Rick brandcenter talk 2013
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Rick brandcenter talk 2013 Rick brandcenter talk 2013 Presentation Transcript

  • WHICH HALF IS WASTED? N.B. (Almost) All images come from 2
  • HI I’M RICK. 3
  • I USED TO WORK HERE. 4
  • THEN I DID SOME INVESTING. 5
  • NOW I WORK HERE. 6
  • I’VE BEENWORKING ON ABOOK CALLEDWHICH HALF ISWASTED. 7
  • LET’S TALK ABOUT ECONOMICSWithout talking about Ron Paul or Schumpeter. And even really not much Keynes. 8
  • COLLEGE. 9
  • 10
  • Robert AdamMalthus Smith 11
  • HOMO ECONOMICUS 12
  • “[POLITICAL ECONOMY]...IS CONCERNED WITH [MAN] SOLELY AS A BEING WHO DESIRES TO POSSESS WEALTH, AND WHO IS CAPABLE OF JUDGING THE COMPARATIVE EFFICACY OF MEANS FOR John Stuart OBTAINING THAT END.” MillMill, John Stuart. "On the Definition of Political Economy, and on the Method of Investigation Proper to It," London and Westminster Review, October 1836. 13Essays on Some Unsettled Questions of Political Economy, 2nd ed. London: Longmans, Green, Reader & Dyer, 1874.
  • ONE PROBLEM:HOMO ECONOMICUSDOES NOT EXIST. 14
  • 15
  • Alfred JohnMarshall Maynard Keynes 16
  • AN EXTERNALITY IS A COST OR BENEFIT THAT IS NOT TRANSMITTED THROUGH PRICES.Arthur Cecil Pigou 17
  • EXTERNALITIES CAN BE POSITIVEOR NEGATIVE.
  • ADVERTISING IS ANEXTERNALITY. BUTPOSITIVE ORNEGATIVE? 19
  • A PENDULUM HAS SWUNGTHROUGHOUT THE HISTORY OFADVERTISING 20
  • "HALF THE MONEY ISPEND ONADVERTISING ISWASTED; THETROUBLE IS I DONTKNOW WHICH HALF." – JOHN WANAMAKER, CIRCA 1920 21
  • RATIONAL EMOTIONAL 22
  • - DIRECT MARKETING - BRAND MARKETING- “SCIENCE-BASED” - CREATIVE ADVERTISING ADVERTISING- “SELLING COSTS” - TRADEMARKS 23
  • THEORY #1:INFORMATION 24
  • 25
  • THIS IS NOTFOR LACK OF INFORMATION 26
  • THEORY #2:SIGNALLING 27
  • A POSITIVE ASSOCIATION BETWEEN ADVERTISING AND QUALITY. ADVERTISING THUSMAY SIGNAL QUALITY, REGARDLESS OFWHAT THE AD SAYS. 28
  • NOTHING KILLS A BADPRODUCT FASTERTHAN GOOD We see this in tech tooADVERTISING. find that quote – BILL BERNBACH 29
  • THEORY #3:BRANDS. 30
  • Joan EdwardRobinson Hastings Chamberlain 31
  • THE MOTHER AND FATHER OF ADVERTISING ECONOMICS. 32
  • IN 1933 CHAMBERLIN BROKE DOWN ADVERTISING’S ECONOMIC ROLE INTO TWO PARTS: THAT OF THE TRADEMARK, OR BRAND, AND THAT OF “SELLING COSTS,” OR THE SPREADING OF INFORMATION AND THE REPETITION OF THAT INFORMATION, AKA DIRECT. 33Theory of Monopolistic Competition. A worthy read.
  • David BillOgilvy Bernbach 34
  • David BillOgilvy Bernbach 35
  • “I DO NOT REGARDADVERTISING AS “I WARN YOUENTERTAINMENT OR AGAINST BELIEVINGAN ART FORM, BUT THAT ADVERTISINGAS A MEDIUM OF IS A SCIENCE.” quote from confessions about headline sizeINFORMATION.” — BILL BERNBACH—DAVID OGILVY 36
  • David BillOgilvy Bernbach 37
  • Howard Alex Draft Bogusky 38
  • 39
  • BRAND + DIRECT = 40
  • 360 DEGREES.
  • THE NAYSAYERS
  • “THE QUASI-PEACEABLE GENTLEMAN OF LEISURE, THEN, NOT ONLY CONSUMES OF THE STAFF OF LIFE BEYOND THE MINIMUM REQUIRED FOR SUBSISTENCE AND PHYSICAL EFFICIENCY, BUT HIS CONSUMPTION ALSO UNDERGOES A SPECIALISATION AS REGARDS THE QUALITY OF THE GOODS CONSUMED. HE CONSUMES FREELY AND OF THE BEST, IN FOOD, DRINK, NARCOTICS, SHELTER, SERVICES, ORNAMENTS, APPAREL,Thorstein WEAPONS AND ACCOUTREMENTS, Veblen AMUSEMENTS, AMULETS, AND IDOLS OR DIVINITIES.” – THEORY OF THE LEISURE CLASS 43
  • "THE MELANCHOLYDISCIPLES OFTHORSTEIN VEBLENWOULD HAVE DESPISEDTHIS SHIRT." 44
  • “HARMONY THEREFORE, BETWEEN CONSUMER PREFERENCES AND THE PATTERN OF PRODUCTION MAY SIMPLY INDICATE THE ADAPTATION OF MANS TASTES TO THE RIGID REQUIREMENTS OF THE PRODUCTIVE SYSTEM, AND THAT WOULD HARDLY BE A CAUSE FOR SELF-CONGRATULATION.” Tibor – THE JOYLESS ECONOMYScitovsky 45
  • ADVERTISING HAS USCHASING CARS ANDCHOTHES, WORKINGJOBS WE HATE SO WECAN BUY SHIT WEDON’T NEED.
  • “WHEN ANY SPACE IS BOUGHT, EVEN IF ONLY TEMPORARILY, IT CHANGES TO FIT ITS SPONSORS. AND THE MORE PREVIOUSLY PUBLIC SPACES ARE SOLD TO CORPORATIONS OR BRANDED BY THEM, THE MORE WE AS CITIZENS ARE FORCED TO PLAY BY CORPORATE RULES TO ACCESS OUR OWN CULTURE.”Naomi – NO LOGO Klein 47
  • “THE PROTECTION GIVEN BY CLOTHES IS EXCLUSIVE TO THOSE WHO USE THEM. BUT WHEN PEOPLE ARE NOT SATISFIED WITH A MERE COVERING AND PROVIDE THEMSELVES WITH FINE CLOTHING PLEASING TO THE EYE, THE ENJOYMENT IS SHARED BY ALL WHO MEET HIM.” – THE NEED FOR FAITHSir RalphHawtrey 49
  • “MARKETERS EXPLOIT THE FOCUSING ILLUSION. WHEN PEOPLE ARE INDUCED TO BELIEVE THAT THEY “MUST HAVE” A GOOD, THEY GREATLY EXAGGERATE THE DIFFERENCE THAT THE GOOD WILL MAKE TO THE QUALITY OF THEIR LIFE.” – THINKING FAST AND SLOW DanielKahneman 50
  • WE ALL HAVE TO COME TO TERMS WITH THESE. 51
  • THE GOOD NEWS 52
  • “ADVERTISING, LIKE DEMOCRACY, IS TERRIBLE IN PRINCIPLE BUT BETTER THAN ANY KNOWN ALTERNATIVE IN PRACTICE.” RichardSchmalensee 53
  • THE RETURN FROM ADVERTISING AND THEREBY ACHIEVING AN INITIAL SALE MAY BE GREATER FOR A HIGH- QUALITY PRODUCT, DUE TO THE GREATER REPEAT PURCHASES THAT COME FROM SATISFIED CUSTOMERSPhillip J.Nelson 54
  • “EVEN THE CENTRAL PLANNERS IN THE OLD SOVIET UNION HAD TO ESTABLISH ‘PRODUCTION MARKS’ TO STOP MANUFACTURERS CUTTING CORNERS ON QUALITY.” 55http://www.economist.com/node/770992?story_id=770992
  • ACCORDINGLY, EVEN NON-PRICE ADVERTISING CAN LOWER PRICES, AND THIS ASSOCIATION APPEARS TO DERIVE IN PART FROM THE ENTRY OF LARGE-SCALE FIRMS INTO MARKETS THAT ALLOW NON-PRICE ADVERTISINGLee Benham 56
  • “THE NEWSPAPER INDUSTRY PROVIDES ANOTHER EXAMPLE OF SUBSIDISED COMMODITIES, BELONGING TO THIS CLASS; HERE THE SERVICE PROVIDED TO THE PUBLIC IS SUBSIDISED (THE PAPERS ARE SOLD TO THE PUBLIC BELOW COST), IN ORDER TO ENHANCE THE DEMAND FOR ADVERTISING SPACE, BY THE ADVERTISERS.” Nicholas Kaldor 57Kaldor, N. 1950. The economic aspects of advertising. Review of Economic Studies 18, 1–27.
  • UH OH. 58
  • BUT WHAT ABOUT THE INTERNET? 59
  • 60
  • IN 2011, WEB 2.0 VISIONARY TIM OREILLY BLITHELY COMMENTED THAT GOOGLE "SOLVED THE PROBLEM POSED BY JOHN WANAMAKER A CENTURY AGO" 61https://plus.google.com/107033731246200681024/posts/2NU9pZEZ5t1
  • ADVERTISING IN THE US $114 Billion Total Ad Spend, web is 30% and growing 70 53 35 18 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 US Online Ad Spend, in Billions Projected 62Source: Kantar Media, IAB, E-Marketer
  • BUT THAT MONEY IS COMING FROM PRINT, NOT TV 40 30 20 10 0 2006 2007 2008 2009 2010 2011 Online Ad Spend Percentage Print Ad Percentage 63Source: Business Insider, via Company filings
  • ANOTHER WAY OF LOOKING AT IT IS TO SAY THAT ONLINE AD MONEY IS COMING FROM DIRECT AND NOT BRAND. 64
  • THISDOESN’TSEEMSURPRISING 65
  • TELEVISION ADVERTISING IS ACTUALLY GROWING (I MEAN, NOT A LOT, BUT EVERYONE THINKS IT’S SHRINKING. BUT IT ISN’T.) 42 41 40 2006 2007 2008 2009 2010 2011 US Television Ad Spend as a percentage of total 66Source: Business Insider, via Company filings
  • AND THIS, EVEN THOUGH THEIR AUDIENCE IS SHRINKING. 4 2 0 -2 -4 -6 -8 May ‘11 June ‘11 July ‘11 Sep ‘11 Oct ‘11 Nov ‘11 Dec ‘11 Jan ‘12 Feb ‘12 March ‘12 Change in Live + Same Day Ratings; Persons 2+; Total Day (percent) 67Source: Business Insider, via Company filings
  • SO $48 BILLION IS STILLBEING SPENT ON TV EVENTHOUGH THE AUDIENCE ISSHRINKING. 68
  • WTF? 69
  • THE INTERNET HASCAPTURED DIRECTAD MONEY FROMPRINT, BUT IT IS STILLREALLY BAD ATBRAND MARKETING 70
  • “THE WEB HAS MEGA-OPTIMIZED THE SMALLESTCHUNK OF ADVERTISING,WHICH IS DIRECTRESPONSE... IT’S NOTINTENDED TO MAKE YOUFEEL SOMETHING FOR THEBRAND.” DAVID KARP, TUMBLR CEO, JULY 2012 71
  • 81% OF ALL ONLINE AD DOLLARS ARE SPENT ON SEARCH OR BANNERS.http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-101112 72
  • THIS IS EVEN MORE DEPRESSING - THE CONCEPT OF BRAND LIFT AS A PRICING MODEL IS NON-EXISTENT.http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-101112 73
  • 74
  • WEB ADS ARE NO LONGERALIGNED WITH OUR MEDIA 75
  • SOCIAL IS ERODING THEABILITY FOR A BRAND TOCONTROL THE NARRATIVE. 76
  • SOME BRANDS DO ITWELL, BUT THEY ARETHE EXCEPTION, NOTTHE RULE. 77
  • ?AdWords 78
  • AdWords The First Banner 79
  • THIS HAS BEEN MY JAM SINCE I GOT STARTED INADVERTISING. 80
  • AdWords Viral Marketing 81
  • AdWords YouTube 82
  • AdWords Buzzfeed 83
  • Brand TimelinePages 84
  • Old Twitter New Profile Pages Pages 85
  • 86
  • THIS IS NOTACADEMIC. 87
  • “STUDIES... INDICATE THAT COMPANIES WITHSTRONG BRANDS OUTPERFORM THE MARKETIN RESPECT OF SEVERAL INDICES. IT HASALSO BEEN SHOWN THAT A PORTFOLIOWEIGHTED BY THE BRAND VALUES OF THE BESTGLOBAL BRANDS PERFORMS SIGNIFICANTLYBETTER THAN MORGAN STANLEY’S GLOBALMSCI INDEX AND THE AMERICAN-FOCUSED S&P500 INDEX.” 88BrandChannel
  • “ADVERTISINGREALLYTURNS OURSTOMACHS.” DAVID KARP, TUMBLR CEO, JUNE 2010 89
  • “CAN YOU REMEMBERTHE LAST TWITTER ADYOU’VE SEEN, THELAST FACEBOOK AD?” DAVID KARP, TUMBLR CEO 90
  • YOU’VE ALREADY SEENOUR AD UNIT. IT’S THETUMBLR POST. DAVID KARP, TUMBLR CEO 91
  • Google TumblrSearch Search 92
  • 93
  • 94
  • 95
  • adidasfootball 96
  • 40,620 Notesadidasfootball
  • adidasfootball 98
  • Hipster Runoff SOUP 100
  • “ADVERTISINGSHOULD NOT BEABOLISHED, BUTIT MUST BEREFORMED.” 101
  • ADVERTISING IS THE EDGE OF WHAT PEOPLE KNOW HOW TO DO AND OF HUMAN EXPERIENCE AND IT EXPLAINS THE LATEST WAYS PROGRESS HAS CHANGED US TO OURSELVES. FOR ME, THAT DEFINITION OF ADVERTISING IS REALLY INTERESTING AND IS PROFOUNDLY DIFFERENT FROM THE LATEST SILICON VALLEY DEFINITION OF ADVERTISING – WHERE YOU HAVE PEOPLE PAY FOR WHO THEY CAN BEJaron Lanier CONNECTED TO.... 102
  • Apologies and thanks to the source: Luma Partners. Hate the game, not the player.
  • SERIOUSLY.SCREWTHIS.Apologies and thanks to the source: Luma Partners. Hate the game, not the player.
  • THE DEFININGADVERTISING ISSUES OFOUR TIME: 105
  • SOCIAL:BRINGBRANDS TOTHE PEOPLE.
  • 107
  • BRAND:BRING BRANDTO THE WEB. 108
  • SOCIETAL:BRING BACKTHE NEWS. 109
  • 110