Amazon Fire Phone

16 December 2014

If This Is Advertising “Effectiveness,” What Is Failure?

by Freddy Tran Nager, Founder of Atomic Tango + Marketing Analyst…

Add “effective” to the list of marketing terms that no longer mean anything, alongside “authentic,” “leader,” “revolutionary,” “disruptive,” and “engagement.”

According to a misdirected study by research firm Ace Metrix, in 2014 Samsung had 7 of the 15 “most effective” ads in the tech hardware sector, including the top 2. Of course, as everyone knows, Samsung had a terrible year, with third-quarter profits down 60% to three-year lows.

Also on Ace Metrix’s top 15 list: Amazon’s ad for its Fire Phone — a product that’s selling so poorly, Amazon’s had fire sales with it. And yet Ace Metrix claims, “Samsung and Amazon are both examples of brands that succeed largely by debuting product-focused ads that change consumers’ perceptions of the brand and create a desire for the product.” Apparently, consumers are feeling so much “desire,” they’re staying home and fantasizing instead of shopping. If that’s how you “succeed,” I’d hate to see struggling.

So how does Ace Metrix define “effective”?

The firm surveyed 500+ Americans and asked them to rate TV ads based on the attributes of Persuasion, Likeability, Information, Attention, Change, Relevance, Desire, and Watchability. Here are 3 reasons why the survey alone is worthless:

  1. Surveys put consumers in unnatural circumstances, asking them to pay close attention to an ad. A more relevant study would measure casual exposure to ads over time. Do consumers even remember seeing those ads? The effectiveness of certain ads changes over repeat exposures. You might not care the first time you see one — you could be feeling out of sorts or just not in a shopping mood — but if you see the ad repeatedly, you might finally buy the product or come to hate it. According to scientific research (not a survey) by Professor Byron Sharp, advertising refreshes the memory about a brand. That means researchers should study ad effectiveness over time, not in one-shot, knee-jerk-response surveys.
  1. Consumers don’t always respond truthfully or accurately to surveys, particularly if they feel put on the spot and they want to impress the researcher — or just themselves. That’s why marketers shouldn’t trust focus groups, and should study actual market results (like sales).
  1. The criteria — Persuasion, Likeability, Information, Attention, Change, Relevance, Desire, and Watchability — are so abstract and vague, even professional marketers would disagree on their meanings. After all, how “persuasive” is an ad if the consumer doesn’t buy the product? The criteria are also relative and subjective: What one person might find “likeable” could be detestable to another. And “change” (as in changing the perception of the brand) depends entirely on the person’s original perception. If someone already loves a brand, then a fantastic commercial from that brand wouldn’t change their perception — so was it ineffective? What if the ad made them fall out of love for that brand — does that make it effective?

By the way, guess who didn’t rank in the survey’s top 15?

Apple. And Apple is the core reason both Samsung and the Fire Phone are flailing. Apple spends heavily on advertising and does almost no social media or community outreach, so I’d wager that their ads are genuinely effective.

But what am I thinking to base ad “effectiveness” on sales? Who in their right mind would do that?

Well, ad legend David Ogilvy built a legendary agency on the premise that a good advertisement is one which sells the product without drawing attention to itself.” And he was hardly the first to express this sentiment: a Google search of “the function of advertising is to sell” turns up several older articles with those very words.

Ogilvy also noted that every advertisement should be thought of as a contribution to the complex symbol which is the brand image.” While the Ace Metrix criteria are brand-related (likeability, change, etc.), a stronger measure of a brand’s value is whether customers buy it in a competitive market and, even more importantly, whether they’re willing to pay a premium price for it over the competition. Again, Apple scores on that front: even though Apple’s ads didn’t make Ace Metrix’s top 15 list, people stood in line for the iPhone 6, paying hundreds of dollars even after carrier subsidies.

By contrast, Amazon is struggling to unload the Fire Phone, which you can get for free (with carrier contract) without ever leaving your home. While Amazon is extremely well-respected in ecommerce, when it comes to smartphones, their brand has a long way to go — and perhaps millions more in “effective” advertising — before they can rival Apple.

Samsung is losing out to both Apple at the premium level, and to Chinese brands on the discount level. What does that say about their brand? Samsung spent $14 billion on advertising worldwide in 2013 (“the biggest marketing budget in history”), and $363 million on U.S. phone ads alone ($12 million more than Apple spent on its phone ads). Yet when it comes to branding, Samsung’s ads are anything but effective.

It takes all 3 B’s to measure effectiveness…

I teach my students to evaluate marketing based on 3 B’s:

  • BRAND: How does a campaign shape a company’s overall reputation and value?
  • BEHAVIOR: How does a campaign motivate desired bottom-line actions?
  • BUZZ: How does a campaign get people to talk about it in a positive way?

Unfortunately, despite what legends like Ogilvy have preached for years with proven results, too many modern marketers emphasize Buzz, even though it’s the least important of the 3 B’s. At the least, Buzz measures advertising reach, which can help shape Brand and Behavior. Ace Metrix surveyed consumer sentiment only, not real-world popularity.

In sum, Ace Metrix measured a little short-term Brand impact, one aspect of Buzz, and no Behavior whatsoever. They neglected critical factors like reach, recall, and that dreaded word, sales. This study of what’s effective in advertising was defective from the start.

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Freddy is the Founder & Creative Strategist of Atomic Tango. He also teaches graduate-level marketing communication courses at the University of Southern California (go Trojans!), shoots pool somewhat adequately, and herds cats. Freddy received his BA from Harvard and his MBA from USC.

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