The argument against growth
I’m beginning to think we’ve reached a point where advertising as it is currently practiced has become an exercise in futility—not unlike some aspects of the current credit crisis and the bailouts. Is there an apt metaphor in the unraveling credit markets to describe what’s happening in advertising? Let’s see.
Herman Daly, an economist and professor at the School of Public Policy of University of Maryland, College Park and former Senior Economist in the Environment Department of the World Bank describes part of the reason for the credit crisis as a disconnect between financial assets and real assets.
“Financial assets have grown by a large multiple of the real economy—paper exchanging for paper is now 20 times greater than exchanges of paper for real commodities. It should be no surprise that the relative value of the vastly more abundant financial assets has fallen in terms of real assets. Real wealth is concrete; financial assets are abstractions.”
This isn’t to say financial assets or tools are bad. But perhaps too many of them can be. And the underlying culprit—the driving force behind too many abstract financial assets (credit default swaps, anyone?)—is growth. As in “more.” As in, “make the logo bigger.”
Has growth become an enemy of effective advertising?
In a different presentation titled Towards A Steady-State Economy, professor Daly argues, ”Growth is more of the same stuff; development is the same amount of better stuff (or at least different stuff).” Put more vividly, ”Growth means pushing more of the same food through an ever larger digestive tract; development means eating better food and digesting it more thoroughly,” said Daly.
We have reached a saturation point here in the U.S. where more messaging growth doesn’t mean anything more than more advertising. I sense the budget-holders might agree. Noreen O’Leary’s recent piece in Adweek, “Ad Industry Preps for Pain in ‘09,” notes, “Even the quadrennial stimulus of the Olympics and presidential election couldn’t boost spending this year in the world’s largest ad market.”
What’s needed are fewer ads, and greater “development,” which I define as relationships, community and consumer empowerment. As Daly points out, “If economists really believe that the consumer is sovereign then she should be obeyed rather than manipulated, cajoled, badgered, and lied to.” (Anyone hear echoes of Howard Gossage and David Ogilvy?) In other words, let’s cut the growth of blunt messaging and focus (i.e. limit) our persuasive efforts towards developing more robust conversations with our audiences.
Do we have a choice? O’Leary writes, ”The unpredictability of the year ahead could bring the kind of challenges that have never been experienced by the current generation of executives running marketing communications companies.” In other words, seriously fundamental change is afoot. The same tactics, the same strategy focused on growth, simply isn’t going to cut it anymore.
Comments
Great post!
I interviewed Joseph Jaffe once when I was working at Marketing Magazineand he said “The more you advertise the more you are admitting your advertising isn’t working.” I found that a pretty profound statement.
Another one (forget who I heard this from originally) is that advertising is the price you pay for a lack of innovation.
Posted on January 8th, 2009 at 10:29 pm
[...] that what we want? The question is quite interesting, as a post on Hello Viking indicates. Speaking about this difference from a viewpoint of financial services, the underlying [...]
Posted on January 9th, 2009 at 1:12 am
[...] @conversationage (Valeria Maltoni), Hello Viking’s Tim Brunelle argues against growth: I’m beginning to think we’ve reached a point where advertising as it is currently practiced [...]
Posted on January 9th, 2009 at 11:59 am
To my mind you’ve made a solid comparison. More is not necessarily better. It can be but does not have to be for both financial markets and advertising.
So, the boat we’ve been on is sinking. What next?
Posted on January 9th, 2009 at 12:52 pm
Awesome. Thanks, Scott, Mads, Olivier and Joseph for the insights and thanks for carrying this idea further.
On the one hand, I guess I’m arguing for Quality over Quantity. Pretty simplistic. On the other—to Joseph’s query—I’m suggesting marketers are better off investing in the relationships they already have, versus trying to gather even more. This isn’t to say acquisition shouldn’t happen, it should. But not at the expense of more strongly developing those relationships which already exist.
Maybe that’s what Jaffe was hinting at. If your advertising *was* working, your relationships would be strong, hence you wouldn’t need as much acquisition-based messaging. Or, as Scott’s second quote suggests, a lack of innovation in maintaining and nurturing customer relationships forces a marketer to spend (recklessly?) in acquisition messaging.
I’m enjoying this conversation.
Posted on January 10th, 2009 at 2:18 pm
Great post, Tim. We are often attracted to the top line rather than the margin — ie new customers over maximising current relationships. Again it depends on focus … and if we really looked closely, we may find that 80% of our customers contribute 20% of the profit. By following the money trail we should be able to make our customer experience/engagement efforts deliver value to those who are most valuable to us!
Posted on January 12th, 2009 at 7:19 pm
Agreed in full force. As human entities, the more we eat the more we hunger. The same applies in the business and advertising community. 2009 calls for a bit of calorie counting all around. Nice post.
Posted on January 24th, 2009 at 6:27 pm
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