To know if advertising works,
ask someone who measures effectiveness

Digging around in my archives this morning for something else, I happened upon this memo. I wrote it and sent it to my boss 24 years ago, when I was Intermountain Healthcare’s corporate advertising manager. I am sharing it with you today because the point still holds up.

I noted with interest an article on page 40 of the July issue of Hospitals magazine. The focus of the article is that 55 percent of hospitals do not track ad results. What I find interesting is that hospitals who do not track ad results rank advertising sixth as a marketing priority (on a par with word-of-mouth), while those who do track ad results rank advertising third, right behind quality of care and staffing.

In other words, those who have reason to know what they're talking about rank advertising higher than those who don’t.

—Steve Cuno

Marketing abuses: the real and the imagined
 
A recent study reported that test subjects who saw a sense-appealing popcorn commercial later recalled, incorrectly, having sampled the popcorn. Citing the study, The Skeptics Guide to the Universe podcast (SGU), a reliable science show of which I’m (still) a huge fan, engaged in an ill-informed, sensationalistic rant about the manipulative powers of marketing. These folks do their homework and tend to know their stuff, so this was out of character. I wrote and sent the reply below. No word back just yet.

Right up there with the Evil Scientist and Evil Skeptic is the Evil Marketer stereotype. When people ask what I do for a living, I sometimes wonder if I wouldn’t be better accepted if I said, “I steal wheelchairs from the non-ambulatory.”

So, since I’m an admitted marketing guy, I anticipate that some listeners will dismiss what follows as naught but my paltry attempt to defend my evil ways. Alas.

Last week’s discussion on marketing left me concerned that we may be warning people about non-existent or at least less-existent marketing dangers, while possibly diverting attention from a prevalent one.

Marketers truly have a horrible and powerfully persuasive technique at their disposal. A good many wield it unabashed. But the technique doesn’t consist of manipulations that lure people unawares (which I’ll get to in a moment). It’s more blatant than that. 

The technique to which I refer is called “lying.”

A number of examples spring to mind: flimflam health products and treatments, diet plans, multilevel marketing schemes, mortgage scams, stock market buy/sell software, and anything even remotely connected to Kevin Trudeau.

None of these marketers relies on the kind of sneaky manipulations discussed in last week’s podcast. They just out-and-out lie. And it works.

Some lie legally, by use of omissions, weasels or tiny disclaimers that contradict the large print. Some lie illegally, playing the not-bad odds that regulatory agencies and class-action suits won’t catch up with them. Meanwhile, the public, feeling secure in the erroneous belief that caveat emptor is over and done with and that “ads can’t say what isn’t true,” hand over their wallets and, very often, their health or personal safety.

So before we get too wrapped up in exposing subtle psychological manipulations — which few marketers use, and to little measurable effect — I think it’s important to alert the public to good old, old-fashioned lying — which lots of marketers use, and to great effect.

I’m not saying that marketers don’t look for ways to manipulate. They do. They conduct studies like the popcorn test cited last week, studies that track eye motion when people look at an ad or webpage, studies that track EEG readings while exposing people to ads, plus conduct oodles of focus groups, surveys and interviews, and more. 

Let them. The resultant manipulations and their alleged power are more the stuff of legend. I know this from my own work in tracking marketing performance, and from following the work of others who do likewise. Many allegedly successful marketing techniques — including those that sound like they ought to work, those that legend holds truly do work, and those that seem to have an effect in the lab — fail miserably in the real world. 

Tellingly, marketers who track sales directly attributable to their work tend not to bother with such studies and tactics. It is mostly academics, and marketers who resort to indirect measures (like recall or awareness scores), who are taken with them, and even these seldom use in actual practice what their tests allegedly show. Also telling is that articles about such tests and manipulations rarely show up in the marketing how-to trade press, but rather in the popular press instead. 

Here is what tracking consumer behavior in the real marketplace as opposed to in a lab continually reveals: a straightforward presentation of product features and benefits almost always outsells a would-be manipulative approach. 

Which means that a dishonest marketer is better off simply lying about features and benefits than troubling with psychological tricks.

That makes sense if you consider the testing environment as opposed to the real world. TV commercials, for instance, are tested in a darkened room where attention is focused on a screen. In the real world, a marketing message must fight for your attention between American Idol segments, at which time it is up against bathroom trips, fast-forwarding thanks to TiVo, channel surfing, mute buttons, conversations with others in the room, texting, checking in with Facebook, web surfing, flipping through a magazine, talking on the phone — or any possible combination of all of the above, all at once. If I told you that a hypnotist or psychiatrist could craft a 30-second message which, in that environment, could program you not only to want a product, but to go out days or weeks after being exposed to the message and buy the product without fully knowing why, you’d laugh me out the door. Yet, somehow, turning the villain into an evil marketer makes it seem plausible.

One reason it’s easy to overestimate the power of marketing is that we see the hits while the misses are quietly retired. You probably haven’t heard much about Bic disposable underwear (yes, from the Bic pen people), Colgate frozen gourmet dinners (from the toothpaste people), or Gerber pureed creamed beef for single adults (packed in relabeled baby food jars). I’m not making those up. They were planned, tested, executed and marketed by experts with huge budgets and every trick of the trade at their disposal. Yet somehow the public managed not to be manipulated and responded with a resounding “no thanks.” 

Nor are such flops the exception. Marketing history brims with them. More products fail than succeed. More ad campaigns have no effect than positive effect. Some ad campaigns, even popular ones like the Taco Bell Chihuahua, actually drive sales down. 

Not too impressive for an industry that allegedly controls minds.

For that matter, so-called successes are smaller than many might imagine. Prior to the current recession (I don’t have current stats), direct-mail credit card marketers celebrated if they pulled a 0.04% application rate with an approval rate of well under half. This “success” could equally be expressed as a 99.8% failure rate. Nor was it clear that the less than 0.02% who applied and were approved would become profitable cardholders. This is not an unusual example.

I don’t mean to convey that no advertising works. Of course much of it does. But much more of it fails. Much more, in fact, than most people, advertisers included, realize. And successes tend to be incremental, not gargantuan.

Nor do I mean to convey that there is no marketing knowledge as to techniques that tend to sell and techniques that tend not to sell. There is plenty. Most of it has to do with removing barriers, however, not with manipulation. An example of barrier removal: More people will call a toll-free number from a TV commercial when the number appears on-screen for 20 seconds and an announcer reads the number out loud three times. No manipulation there. It’s a simple case of making it easier for a viewer to write down a number. Here’s another one: Women’s clothing marketers find that when a man accompanies a woman to a clothing store, the woman is more likely to spend enough time to make a purchase if, right outside the dressing rooms, the man is provided with a chair and a TV tuned to a sports channel. Call it manipulative if you like. Most men call it merciful.

But as for the likes of “if you can sneak your product into someone’s mind and get it to stick there, sales will go up,” “creativity sells,” or “people buy the sizzle, not the steak” and so forth: controlled, real-world tests show these things to be utter balderdash. Even though many marketers themselves believe them.

Here is good news for those who insist that marketing in all its forms is the Antichrist: marketing techniques that have been validated in the real world are largely ignored by the lion’s share of marketers. That’s why you see so many commercials where a phone number appears for less than five seconds and is not read aloud at all, and why so few chairs and TVs are found near dressing rooms. This may seem surprising where profits are involved. But like most people, marketers prefer cool-sounding myths to banal facts. And many advertising agencies and marketing firms are only too happy to capitalize on their clients’ belief that what they do constitutes some kind of black magic. In fact, many advertising agencies and marketing firms believe it themselves.

Like science, genuine marketing knowledge is no more nor less than that: knowledge. Just as we can use science to feed the hungry or blow up cities, we can use marketing to rip off the unsuspecting or to provide good information about good products. When skeptical organizations such as the James Randi Educational Foundation advertise The Amazing Meeting in Skeptic Magazine, the Skeptic’s Guide to the Universe sells fundraising seats at a dinner, George Hrab sells CDs, Free Inquiry magazine mails a subscription offer or, for that matter, when a commercial persuades me to see a movie or buy a product that I end up enjoying, these are all instances of, I hope you’ll agree, marketing’s good side.

Not all, possibly not even most, marketers knowingly deceive anyone, but there is an overabundance of those who do. And, yes, we need to be concerned about other messages that marketers send, whether or not they directly affect sales. I’d encourage skeptics everywhere to go after deceptive and irresponsible marketers with a vengeance. This begins with not buying from them, followed by raising our voices against them. I try to do my part from the inside, as you’ll see from the links below. 

But fair is fair. I’d also encourage skeptics to reward marketers who play nice.

Thanks for indulging this lengthy response. I worry about having shortchanged my argument in an attempt to be even this brief. If you’d like details or wish me to back up any of the above claims, I’m at your service.

Love the show. Please keep up the great work.

Best regards,
Steve Cuno

P.S. In my own work, I take on the liars. Some links if you’re interested:
http://www.delivermagazine.com/2011/05/how-ethical-is-your-direct-marketing/ http://www.directmarketingiq.com/article/on-morality-marketing-415891/1
http://adage.com/article/news/results-vary-ftc-rules/135227/ (scroll down to the comments section)

How not to advertise your auto dealership

If you want people to visit your auto dealership, may I suggest relevant advertising. 

It’s not easy. When your competitors run irrelevant advertising — which they do, ad infinitum — it would be quite reasonable for you to assume that they know what they’re doing and imitate them.

I just passed a billboard showing a large photo of a side mirror, with a headline telling you that a dealer who listens is closer than it appears. I suppose the advertiser thinks the board is clever, which is debatable in and of itself. More to the point, the dearth of good-listener dealers is hardly a hot topic at the dinner table. Dealers who expect prospective car buyers to place hand on heart and say, “This, this is what I’ve been waiting for” are in for a disappointment. 

Provided, that is, they know how to track sales from the campaign. Most don’t, so perhaps they are safe from disappointment after all.

Or, take the ubiquitous “service after the sale.” At least one dealer tried (and failed) to clever it up with “We back up every car we sell.” Given that most new cars come with a warranty, post-sale service is hardly a surprise. Do not count on it to serve as a Unique Selling Proposition unless and until your competitors run ads that say, “After the sale, go to hell.”

Then there’s “we’re not pushy.” There are three problems with that one: 1) These days, so many dealers push non-pushiness that it sets no one apart. 2) Even if it’s true that your sales staff never push, which I doubt, no one believes it. 3) Though the pushy dealer stereotype is a common consumer complaint, its lack is hardly a draw. So you don’t push? Fine. What do you do?

There is no shortage of dealers who blather about low prices. Advertising low prices builds a preference for comparison-shopping, but not for your dealership. Moreover, unless you’re Wal-Mart, “low price” comes off only as a token line that no one takes seriously.

Building a relevant brand for an auto dealership is difficult, especially since each line you carry comes with a brand of its own. That is precisely why so many dealers default to cleverness (or so they think) or showiness in hopes of attaining, substance aside, name recognition. 

So, how do you create consumer preference for your dealership? See Paragraph Number One above: Try relevance. As for how you go about getting there, well, come on. You can’t expect me to give away every secret for free.

—Steve Cuno