Irish advertising legend John Fanning has a brilliant piece on the current state of advertising in this month’s Marketing magazine. Fanning spans the breadth of the business, speaking sense and bringing clarity to adland’s bullshit.
One of his main points is that for some reason, we love hyperbole. We love declaring the new thing, feeling like we’re ahead of the curve and forgetting about the fundamentals of marketing, the knowledge and experience that’s gone before.
We’re like magpies, addicted to the shiny new tool and forgetful of our past, always moving on, but never dwelling on what we already know to be true.
There’s never a shortage of biased gurus peddling snake oil and telling us that the ‘death of’ (insert channel here) is nigh, and we love to agree with them.
The result is that there’s a legion of channel biased marketers out there. People who are making illogical strategic decisions based on their own hubris and without understanding of how brands grow.
A Fax Machine Marketing Strategy…
The German brand’s marketing team would do well to pick up a copy of Fanning’s article, because Adidas is on the precipice of making an objectively enormous and costly mistake.
Speaking late last year in Marketing Week, Adidas global head of digital ecosystem design David Greenfield offered a view that he might regret. He compared TV advertising to marketing via the ‘fax machine’.
“Of course TV still has a place but the fax machine still has a place too and I’m not about to create a fax machine marketing strategy.”
Last week, the company’s chief executive Kasper Rorsted went one step further. According to Rorsted, Adidas will stop spending on TV and focus on targeted digital advertising and creating more ‘direct engagement with customers’.
“It’s clear that the younger consumer engages with us predominately over the mobile device, digital engagement is key for us; you don’t see any TV advertising anymore.”
Now I don’t have access to any data about Adidas, nor am I an expert in their market. But I’m happy to make the bold prediction.
If this comes to pass, it will be incredibly damaging to one of the world’s great CPG brands.
How Brands Grow
For some reason, we keep hearing about the death of TV, how digital is so much more effective and why direct, personalised targeting is the holy grail. But that couldn’t be further from the truth.
We now know How Brands Grow. Sharp et al’s seminal text examines thousands of companies like Adidas, and outlines some key tenets for growth like penetration, mental/physical availability, salience and sustained broad reach. It explains how communicating in an interesting manner with a broad range of people is the best way to drive sustained growth, and why loyalty and targeting strategies can often damage a brand’s bottom line.
The likes of Binet & Field’s ongoing IPA research has supported this viewpoint, and the evidence about how vital TV is to drive brand growth has been proven again and again.
We also know that, far from dying, TV is still a huge part of all of our daily media diets – young and old.
We know that digital isn’t as effective as we thought. Only last week, a major study of CPG brands found that while digital has edged traditional channels as share of CPG advertising spending, retailers & shoppers give digital low marks for effectiveness.
And we know that digital engagement alone doesn’t drive sales.
Strong alone, better together
But most importantly we know that digital alone isn’t nearly as effective as when it’s paired with other channels.
The most recent example of this comes from research by Bain & Co. Let’s look at some of the main takeaways.
- Digital media is less expensive for reaching a limited group of consumers. However, the “recollected reach”—the percentage of total population reached who recall a campaign hits a ceiling at around 30%.
- TV advertising is far more scalable. While it is more costly than digital media for reaching relatively few consumers, TV messages are recollected at a higher rate—as high as 60%
- Our research found that purchase intent increases with multiple exposures to different types of media—not digital alone.
- Purchase intent reached 80% for those encountering an ad on many different media types, including digital and traditional.
- Big brands with mass appeal and high awareness beneﬁt from “reach and repeat”.
- The combination of traditional and digital was much more powerful than any single platform taken in isolation.
Pretty clear right?
But that’s not all.
What I’m not saying that TV is a holy grail. Digital is obviously an incredibly important channel for a brand like Adidas, and they’ve created some brilliant, innovative and effective digital campaigns recently.
But digital alone is akin to slow suicide for such a large brand.
The question for Adidas shouldn’t be ‘Digital Or TV’.
The answer should be ‘Digital & TV’.
Online businesses who sell digital advertising like Facebook, Google and Amazon spent over £640 million on TV in the UK last year. If the guys peddling digital advertising believe in TV, why doesn’t Adidas?
Good luck David…
The real issue here is why would you automatically bias yourself towards digital? Surely media neutrality is the way forward – taking every campaign on its merits and working out what is the best channel to communicate?
Why as CMO of a huge global brand would you arbitrarily choose to not use a channel that’s been proven to be the best brand building tool and the most effective way to reach your target audience? It smacks a fundamental bias towards digital.
Indeed, I’d go as far as to say it’s negligent!
Also, why the need to come out and crow about this decision, as if it were some stroke of strategic genius? Big congrats guys, you’re deciding to move away from the most effective marketing channel there is! Woah!
Adidas needs a strategy that will reach as many people as possible in inspiring and interesting ways, it needs to build mental structures to stave off the threat of Under Armour and Nike.
It does not need to focus solely on driving ‘loyalty’ and ‘engagement’ within a narrow target audience of current buyers, ignoring a large swathe of the market, while also damaging its brand recognition.
In his quote above, David Greenfield likens TV advertising to fax machine marketing, intimating that it’s a dead, dated medium that modern marketers should laugh at.
My take on that?
Best of luck with the new strategy David.
You’ll need it.