mousetrap—“Just look at a buyer’s eyes after seeing five other exact same products.”
• Only your new products require care and attention—“It’s the old stuff that pays the bills till new products [gain acceptance].”
• Your profits are safe despite price erosion and product commoditization—“It’s the biggest issue facing our business today. If none of us are making money, none of us are buying product.”
• Stick with what you know—“Don’t go taking on things you have no knowledge of…recipe for disaster.”
• Only Wayne, Bentonville and Minneapolis matter—“It’s about the stores. Only when you get out to the stores do you see the packaging or the promo item gathering dust…store checking, I hate it. But that is where the business happens.”
• How little manufacturers know what customer flow is—“I see people thinking they are doing great by getting more shelf space. Little do they know it is the backside of a display that no one sees. You only find out things like that by getting into the stores.”
• Rarely get beyond the buyer—“You succeed by getting beyond the buyer.”
• Ignore problems, they’re sure to go away—“Problems are not like red wine, they don’t get better with age. Take problems head on and fix them.”
• A toy’s a toy’s a toy—“Believe that? I don’t think so.”