This Week in Strategy: My wife couldn't stand the fact that I have no sense of direction. So I packed up my stuff and right
Hi Strat Pack,
What a week! As I'm sure you know, this week was the Met Gala. And because this is an advertising newsletter, to me, the most interesting part was who gained and lost the most instagram followers because of their Red Carpet outfit. Spoiler Alert: The guy who got carried in like Cleopatra won the Gala.
I heard on the news last night that Uber will IPO at $45 this morning. Are you going to buy? I'm not. Not at that price.
Last but not least, if there's one thing, and only one thing you read this week. Please let it be Gothamist's Awesomely Bonkers 1980s Italian Movie Imagines 'The Fall Of New York' In 2019. Here's the logline for the film: "After a nuclear war, society breaks down into two groups, the evil Euraks and the rebel Federation. A mercenary named Parsifal is hired by the Federation to infiltrate New York City, which is controlled by the Euraks, to rescue the only fertile woman left on Earth." There's 100% a trailer in the link.
Alright, stop messing around on IMDB trying to figure out if these actors were ever in anything you've seen (they weren't) and let's jump right in.
The one thing to read this week
1) The Illusion of Loyalty (Or why I shop at Sainsburys) [Samuel Brealey]
We naive Marketing men and women think humans follow incredibly complex patterns of behaviour to come to a decision. Humans don’t do that. We want simplicity, in fact we yearn for it.
Most customers are not interested in loyalty. In fact, I would argue they rarely think of it as a concept at all. Loyal perhaps to their jobs, careers and family but little else, in reality.
Think for a minute as a regular person. Think deeply about your customer journey and your own loyalty I’m sure the answers will be remarkably simple, selfish and maybe even down to lack of thought, ie habitual behaviour.
A better word, is convenience. A word that I believe encompasses all the fundamentals of Marketing. Product, price, place and promotion.
That is why I shop at Sainsburys, it is around the corner from my house and is open almost 24/7. The milk is always well stocked and a pint isn’t too badly priced either, could be cheaper and if there was a local option that was then I would take it. The milk will last a few days and that makes me content because I can eat cereal in the morning and have copious cups of tea after work.
When the milk runs dry, I know where to turn. To my knight in shining armour, who is just around the corner. Sainsburys.
2) How ethical is it for advertisers to target your mood? [The Guardian]
This is one story in three parts. Please stick with me here.
Part 1: Video Viewers respond to ads depending on their mindset [Interactive Advertising Board]
People watch video on different screens with multiple motivations and this affects how responsive they are to ads. [Ed Note: Shocker.]
For example, 40% of consumers who watch videos for educational or instructional reasons say they pay more attention to ads while in this mindset. Consumers are also “highly attentive” to video ads as they get prepared for the day, the IAB said.
Part 2: ESPN is selling ads based on sports fans’ wildly changing emotions [Quartz]
ESPN has the ability to serve you different ads depending on whether your team is winning or losing.
Part 3: The interesting part [The Guardian]
The implications of targeting based on mood and attitude remain troublingly creepy. The New York Times would never allow the exploitation of mental health fragility on its pages, but there are plenty of unethical companies that would. So why are media companies such as the NYT and ESPN pursuing it, and why would advertisers buy it?
Psychographic targeting doesn’t have a great public image. Cambridge Analytica used psychographic segmentation.
The exploitation of psychographics is not limited to responsible and transparent scientists. While publishers were showing these shiny new tools to advertisers, Amazon was advertising for a managing editor for its surveillance doorbell, Ring, which contacts your device when someone is at your door.
The doorbell-cum-scarecrow editor at Amazon is selling a product, and that product succeeds when people are fearful. How ethical is it to target people based on that? Click here to buy.
3) There is no "ROI vs Brand Dilemma" when you know your profit horizon [Doug Garnett]
An article from 2012 that is just as relevant as ever.
The outright lack of business skills in the agency business has led us to the endless (and frankly silly) discussion about deciding between “ROI” and “brand”.
ALL advertising must return an ROI. Brand is meaningless if it doesn’t generate profit. I don’t care when you need it, at some point brand MUST return an ROI or you shouldn’t be building a brand.
“Profit Horizon” A More Useful Construct
As agencies, we need to plan our every activity with a clear understanding of what I’ll call our client’s “profit horizon”. In other words, if they spend $X today, when and how must profit from revenues driven by that spending cover the cost of the advertising and how much additional profit must result?
Agencies need to learn how to plan and speak in business terms. And, they should modify their operations in two ways:
Add “Profit Horizon” to Creative Briefs. It’s not always easy to describe or calculate. But it must begin to live in the mind-space of your creative and account teams. And that means adding it to the brief.
Start Hiring Trained and/or Experienced Business People. Your agency will never succeed at viewing Profit Horizons unless you can engage a healthy discussion about business, with businessmen and women. And that requires being able to read a P&L while talking in terms that the business understands.
Fortunately, when your advertising returns better business results, your agency business should grow. And that helps us all.
4) Backlash is real — and it’s more common than you’d think [The Civis Journal]
While we frequently hear about the big “what were they thinking?” screw-ups, it’s actually very common for a brand to spend money on an ad that causes “backlash,” one that not only won’t work, but will actually reduce purchase intent and/or harm brand perception.
In aggregating all of the creative tests that Civis ran in 2018, we found that not only were 75% of the ads we tested proven to be statistically ineffective, but more than 10% cause backlash. Considering the amount of money spent on advertising each year, that’s a big problem.
What can we do? Acknowledge that most creative pre-testing is horribly flawed. There needs to be a better balance between post-launch optimization and pre-launch analytics. Marketers must apply scientific rigor to their testing of ad creative before it’s ever released to the public.\
A few other interesting things:
Our research shows nearly no relationship between what people “like” and what actually changes their mind. I’ll save this one for another time because there’s a lot to unpack.
The difference in performance between the best ad and the worst ad in a given test was not trivial. The best ad was, on average, 13 percent better than the worst ad, and the top 10 percent of ads were 25 percent better than the worst ads.
5) Quick Hits: A few articles that are concise, important, interesting, impactful, and I'm not going to write long descriptions for them.
Before we get into the quick hits, I want to discuss this article with you: Kia Challenges a Toxic Gaming Community with a Sweet Old Granny [Little Black Book] TL;DR Kia hired an adorable old granny to stream League of Legends on Twitch, and her presence made the community nicer overall. Just try to insult a friendly old lady.
It's a cute story. It's executed well. It resonated with the target market. It has a good sub-two-minute case study video. But I'm banging my head against the wall trying to figure out how this ties back to Kia. Why did they do it? How do they get any attribution? How does the word drive salience for Kia?
I can't figure it out. Would love to hear your thoughts!
Back to our regularly scheduled programming...
Alice Rawsthorn gives us the low-down on the seven pillars of bad design [It's Nice That] Please read this. It's brilliant. Alice says, “I’ve always found it odd that design is typically discussed in terms of good design when, in reality, most design projects are deeply mediocre and many are downright bad. Also, bad design has just as much, if not more of an impact on our lives than the good variety, and repairing the damage it causes can be incredibly costly in terms of money, time, energy, reputation, and other resources.”
Stop Focusing on Trying to Go Viral and Instead Take a Stand [AdWeek] Brands who taken the time to sit down and distill their core story are the ones who will be most successful. Something that seems so basic that is often overlooked entirely: They don’t know what they stand for.
Brands' cause marketing efforts fail to break through with Gen Z, report says [Marketing Dive] Contrast this with the previous article. Only 12% have a "top of mind" association between brands they know and a social cause. Aided awareness brought association up to 24%. Yes this includes Nike/Kapernick.
‘Things have become so transactional’: Clients are scrutinizing agency billings more than ever [Digiday] Skip past the NRA thing at the beginning. It's irrelevant and brings down an otherwise interesting article about the risks of a messy scope. (And maybe why agencies needs to hire more people who can read P&Ls?)
What should you look for when hiring planners? [CampaignLive] Ostensibly you're a planner and ostensibly you're going to be in the position to hire someone at some point in your career
Chobani CMO says it's not fair to blame CMOs for Brand Woes [AdAge] Once you get past the facepalm headline, it's an interesting take on marketing today, in-housing, and how to react when you hit a bump in the road
6) Department of Great Work
Work! Work! Work! Work! Work! (h/t Rihanna)
Renters insurance gets a sexy makeover with Toggle [CampaignLive] This campaign for Farmers Insurance, from Odysseus Arms, looks nothing like the rest of the category and really heavily leans into the audience truth in a great way.
Veggie Hacks [Ads of the World] Ogilvy Argentina helped Vea Supermarkets how to get kids to eat their veggies in this clever activation. (Spoiler alert: Case study video ahead)
Axe marketing team immediately reacts teenagers upon finding out Iron Man is a fan [PR Week] Not that this is mind-blowing work in itself, but contrast this with the fact that it took Starbucks over 12 hours to come up with a resoundingly middling tweet when their product was accidentally featured on the most talked about show on TV right now.
How Kraft Heinz plans to give moms a break for Mother's Day [MarketingDive] Because mom needs some me time, Kraft will foot the bill for up to $100 in babysitter fees. Nice.
Kellogg's Mini Cereal Boxes [Behance] Just really beautiful spec work.
Nike’s new app uses AR to measure your feet to sell you sneakers that fit [The Verge] Cool. Super cool.
Not to be outdone... Bud Light kicks up live soccer experience with VR activation [Mobile Marketer]
A former Netflix creative director just got $1.6 million from big names in tech for Liquid Death, which is water in a tallboy can [Business Insider] A case study in distinctiveness, not differentiation. It’s designed to get a foothold among straight edge punks and their friends instead of “Whole Foods yoga moms."
Discover your Wings [YouTube] I think that the University of Phoenix is a vile unethical university. But you've got to admit that 180LA does pretty great work for them.
7) Platform Updates
If you haven't read it, check out this scathing take on why to break up Facebook from the NYT Opinion section. Chris Hughes is clearly insanely knowledgeable about the inner workings of the company, but to me it felt like a vendetta against Zuckerberg more than anything else. He proposes spinning off Instagram, Facebook, and WhatsApp into three separate companies. But I don't know how that will help deal with the underlying issues of, say, people spreading untrue news stories on WhatsApp during an election, or Bots manipulating an algorithm. Real problems, but ones that won't be solved by getting rid of one man, or merely separating the back end.
And I had a thought: Facebook wants to integrate their three services (Facebook, WhatsApp, Instagram). We all think it's to consolidate power, but what if it's actually to compete with Apple & iMessage. Alas, I digress.
Facebook updates video ranking to boost original content [MarketingDive] Videos should hold viewer attention for at least 60 seconds, and its ranking will prioritize videos that are at least three minutes long
Siri and Alexa struggle with your questions about detergent and cheese [Fast Company] The digital assistants are terrible at answering “commercial questions” like “How do I open a savings account,” a Forrester Research study found.
Google announces privacy updates as industry stuck in cookie limbo [The Drum] This has a very real potential to shake up the digital advertising ecosystem which is largely built on cookies
Has performance marketing reached a 'tipping point'? [CampaignLive] Contrast with previous article.
Digital Advertising Eclipses $100 Billion For First Time, Per IAB Report [AdExchanger] Boring but important.
Google's Advertising Sales Miss Wall Street Expectations [Billboard]
Phew! That was a marathon, not a sprint. As always, the full archive is available here. Was this email forwarded to you? Want to start getting this on a weekly basis? All I need is your email, everything else is optional.
Thanks for sticking around as always. Have a great weekend!