Time for your weekly BrandBuilder reality check.
There are only two types of businesses: The ones you know are the best in their category, and… everyone else.
Advertising and marketing are nice, but too many “also in” businesses waste money on marketing and advertising when they should instead revamp one or two elements of their business that would help them actually gain market share. (The most pleasant and efficient customer service experience in your industry, a perfectly designed user interface, a 100% uptime guarantee, stunning design, impeccable ergonomics, remarkable flavor, etc.)
Advertising is basically a load of bulls**t unless you have something worth advertising to begin with. (Otherwise, what are you advertising: Hey, come buy from us! We’re the thirteenth best shoe store in the 29601!) You’re either the best at something, or you’re just another voice in the crowd getting fleeced by just another run-of-the-mill ad agency or “marketing firm.”
Before you start spending money on advertising, ask yourself what your super-special value to your users/customers/clients truly is. Maybe you have the best prices. Maybe you have the most comfortable meeting rooms. Maybe you have the most square footage of any gym in your area, or the freshest produce, or the most knowledgeable staff, or the fastest check-out. It doesn’t matter what that something is as long as it is something concrete (as opposed to another lame marketing spinfest). Is that one thing truly hitting the mark? Are you really delivering on it as well as you could? As well as you should?
Whatever your value differentiator is, whatever your brand’s value advantage is (or should be), this is what you need to invest in FIRST. Once you have that aspect of your business nailed down, THEN and only then should you even bother with advertising.
About a year ago, Seth Godin posted some great advice to college grads on his blog: Only borrow money to pay for things that increase in value. A pair of shoes or cool clothes never increase in value. An education or professional experience, however do. Great advice, especially in the crux of our current economic/credit crunch. The same applies to businesses, which is why Seth’s advice is so damn relevant to the discussion today.
Perhaps more relevant to today’s topic is a slightly tweaked version of Seth’s advice: “only invest in things that increase in value.”
Like shoes and clothes, advertising never increases in value. With advertising, you are at best buying a small percentage of the public’s attention across a very narrow sliver of space and time (and paying a premium price for it.) Before you know it, your advertising budget is gone, and so is that very expensive bubble of attention.
Investing in better products/services, better people and better processes, however, makes a whole lot more sense as these things never lose value. Great employees, great products, great customer experiences and fostering a unique relationship with your fan base are the types of things worth investing in. These are the true foundations of a great brand. These are the types of things that will help strengthen your brand equity.
Advertising rarely translates into brand equity unless these foundations exist to support it. Even so, the more solid the brand’s foundation, the less relevant advertising becomes.
Starbucks doesn’t advertise much and I’m not sure I’ve ever seen a Whole Foods ad anywhere, yet millions of people drop solid stacks of greenbacks there every year. I don’t shop at Target, wear Rudy Project sunglasses, drive a VW or crave a BMW because of advertising. Other than creating awareness for a product that hasn’t managed to capture anyone’s attention yet (red flag), advertising does little to impact most companies’ growth. Do they create spikes in interest, eyeballs and sales? Sure. When executed well. But growth? Over time? Nope. Growth is a completely different animal, and advertising alone, boys and girls, won’t get you there.
Building a strong reputation by developing great products, buzz-worthy experiences and generally delighting customers/users is a much stronger strategy than paying loads of cash for advertising.
Something to think about as you prioritize items on your budget for H2.
Have a great Wednesday, everyone. 🙂
Brand Building and Online Marketing Blog 
Well said Olivier! Too often people try to beat their competition by plowing through them, or worse; going under them (aka bad-mouthing). We all need to take your advice and set our sights so high for ourselves, our products, and what we can DO that brings value to our customers that we sail over our competition instead. Thanks for the post.
Olivier,
Wow. I’m glad you posted this.
I really see it as a nice continuation from yesterday’s post and right in line with what I was thinking, but didn’t get around to leaving a comment on.
When your marketing and the media you use to communicate with, looks just like your competitors, you probably haven’t invested enough in the fundamentals that truly define a brand, like product, experience, customer service, etc.. Once you have put resources into the things that define and differentiate your brand (and increase in value), then where and how you do your marketing should be easy.
A great example, is Zappos. Their defining differentiator is customer service, and they have invested large amounts of money and resources to providing their customers exceptional customer service. They’ve even restructured how their warehouse operates in order so that they can fulfill customer needs as fast as possible.
From there the mediums that Zappos chooses becomes a no brainer. They’ve quickly embraced social media tools for the purposed of providing even better customer service.
Olivier, I agree! A CMO needs to be as concerned about his/her brand’s quality as its marketing strategies. He/she has to have a strong voice in the company to be successful. The company’s culture has to be one of openness to new ways to do business. Not a very sexy thing to talk about with branding/marketing people, but so true and important.
I agree with some of your thoughts, but can’t say I agree with all. I agree that you should only invest in (I believe you said borrow for ) something that will yield a return – I agree with that. Can’t say that I agree with the whole advertising aspect though. I think advertising pays, and you should budget for what is reasonable. You have a mom and pop grocery store down the block, yeah they should advertise, which is not to say buy out a whole page ad in the newspaper – that would be stupid / overkill / and a waste of money. It is realistic that if they advertise it will draw in new customers, who will be satisfied that it a quaint charming atmosphere, shorter lines, friendlier workers, and return again.
Now being a native from St. Paul, MN I shop at Target all the time, two or three times a week probably sometimes more. I do so not because of the advertising but because that is my hometown alma mater (of stores anyway).
I don’t know… you might be able to score a full page ad in the local paper these days. ;D
Interesting insight. I like the unique way you address the tools you think companies should be investing in. A fresh approach, especially since it is harder to measure subjective business tactics like creating good relationships/experience etc. We at Business Genome are also interested in “measuring what matters,” and pinpointing the exact DNA of a business to yield the best possible results.
Nice info, useful for me… thanks a lot… 🙂
This is interesting. However, I do not agree that advertising does not contribute to the long-term growth of a business. True, that you have to have a product with a unique selling point to capture the readers attention, and your creative message needs to be consistant with the look and feel of your brand. However, as long as your product is consistant with the image that you are putting out there through advertising, you will grow your brand.
At first I was hesitant about advertising because it was such a large investment. But when I took a look at where I wanted my brand to be, and then I took a look at all of the major successful brands that advertise: Coke, Pepsi, Loreal, Covergirl, 5 Hour Energy; I realized that to become a big brand I was going to have to play with the big brands. There are ways to do this in a less expensive fashion, you do not have to go through a big fancy agency that charges monthly retainer fees. I found an agency that books my media at 75-95% off of the normal rate card, and I do not have to pay any monthly retainers. If you are intersted check out Global Media Minds.