What's the similarity between Jackson Pollock and advertising?

They both do something anyone could do. Or so the story goes.

Many people have looked upon the work of Jackson Pollock with much disdain. Cries of "I could've done that!" and "My six-year-old could've done that" echo across the gallery. But you didn't and your six-year-old can't. So regardless of what you think, for once, you're not right. And any work done by Pollock will still sell for $30 million, no matter what you think of it.

The reason a Jackson Pollock sells for so much is because that's what someone is prepared to pay for it and they understand its value. Just like everything, from houses to cars to sex, people only pay what they're prepared to pay and what they see as valuable only matters to them. Your perception of value and worth is meaningless to the purchaser.

When it comes to things like creativity, such as art and advertising, which are traditionally hard to measure and quantify, the lines pointing to value and worth become almost invisible. What difference is there between a logo designed for $50 and a logo designed for $5,000? If the client is happy to pay $50 or $5,000 then surely it boils down to the Jackson Pollock principle of perceived value? A logo's a logo, right? And a watch is just a watch? Yes, but people don't buy watches to tell the time. A $50 watch is just as accurate at telling the time as a $25,000 watch, so why do people buy them?

It's the same with advertising. There's advertising that's cheap and there's advertising that isn't. I'm not saying that the expensive stuff is superior because it often isn't. Harvey Norman spent over $60 million advertising in 2011 and their work isn't good. From a creative point of view, it's really awful.

The reality of the situation is that advertising agencies have been making money the wrong way. Advertising agencies were born from the fact that businesses needed an intermediary between the media and themselves, to negotiate the best rates and spots. For a long time, it wasn’t the creative work that was making agencies money, it was the fat, juicy commissions that they were getting from booking media and from hiking up print and production costs. Eventually, when creativity became a factor in choosing one agency over another, it was almost impossible to put a definitive cost to it. This is most likely where the idea of advertising awards came from.

If Agency X had more awards than Agency Y, then it stands to reason that Agency X are worth more. But that’s not entirely right. The vast majority of advertising awards are developed, curated and judged by the people within the industry itself. In the same manner that the aloof, fine-art cognoscenti look down their noses at the common folk, so do the advertising Illuminati. For too long they’ve been trying to justify what they do and the high costs involved but they shouldn’t have had to.

An accountant or a lawyer (even a plumber) knows exactly what they do. And most importantly, so does Joe Public. So they know the value of choosing a good lawyer over a bad one. Isn’t it time that advertising agencies reevaluated their business? We’ll take a look at how this could happen in a future blog.

Are advertising agencies innovators?

They should be but more often they aren't. It doesn't matter what their size, all too often advertising agencies fall into the money trap: they produce work that's only good enough to move the money from their client's bank account into their own. Work that's just there to please the client and not consumers.

A recent case in point is the newest BNZ advertising campaign, which was produced by Colenso BBDO New Zealand. It's 90 seconds of big wank and you can see it here. A pointless, futile exercise in trying to get consumers to move to BNZ. The claim is that money is neither good nor bad, but what you do with it that counts. Very deep. And vomit-inducing. 

So after discussing this with friends in both the advertising agency and banking world, I was told that I needed to wait and see what BNZ planned to unveil and that this was just the start.

So I waited. And I can confirm it's more than a big wank. It's pointless beyond belief. The big idea behind this big ad is that BNZ offers three innovative things for you to do with your money: 

1. Get the same thing every other bank offers in the form of a way to save money on your mortgage

2. Get the same thing that every supermarket offers in the form of Fly Buys

3. Get the same thing every other bank offers in the form of email and text alerts

Whoop De Do! What's next? Fuel discount coupons?

Where's the big idea? Where's anything to convince consumers that BNZ is the bank for them?

It doesn't exist and no matter how many times you watch the ad nothing will make you think otherwise. All BNZ have to differentiate them is their colour. And BBDO knows this but simply decided to hide their client's lack of ideas and differentiation behind a huge 90-second ad campaign. Which in itself is crazy (but brilliant work from the agency - reminds me of the tale of King Midas). Once you've seen this gargantuan presentation of theirs it's all over. You know the story, you know what's going to happen and if the agency thinks otherwise they need their heads examined. Who reads War and Peace or Moby Dick a second time in the hope that the ending will be different? Who sits through adverts these days without jumping for the remote the second they start? Who watches 90-second ads?

But that's the money trap at work. Well done to all those advertising agencies that have perfected it.

David Ogilvy knew all about permission.

David Ogilvy was an advertising legend. He understood that to be truly effective at what he did, he first needed permission from his audience before he could make a sale. He learnt this from his days as a door-to-door salesman, selling AGA cooking stoves in Scotland during the early 1930s. Quite simply, if he didn’t get permission to sell to his audience within seconds of them opening their doors, he would never sell them anything. He understood perfectly that he had the privilege, not the right, to sell to them, and that they held all the power.

Imagine if Ogilvy had arrived at those doors anything less than the perfect salesman. What would have happened if he had spoken to his prospects, in the same way, today’s retail advertisers, like Harvey Norman, Bond and Bond, Briscoes and Rebel Sports, speak to theirs? What would have happened if Ogilvy had shouted his way into homes and invaded people’s privacy without their permission?

Besides not making a sale, I’m sure he would have been on the receiving end of many beatings. And the last thing any salesman or advertiser wants is to take a beating. So why then do retail advertisers have this fascination with screaming at everybody? Is it just because that's the way everyone else does it? Or are they just not brave enough to try something else?

Grudge Purchases – Value, Discount, and Experience

It’s hard to get consumers fired up about products that are grudge purchases. There may well be a momentary flash of enthusiasm around buying a gym membership or an exercise machine but that vanishes once the cold reality of the situation sets in.

Things like power and water, insurance, petrol, tyres, bus tickets and the like generate no enthusiasm whatsoever, which means they generate zero brand loyalty and the cheapest option on the day will usually be the one chosen. There are websites specifically designed to tell consumers which power company will give them the best rates, and any real cost reduction is enough to promote a switch because electricity is electricity. Petrol also happens to be petrol, no matter who sells it, and the price is the driver, not the brand.

A tyre company may well be the choice of the Formula One world champion, or might even supply the only tyre in the entire field but only fans of the sport will notice or care, the rest will phone around and put on the cheapest tyre in the specific product segment they need for their car. A twenty-five-year-old runabout may well get off-brand Chinese rubber but the driver of a five-year-old Audi will likely be happy with whatever he gets from the name brands, after all, can anyone really pick the differences between a Bridgestone, Pirelli, Dunlop or Yokohama tyre at similar price points?

This buyer apathy makes it tough to market grudge purchases or to get them to stand out from the competition in any meaningful way but it can be done. Discounting isn’t really the answer because having the lowest price is only a matter of willpower – if a competitor is willing to haemorrhage more margin than you are, well then you’ll be hard-pressed to sustain a price war. Adding value is one key concept, improving the shopper experience is another, and if these approaches work in the grudge world, they’ll work in the ‘normal’ world too. 

Take five tyre brands, each with family car offerings at a similar price point. The tyres are all much of a muchness and they’re priced within $20 of each other. However one offers a warranty that replaces the tyre in the event of damage – hitting a pothole, smacking the pavement, or a rogue bit of metal on the motorway are all covered. I know which one I’m grabbing, even if it is at the higher end of that narrow price band because I’m buying peace of mind that might just make future dealings with this grudge purchase less onerous. Yes, I'm getting a free grudge (insurance) with my grudge (tyres) but it's better than the poke in the eye with a sharp stick that I'm getting from the rest of the usual suspects.

Consider five car insurance policies. Anyone who’s called around to get quotes on car insurance knows that the rates are often pretty darn close to each other and the call centre experience is exactly the same regardless of which company you call. However, let’s say one insurer offers free roadside rescue to policyholders. That’s compelling. Or a ten percent cash-back offer at the end of the year if you don’t make a claim – not as compelling perhaps, but still a step up from the three-eighths of nothing you get from the others. 

There are problems with value-added solutions though – first, they cost money, which has to come from somewhere and second, they’re easily copied by the competition. As soon as one insurer offers a cash-back scheme, the rest follow with a similar deal. Offer a free 20-liter chilly bin with your product or service and your opposition might well up the ante with a 36-litre model. This is where improving the customer’s experience makes more sense. 

For example, an insurer who guarantees to answer all inbound calls about claims in under three rings would stand out more than either of the two previous examples because they’re promising to reduce the pain their customers feel when dealing with the stress of a claim. No more “your call matters to us so please continue to hold while we show you how little it actually matters to us” on-hold marathons. That would definitely work for me and even though this option would be pricey and hard to implement, it would be both effective and tough for the competition to replicate in a hurry.

How about a tyre store that offers a premium service with a classy lounge, tasty coffee, piles of good magazines and even a plate of fresh pastries? That would attract a snobby Audi or Volvo driver’s attention in the same way that friends of mine won’t shop at “Pak and Scrap” because it’s just not as good an experience for them compared to their nearby local flash New World. Again, this type of premium service wouldn’t come cheap but it would be perfect for a select market, especially if the high-end tyres they were after cost the same as they do at the opposition down the road.

I find buying casual clothes to be something of a grudge purchase – it’s tough to find stuff that fits well and I’m not a brand junky at all. So why do I shop for casual gear at Farmers? It’s not because of the wide range of products, or the sale prices (although the latter surely has a lot to do with it). It’s because Farmers behaves more like an American company than any other in NZ when it comes to returns. Swapping items, exchanging gifts or getting credit notes is as easy as pie and this enhanced part of the customer experience makes me inclined to keep shopping there because it reduces my potential stress (again, I’m buying peace of mind).

Take any product that doesn’t genuinely have the marketing built into it. Picture it as a grudge purchase and imagine that you have to sell it to people who don’t want to buy it. Then find ways to sell it that don’t rely on the lowest price or the biggest advertising budget – ramp up the value in an innovative way or even better, improve the customer experience and you’ll sell more than the competition who’re just doing the same things they always did. 

That’s bloody obvious I hear you say, surely everyone in marketing looks beyond the basics? Well no, because this approach relies on an awareness of the big picture starting from the time the product and packaging are designed, and running right through to the way the consumer buys and uses the product. Many agencies can’t see the wood for the trees in this regard.

In the next post in this series, I’ll go back to the gym example and look at how that game has changed over the years, and what we as marketers can learn from it.