Amazon Fire Phone

December 16, 2014

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

by Freddy J. 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 reportedly had 7 of the 15 “most effective” ads in the tech hardware sector, including the top 2. Of course, as everyone knows, Samsung is having a terrible year, with third-quarter profits down 60% to three-year lows.

Also on Ace Metrix’s top 15 list was Amazon’s ad for its Fire Phone — a product that’s been selling so poorly, Amazon’s been having a fire sale 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 filled with so much “desire,” they’re staying home and fantasizing instead of actually 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 find out how consumers respond to everyday casual exposure to ads over time. Do they even remember ever seeing those ads? The effectiveness of certain ads changes over repeat exposures. You might not care for an ad the first time you see it — you might be in a bad mood, or just not in the mood for shopping — but if you see it repeatedly, you might finally buy the product, or you could come to hate the ad. According to real scientific research conducted by Professor Byron Sharp and his cohorts at the Ehrenberg-Bass Institute, advertising serves to refresh the memory about a brand. That means ad effectiveness should be measured over time, not in one-shot quick-thought surveys.
  1. Consumers don’t always respond truthfully or accurately to surveys, particularly if they feel put on the spot and want to impress the researcher — or just themselves. That’s why focus groups can’t be trusted, and why the most accurate research is based on actual market results.
  1. The criteria — Persuasion, Likeability, Information, Attention, Change, Relevance, Desire, and Watchability — are abstract, and even professional marketers would disagree on their meanings. After all, how “persuasive” is an ad if the consumer doesn’t actually 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 one core reason both Samsung and Amazon’s Fire Phone are flailing. Apple spends heavily on advertising, and does almost no social media or community outreach, so I’m guessing their ads are actually, 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 powerful long-running agency on the premise that the function of advertising is to sell. A good advertisement is one which sells the product without drawing attention to itself,” he once stated. Ogilvy was hardly the first to express this sentiment — a quick 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 criteria Ace Metrix selected are brand-related (likeability, change, etc.), a stronger measure of brand value is whether customers turn to a brand in a market crowded with comparable products, and 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? This is usually sales, but it could also be other goals, like votes in an election or donations to a charity.
  • BUZZ: How does a campaign get people to talk about it in a positive way? This is the word-of-mouth factor that gets social mediaphiles all hot and bothered, usually measured in terms of viral sharing and “engagement” (which we all know is mostly worthless).

Unfortunately, despite what legends like Ogilvy have discovered and shared 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 does measure reach, which can help shape Brand and Behavior. Ace Metrix only surveyed consumer sentiment, not actual real-world popularity.

In sum, Ace Metrix measured a bit of 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 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.

2 Responses

  1. Freddy, your posts are always a blast of fresh air. Your line “Apparently, consumers are filled with so much “desire” (for Samsung and Amazon products), they’re staying home and fantasizing instead of actually shopping” had me roaring!! A study about ad effectiveness that totally ignores sales– incredible. Thanks for covering this story. At least now we’ll know enough to take future ad effectiveness study results with a grain of salt. Hmm– better make that a shaker of salt!!

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