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SBP 219: The Sharp Cut - How Advertising Really Works · Sleeping Barber - A Marketing Podcast

• 0:00
  SPEAKER_00: Welcome to the Sleeping Baba podcast.
• 0:03
  SPEAKER_00: Welcome back to the Sharp Cut, where we like to take Mark these comfort blankets and cut them up with evidence.
• 0:15
  SPEAKER_00: You know, you got insert sound effect here.
• 0:18
  SPEAKER_00: Um is essentially what we did.
• 0:19
  SPEAKER_00: We can make our own truck.
• 0:22
  SPEAKER_00: Exactly.
• 0:23
  SPEAKER_00: So we like to cut these comfort blankets up with evidence, data, and and information, and challenge them.
• 0:30
  SPEAKER_00: We like to challenge them here.
• 0:31
  SPEAKER_00: That's what the sharp cut's all about.
• 0:33
  SPEAKER_00: Yeah.
• 0:34
  SPEAKER_00: And we have a doozy today, don't we, Mark?
• 0:36
  SPEAKER_00: Yeah.
• 0:37
  SPEAKER_01: How advertising really works.
• 0:39
  SPEAKER_01: Everyone that you work with thinks they know how advertising works.
• 0:43
  SPEAKER_01: Your CFO knows, the head of sales knows, the founder absolutely knows, the intern has a very strong opinion.
• 0:49
  SPEAKER_01: And that's the problem.
• 0:52
  SPEAKER_01: Ask them one at a time, and they'll all tell you something a little bit different.
• 0:56
  SPEAKER_00: It's funny because work actually went and measured this.
• 0:59
  SPEAKER_00: They asked marketers about their own leadership, and 60% said that the C-suite doesn't fully understand what advertising is even for.
• 1:08
  SPEAKER_00: 60%.
• 1:09
  SPEAKER_01: 60% is a big number.
• 1:10
  SPEAKER_01: So the people that are holding the budget and the people spending the money aren't working from the same idea of how that any of this works.
• 1:17
  SPEAKER_01: And that's not a small gap.
• 1:19
  SPEAKER_01: That's a majority for all those keeping scores.
• 1:23
  SPEAKER_01: And it's the whole problem, really, in one number.
• 1:26
  SPEAKER_00: And most of them never even sat down and worked out how our own trade functions.
• 1:30
  SPEAKER_00: But why would they?
• 1:32
  SPEAKER_00: For the last 15 years, the people teaching us how advertising works were Google and Facebook.
• 1:37
  SPEAKER_00: Brilliant teachers, but guess what?
• 1:39
  SPEAKER_00: They're also happening to be selling a textbook too.
• 1:42
  SPEAKER_00: Yeah.
• 1:44
  SPEAKER_01: 100% accurate.
• 1:46
  SPEAKER_01: Um, and but what we're not gonna do today is we're not gonna bury you in studies, uh, not yet.
• 1:51
  SPEAKER_01: Uh that might come in subsequent issues of this.
• 1:55
  SPEAKER_01: Which we'll like.
• 1:56
  SPEAKER_01: But the wild thing about what we're talking about, how advertising works, is that I think for the most part, you already have the evidence to figure it out.
• 2:04
  SPEAKER_01: It's sitting in your own dashboards, it's sitting in your own memory from every ad you've ever seen.
• 2:09
  SPEAKER_01: And what we're hoping to do is just ask you a few questions to look at it straight.
• 2:13
  SPEAKER_00: So lie down on a couch and we'll write, we'll walk through what most of the businesses believe about advertising.
• 2:22
  SPEAKER_00: And instead of telling you it's wrong, we ask you to check it again with what you already know.
• 2:28
  SPEAKER_01: And by the end, the model that almost everybody runs is gonna look almost exactly like what it actually is, which is a sales script from the early 1900s that nobody really ever updated.
• 2:40
  SPEAKER_01: So, how about Mark?
• 2:42
  SPEAKER_01: You and I start with the one we both fell for.
• 2:45
  SPEAKER_01: Yeah.
• 2:45
  SPEAKER_01: So before we we tell you how advertising actually works, uh, we have to sort of set the table here.
• 2:53
  SPEAKER_01: Because most of us are carrying around theories that fall apart.
• 2:56
  SPEAKER_01: Secondly, hold them up to any of your own experience.
• 2:58
  SPEAKER_01: And we think there's about six of them.
• 3:00
  SPEAKER_01: And so we're just asking you to check each one of these against with what you already know.
• 3:05
  SPEAKER_00: The first one, digital has no waste.
• 3:07
  SPEAKER_00: Traditional is wasteful.
• 3:09
  SPEAKER_00: And this is one I believed the hardest.
• 3:12
  SPEAKER_00: During my time at Golf Town, it was easy to believe digital had no waste because a category itself was really so targetable.
• 3:20
  SPEAKER_00: So going after golfers, it's gotta be easy.
• 3:23
  SPEAKER_00: Golf definitely leaves a trail.
• 3:24
  SPEAKER_00: Right?
• 3:25
  SPEAKER_00: And an enormous one.
• 3:26
  SPEAKER_00: Golfers search for drivers, irons, wedges, balls, shoes, apparel.
• 3:31
  SPEAKER_00: They watch equipment reviews, they compare brands, they come back when the season turns.
• 3:37
  SPEAKER_00: From a digital perspective, it felt like that's a perfect category.
• 3:41
  SPEAKER_00: Why spend broadly when you can speak directly to golfers already showing intent?
• 3:47
  SPEAKER_00: Yeah, and I would imagine the the dashboards you had agreed with you every single day.
• 3:51
  SPEAKER_00: Man, dude, so persuasive.
• 3:53
  SPEAKER_00: Pacer told us what people wanted, retargeting told us what who was close, email told us who had bought before, social and display could be aimed at golf interests.
• 4:04
  SPEAKER_00: Everything looked efficient.
• 4:05
  SPEAKER_00: And because golf is a passion category, the waste argument got even easier.
• 4:10
  SPEAKER_00: Why talk to everyone when we only need to talk to golfers?
• 4:14
  SPEAKER_00: Totally.
• 4:15
  SPEAKER_01: And that makes a lot of sense.
• 4:17
  SPEAKER_01: It's very seductive, I would suspect.
• 4:20
  SPEAKER_01: Um, and so the logic isn't dumb.
• 4:22
  SPEAKER_00: It sounds right.
• 4:25
  SPEAKER_00: And I think that inevitably that became the trap because not every future golfer is already behaving like a golfer in the data.
• 4:32
  SPEAKER_00: The laps golfer isn't searching this week.
• 4:35
  SPEAKER_00: The junior, the gift buyer, the casual player, the guy coming back after 10 years off, none of them sit neatly inside an intent audience.
• 4:44
  SPEAKER_00: And even among active golfers, the brand that comes to mind first often wins before the search even begins.
• 4:51
  SPEAKER_00: So digital found the heavy buyers, the people who are already in market.
• 4:55
  SPEAKER_00: It did.
• 4:56
  SPEAKER_00: And but that isn't no waste.
• 4:59
  SPEAKER_00: That's being very good at seeing the people who are easiest to see.
• 5:03
  SPEAKER_00: That's a part I had to personally unlearn.
• 5:06
  SPEAKER_01: Yeah, meanwhile, the traditional buyer looks wasteful because it hits people outside of the buying window.
• 5:10
  SPEAKER_01: Or exactly.
• 5:12
  SPEAKER_01: You don't actually know, even.
• 5:13
  SPEAKER_01: Is you don't know.
• 5:14
  SPEAKER_00: Right.
• 5:15
  SPEAKER_00: And in a seasonal memory-driven category like golf, the broader exposure from this quote unquote wasteful media is the thing that makes you the brand name they think of when the season opens.
• 5:27
  SPEAKER_00: So when someone gets invited to a tournament, when Father Day is coming, when they decide this is the year they finally upgrade their driver.
• 5:36
  SPEAKER_01: Right.
• 5:37
  SPEAKER_01: And then you can test the no waste promise from both ends yourself.
• 5:42
  SPEAKER_01: So try to reach everyone in your own building, your own postcode, and then see if you can.
• 5:47
  SPEAKER_01: And then run it backwards and try and exclude one person.
• 5:51
  SPEAKER_01: Try and exclude just your CEO from the list and promise them that they'll never see your own brand's ads.
• 5:57
  SPEAKER_00: And neither works.
• 5:58
  SPEAKER_00: They still see the ad, and then they forward it to you asking why they're being targeted by their own company.
• 6:04
  SPEAKER_00: I can't tell you how many times that's happened to me.
• 6:07
  SPEAKER_01: Me too.
• 6:08
  SPEAKER_01: Yeah.
• 6:10
  SPEAKER_01: And vice versa, we've also bought billboards in front of the offices where the head office is just to make sure people solve the campaign.
• 6:17
  SPEAKER_01: Absolutely.
• 6:18
  SPEAKER_01: Both kinds of media spill way past the buyer.
• 6:21
  SPEAKER_01: And so we ultimately just build these dashboards because we have the data for the digital side of things.
• 6:27
  SPEAKER_01: And that ultimately hides the spill.
• 6:29
  SPEAKER_00: Yeah.
• 6:30
  SPEAKER_00: Digital was efficient, but efficient at what?
• 6:33
  SPEAKER_00: That turned out to be the better question.
• 6:36
  SPEAKER_01: Yeah.
• 6:38
  SPEAKER_01: So target the high-intent audiences in M1.
• 6:41
  SPEAKER_01: And this one's a bit of a confession for me.
• 6:43
  SPEAKER_01: Um it's related to the first one that you talked about, that there's no ways, but slightly different take on this.
• 6:49
  SPEAKER_01: It's a different story.
• 6:51
  SPEAKER_01: So for years, um, I worked in B2B, and then uh with this one particular role, I was targeting in-market B2B audiences.
• 7:00
  SPEAKER_01: So use Zoom Info.
• 7:01
  SPEAKER_01: Uh, I don't know if you ever use it, but it's like this high-intent uh service that you can buy lists of names from.
• 7:09
  SPEAKER_01: Uh and you can pay for high-intent lead lists.
• 7:12
  SPEAKER_01: And then I also did it with aggregators, like sites that collected um names of emails from people who are looking for ERP systems.
• 7:20
  SPEAKER_01: And then you buy that from those sites.
• 7:23
  SPEAKER_01: So in theory, it sounds and that's like a really common standard playbook.
• 7:27
  SPEAKER_01: Okay.
• 7:27
  SPEAKER_01: And so in theory, that sounds great.
• 7:30
  SPEAKER_01: You know, start with a perfect content list.
• 7:33
  SPEAKER_01: Sure.
• 7:34
  SPEAKER_01: And then in practice, though, the first thing that we had to do was scrub the lists because there's a whole bunch of emails that were like 20 to 30 percent or even higher that weren't real.
• 7:46
  SPEAKER_01: And so you'd get hard bounces and then it would cause a whole bunch of problems.
• 7:51
  SPEAKER_01: So to begin with, we had to like scrub the data.
• 7:55
  SPEAKER_01: Right.
• 7:55
  SPEAKER_01: And then from there, then we can then take the remaining you know, 60-70% of the list, and then we'd put them in in nurture funnels.
• 8:03
  SPEAKER_01: And the conversion part was so low, it became a fight with the sales team, and they kept telling us that those leads were nowhere close to being really good, qualified leads.
• 8:13
  SPEAKER_00: This is something I always struggle with, but like how could they how could they possibly know?
• 8:18
  SPEAKER_01: So the one guy that I would think about all the time when this comes up is that he's like, you know how I know they don't pick up the phone.
• 8:27
  SPEAKER_01: Like, oh, okay, fair enough.
• 8:30
  SPEAKER_01: Oh, okay.
• 8:33
  SPEAKER_01: Uh, you know, that was the answer.
• 8:35
  SPEAKER_01: And so, you know, hit from from his perspective, if somebody's really interested, they would pick up a phone.
• 8:41
  SPEAKER_01: Um, a phone call.
• 8:43
  SPEAKER_01: And the part that took me years really to see that was a really good truth, a really important truth.
• 8:50
  SPEAKER_01: Um, the one person that really does do a lot of this research for ERPs and any other kind of software is usually a junior who's hired or brought on to do like the early research for the buying committee.
• 9:04
  SPEAKER_01: And the high-intent name that we often pay for often had no say in the decision making at all.
• 9:10
  SPEAKER_01: So we weren't buying the buyer, we were buying information finder.
• 9:14
  SPEAKER_00: So what you're saying is you were paying a premium to reach the one person in the building who couldn't even sign the check.
• 9:22
  SPEAKER_01: Yeah.
• 9:23
  SPEAKER_01: Right.
• 9:23
  SPEAKER_01: And then so that then that kind of leads into this whole idea about like, well, who is the buying committee?
• 9:28
  SPEAKER_01: And turns out there's 15 or 16 people.
• 9:31
  SPEAKER_00: That's right.
• 9:31
  SPEAKER_01: We only had one guy's name.
• 9:36
  SPEAKER_00: Okay, well, I think this dovetails perfectly into the third one here that we have, which is advertising as sales done over media.
• 9:42
  SPEAKER_00: And I think this is this is another big one.
• 9:45
  SPEAKER_00: The belief underneath all of the others, advertising drives sales, full stop.
• 9:50
  SPEAKER_00: Money in, sales out this quarter.
• 9:52
  SPEAKER_00: And James Herman has a frame has a phrase for this.
• 9:55
  SPEAKER_00: He says we treat advertising as sales done over media.
• 9:59
  SPEAKER_00: Yeah, I totally love that line.
• 10:01
  SPEAKER_01: And I think that's actually a trap.
• 10:04
  SPEAKER_01: If you believe that, then answer this.
• 10:07
  SPEAKER_01: When a quarter gets tight, what's the first thing that gets cut?
• 10:11
  SPEAKER_01: Gotta be advertising every single time.
• 10:14
  SPEAKER_01: Pretty much.
• 10:16
  SPEAKER_01: But you would never cut the sales team in the exact month that you need sales most.
• 10:20
  SPEAKER_01: Right.
• 10:21
  SPEAKER_01: So if advertising is sales done over media, then you would never cut it.
• 10:26
  SPEAKER_01: Yeah.
• 10:27
  SPEAKER_01: You'd protect it.
• 10:28
  SPEAKER_01: But with advertising, the thing that we just said drives this quarter's revenue.
• 10:32
  SPEAKER_01: It's the first thing that gets cut.
• 10:34
  SPEAKER_01: So there's a there's a disconnect there.
• 10:36
  SPEAKER_01: And those both those beliefs can't be true.
• 10:39
  SPEAKER_01: So it either drives sales now, in which case cutting it is insane, or underneath and all, we don't really believe it works the way we keep saying it.
• 10:47
  SPEAKER_01: So then the cut actually is the proof point for what we think.
• 10:51
  SPEAKER_00: Well, that one hits that one hits hard because obviously I think everyone could feel like this is uh it's probably the ladder there.
• 10:59
  SPEAKER_00: Okay, what's uh what's number four there, Mark?
• 11:02
  SPEAKER_00: What do we have?
• 11:03
  SPEAKER_01: Creative is just a decoration.
• 11:06
  SPEAKER_00: The targeting does the work.
• 11:07
  SPEAKER_00: Well, forget every study for a second.
• 11:10
  SPEAKER_00: There's a there's this line the industry loves that we all see thousands of ads a day.
• 11:14
  SPEAKER_00: Byron Sharp pointed, we had just had a conversation with him.
• 11:18
  SPEAKER_00: And his point that this is all nonsense.
• 11:20
  SPEAKER_00: If you saw 7,000 ads today, name the ones that you saw this morning.
• 11:24
  SPEAKER_00: Can you, Mark?
• 11:25
  SPEAKER_00: Yeah.
• 11:26
  SPEAKER_00: I can't I honestly can't.
• 11:27
  SPEAKER_00: I have no clue.
• 11:29
  SPEAKER_01: And most days I have no idea.
• 11:31
  SPEAKER_00: I'd have to ask my wife, but like, yeah, um what ads did I see?
• 11:37
  SPEAKER_00: What what what ads did I see, honey?
• 11:40
  SPEAKER_00: But the reality is, is like nobody can because most ad exposures are fleeting.
• 11:44
  SPEAKER_00: Half a second, eyes already moving on to something else.
• 11:48
  SPEAKER_00: Sharp's whole point is that your real reach is far lower than your media plan claims.
• 11:53
  SPEAKER_00: And what little lands is a is a glance at best.
• 11:57
  SPEAKER_00: So in that glance, the ad has to be recognized as yours, and then it needs to leave a trace.
• 12:04
  SPEAKER_00: That's entirely a creative job.
• 12:07
  SPEAKER_00: Targeting buys the glance, creative decides whether or survives it.
• 12:12
  SPEAKER_01: Yeah, which is why you can still sing jingles from when you were a kid, like the two all beef patty special sauce on this cheese pickles, and you're not a Sesame Seed Bond.
• 12:20
  SPEAKER_01: But you can name a perfectly targeted ad from last night.
• 12:25
  SPEAKER_01: The targeting was fine, but the ad just didn't earn the memory.
• 12:29
  SPEAKER_00: That's yeah, that's a fair point.
• 12:31
  SPEAKER_00: All right, number five, one of my personal favorites.
• 12:33
  SPEAKER_00: I think yours.
• 12:36
  SPEAKER_01: Run run with it, boy.
• 12:38
  SPEAKER_01: We've heard this one a lot.
• 12:40
  SPEAKER_01: Yes.
• 12:40
  SPEAKER_01: Um, I do have a story for this one.
• 12:42
  SPEAKER_01: So a few years ago, I think it was about the same time that we were working at SportCheck.
• 12:47
  SPEAKER_01: Probably.
• 12:48
  SPEAKER_01: Um, we ran a test in the hockey market.
• 12:50
  SPEAKER_01: We had intense signals for people um who love specific brands, so like Bauer, CCM, Graf, Sherwood.
• 12:57
  SPEAKER_01: And then we targeted them with Taylor ads and then compared the ROAS against the just running one generic hockey ad to everyone.
• 13:05
  SPEAKER_01: And obviously net mass personalization won.
• 13:09
  SPEAKER_01: That's what the people presenting it said, and so it was their idea, and they had an agenda to prove that personalization works.
• 13:16
  SPEAKER_01: So they read the the they read the data and showed that they beat the generic ad.
• 13:21
  SPEAKER_01: Then I went back and look into the exact same data, the same data set, and I didn't change anything and recalculated the numbers.
• 13:29
  SPEAKER_01: But the tailored targeting was not better than the generic ad.
• 13:33
  SPEAKER_01: And they'd interpret it to land where they wanted it to land.
• 13:36
  SPEAKER_01: Right.
• 13:38
  SPEAKER_00: Yeah.
• 13:39
  SPEAKER_00: And the bigger tell is time, right?
• 13:42
  SPEAKER_00: We've been promised one-to-one personalization for 15 years, and nobody can actually do it.
• 13:47
  SPEAKER_00: Ad blockers use uh uses keep climbing.
• 13:51
  SPEAKER_00: Cookies are going away.
• 13:52
  SPEAKER_00: And Meta's own Andromeda system is telling advertisers the way better, it's way better for you to reach more people with your ads, not fewer people.
• 14:02
  SPEAKER_01: Yeah, and that's and it which is such an like an admission, I would say, from Meta that the platform that really was built on targeting individuals is quietly saying to stop targeting individuals.
• 14:14
  SPEAKER_01: Absolutely.
• 14:15
  SPEAKER_00: I think that should tell us something.
• 14:17
  SPEAKER_00: I think well we should we should be and we talk about it often enough.
• 14:21
  SPEAKER_00: So at least you've here you've heard it here if you haven't actioned anything yet.
• 14:25
  SPEAKER_00: Oh yeah, why don't you take this last one, B, and and kick us off here?
• 14:29
  SPEAKER_00: I know, I know, I said the previous was one of my favorite ones.
• 14:31
  SPEAKER_00: I this one has to be right up there as well.
• 14:33
  SPEAKER_00: But last click attribution tells us what works, and this is the one that really I think does a great job tying it all together.
• 14:39
  SPEAKER_01: So the dashboard says last click or ROAS is the truth.
• 14:43
  SPEAKER_01: And and you know, I tried to explain it to my wife on the drive home the other day.
• 14:48
  SPEAKER_01: She's an accountant.
• 14:49
  SPEAKER_01: Um, and it was good with numbers.
• 14:51
  SPEAKER_01: Yeah.
• 14:52
  SPEAKER_01: It's funny because she'll say, I'm not good at math, but I'm like, You're an accountant.
• 14:56
  SPEAKER_01: She's like, Yeah, accounting's not math.
• 14:57
  SPEAKER_01: I just need to make things balanced.
• 14:59
  SPEAKER_01: I'm like, okay.
• 15:02
  SPEAKER_01: Um, but it was surprisingly hard to talk to her about that.
• 15:07
  SPEAKER_00: But it helped me understand that.
• 15:08
  SPEAKER_00: Why would that be hard?
• 15:11
  SPEAKER_01: Because in her world, a reported number is real, it's been validated.
• 15:16
  SPEAKER_01: And when I told her that the number on the marketing dashboard isn't real in the same way, that's where the conversation started breaking down.
• 15:24
  SPEAKER_01: And trying to explain why it wasn't real was really difficult.
• 15:30
  SPEAKER_01: And it's not because she doesn't get it, like she's smart, she's an accountant.
• 15:33
  SPEAKER_01: It's just that the last click number looks just as confident as any other number in her ledger.
• 15:39
  SPEAKER_01: It just doesn't mean what we think it means.
• 15:43
  SPEAKER_00: So do the arithmetic, nobody does.
• 15:46
  SPEAKER_00: Open every channel's dashboard and add up the ROAS.
• 15:50
  SPEAKER_00: 200%, 300%, sometimes even more, but you only banked 100% of the revenue.
• 15:56
  SPEAKER_00: So every channel is claiming credit for sales that added up, but actually never happened.
• 16:02
  SPEAKER_01: Yeah, and it's not even last click, and you know, it's meta claims that Google claims it, Amazon, Pinterest, they're all claiming the same sale.
• 16:09
  SPEAKER_01: And some of it's through View Through, yeah, where nobody even clicked, depending on the model uh that you're using.
• 16:15
  SPEAKER_01: And so the dashboards aren't lying about a number, they're lying about the cause.
• 16:21
  SPEAKER_01: Because they just don't know.
• 16:22
  SPEAKER_01: And each one is taking credit for a sale that was already coming in some cases.
• 16:27
  SPEAKER_00: Yeah, I think this is where Byron Sharp becomes useful once again.
• 16:31
  SPEAKER_00: A lot of what we call advertising isn't advertising at all.
• 16:34
  SPEAKER_00: You think about search ads, retargeting, those are wayfinders.
• 16:38
  SPEAKER_00: Someone's already in the mall, already falling towards a purchase, and you're just the sign pointing to that shelf.
• 16:46
  SPEAKER_00: That's why they convert so well.
• 16:48
  SPEAKER_00: They're not influencing anyone, their physical availability.
• 16:51
  SPEAKER_01: True.
• 16:52
  SPEAKER_01: And which is why I think what you actually wanted was never robast, it was incrementality.
• 16:58
  SPEAKER_01: And what did this ad genuinely do that wouldn't have happened before?
• 17:04
  SPEAKER_01: And that's really the hard part.
• 17:05
  SPEAKER_01: You can't see that in one click on one day and on one dashboard.
• 17:09
  SPEAKER_00: Which is exactly where the real model begins.
• 17:14
  SPEAKER_01: So this is now part two V.
• 17:16
  SPEAKER_01: Let's get into this.
• 17:18
  SPEAKER_01: How does it actually work?
• 17:19
  SPEAKER_01: We've torn down the six theories, and we're in the thing that nobody says out loud, we've gotten through some of those.
• 17:25
  SPEAKER_01: They're not really six mistakes.
• 17:26
  SPEAKER_01: They're just one mistake, just wearing different outfits.
• 17:29
  SPEAKER_00: Every one of them comes from the same inherented idea that advertising is sales, just done over media instead of face-to-face.
• 17:37
  SPEAKER_00: Put the right argument in front of the right person, and then they'll just buy it.
• 17:42
  SPEAKER_00: Persuade them harder.
• 17:43
  SPEAKER_01: Uh and it sounds completely reasonable, which is why the whole building and the C believes it.
• 17:49
  SPEAKER_01: And the CFO, the sales team, the founder, and everyone in marketing.
• 17:53
  SPEAKER_00: Quick bit of history here.
• 17:55
  SPEAKER_00: Actually, you know what I should do for my YouTube audience?
• 17:58
  SPEAKER_00: Quick bit of history, put on my glasses like that.
• 18:01
  SPEAKER_00: Oh.
• 18:02
  SPEAKER_00: Like that.
• 18:04
  SPEAKER_00: So this idea is usually credited to a guy called Elmo Lewis back in the late 1800s.
• 18:10
  SPEAKER_00: It's shaky at best, but the version that actually stuck showed up in 1904 in a magazine called Salesmanship.
• 18:19
  SPEAKER_01: Oh, I didn't know that.
• 18:20
  SPEAKER_01: Which is the whole point, but it was built by a salespeople and to train salespeople.
• 18:25
  SPEAKER_01: And marketers just borrowed it and never really updated it.
• 18:28
  SPEAKER_01: And we've been running the sales script from 1904 and wondering why it only works half the time.
• 18:33
  SPEAKER_00: So if the model is wrong, what does the evidence actually show?
• 18:38
  SPEAKER_00: Start with the ads everyone calls great.
• 18:40
  SPEAKER_00: Think about the Dollar Shave Club, the launch film, one of the most famous direct response ads ever made.
• 18:46
  SPEAKER_00: Five million people watched it in a week.
• 18:50
  SPEAKER_01: And a fraction of the people bought it.
• 18:53
  SPEAKER_01: Same with the Whopper Burger King's Brand FE award winner.
• 18:57
  SPEAKER_01: The most celebrated ads in the world barely move people who see them.
• 19:01
  SPEAKER_00: Now check it against your own funnel, your e-commerce site, the warmest audience you'll ever have, people who already click through and are standing in your store.
• 19:10
  SPEAKER_00: Best case that it converts, what, 5%?
• 19:13
  SPEAKER_00: Usually 2 to 2 and a half, but you know, so even at the very bottom, with the most in-marking people you'll ever get, almost nobody buys today.
• 19:23
  SPEAKER_01: And that's where we gotta remember uh Professor Sharp's point.
• 19:27
  SPEAKER_01: The the stuff that does convert, search retargeting and those types of things, isn't necessarily advertising persuading anyone.
• 19:34
  SPEAKER_01: It's just wayfinding.
• 19:36
  SPEAKER_01: So catching people who already fallen toward the shelf and guess guiding them in there.
• 19:41
  SPEAKER_01: So if the best ads barely convert and the high converting stuff is just pointing to people on the shelf, then persuasion in the moment was never the mechanism.
• 19:50
  SPEAKER_01: We've been grading advertising on a job it was actually never doing.
• 19:54
  SPEAKER_00: Right.
• 19:55
  SPEAKER_00: And so here's the version that fits the evidence.
• 19:57
  SPEAKER_00: Advertising is a weak force, it doesn't convert you or persuade you.
• 20:02
  SPEAKER_00: It slightly increases the chance you pick a brand next time you're buying.
• 20:06
  SPEAKER_00: That's it.
• 20:07
  SPEAKER_00: And it does that two ways at two different times.
• 20:11
  SPEAKER_01: Yeah, and I should mention here there's so many great, we'll put some show notes in, but there's a great video from Les Bennett uh talking about this.
• 20:20
  SPEAKER_01: Yeah.
• 20:20
  SPEAKER_01: Um and then James Herman as well, and Byron Sharp and Mark Ritson.
• 20:25
  SPEAKER_01: There's all everybody that that is that we've ever had on the show talks about this.
• 20:29
  SPEAKER_01: But anyway, two jobs uh that we got to do.
• 20:32
  SPEAKER_01: So one is with the people who aren't in market yet.
• 20:34
  SPEAKER_01: You're not closing them, you're building a feeling and you're building a memory so that when they finally do need what you sell, then you come to mind first.
• 20:42
  SPEAKER_01: Yeah.
• 20:42
  SPEAKER_01: And so that's what James Herman, we just talked to him about, calls that creating future demand.
• 20:47
  SPEAKER_00: Yeah, and it works on feelings, not arguments.
• 20:50
  SPEAKER_00: Think about a brand, the brand ads that really stuck with you.
• 20:54
  SPEAKER_00: They barely say anything explicit about the product.
• 20:58
  SPEAKER_00: Sorry.
• 20:58
  SPEAKER_00: They barely say anything explicit about the product.
• 21:01
  SPEAKER_00: They're not listing reasons to buy, they're leaving a feeling.
• 21:05
  SPEAKER_00: That's the weak force doing its job.
• 21:08
  SPEAKER_01: And job two is the easy one right now.
• 21:10
  SPEAKER_01: So someone's finally in the market, ready to buy.
• 21:13
  SPEAKER_01: Now you just confirm the feeling you planted, and then you get them over the line.
• 21:17
  SPEAKER_01: And that's converting the future demand into current demand.
• 21:21
  SPEAKER_01: And that's where your wayfinders are in their key.
• 21:24
  SPEAKER_00: So now it's kind of story time, could we call it story time?
• 21:27
  SPEAKER_00: Let's think about a corn farmer or picture a farm.
• 21:29
  SPEAKER_00: Maybe that's a better way of doing this.
• 21:31
  SPEAKER_00: Picture a farm.
• 21:32
  SPEAKER_00: One field you harvest today, that's this week's cash.
• 21:36
  SPEAKER_00: The next field over you've just planted, nothing is showing yet.
• 21:40
  SPEAKER_01: Yeah, and Tim Amler's got a great uh paper about this called Marketing Metrics.
• 21:45
  SPEAKER_01: It talks a lot about this, but you never say the harvest proves the planting was waste.
• 21:50
  SPEAKER_01: The planting part is why there's anything to harvest ever at all.
• 21:54
  SPEAKER_01: Right.
• 21:54
  SPEAKER_01: And so advertising is saying the harvest shows up in the sales report, the planting doesn't.
• 21:59
  SPEAKER_01: So we
• 22:00
  SPEAKER_00: Keep crediting the harvester and ignoring whoever gets through the crawl.
• 22:04
  SPEAKER_00: Take McCain.
• 22:05
  SPEAKER_00: When the chips are down, for 10 years they ran one emotional idea, the joyful reality of a family tea time or dinner.
• 22:12
  SPEAKER_00: No hard sell, no rational pitch about the chips, just a feeling over and over and over again to everybody.
• 22:19
  SPEAKER_01: Yeah, and it's a great case study, uh, also from Les Bennett who's involved in this one.
• 22:24
  SPEAKER_01: But the it really works slowly.
• 22:27
  SPEAKER_01: And the ad awareness roughly doubled across the decade from 7% to nearly 14.
• 22:33
  SPEAKER_01: Nobody watched when Ad and drove out for a bag of chips.
• 22:36
  SPEAKER_01: Maybe it happened, but that's not what they were measuring.
• 22:38
  SPEAKER_01: The feeling built up quietly until McCain was the one brand that came to mind.
• 22:43
  SPEAKER_00: That's a forgotten half.
• 22:45
  SPEAKER_00: Proven in one campaign.
• 22:47
  SPEAKER_00: They weren't closing a sale in that quarter.
• 22:49
  SPEAKER_00: They were planting, they were planting one instead.
• 22:52
  SPEAKER_00: It won the biggest effectiveness award going, and the payoff took years, not a quarter.
• 23:00
  SPEAKER_01: Yeah, and over nine years, the price elasticity improved.
• 23:03
  SPEAKER_01: It decreased.
• 23:04
  SPEAKER_01: In other words, they increased volumes without and they increased price, which was insane.
• 23:11
  SPEAKER_01: Nine years running.
• 23:12
  SPEAKER_01: So it was a hugely profitable campaign.
• 23:15
  SPEAKER_02: Yep.
• 23:15
  SPEAKER_01: And so here's where we land.
• 23:17
  SPEAKER_01: The almost everyone you work with is running a sales script from 1904.
• 23:21
  SPEAKER_01: And that's why the theories all contradict each other and why they fall apart the second you start checking them against your own evidence.
• 23:27
  SPEAKER_00: Advertising isn't sales done faster.
• 23:30
  SPEAKER_00: It doesn't persuade anyone in a moment.
• 23:32
  SPEAKER_00: It's a weak force that builds a memory and a feeling now for decisions someone will likely make later.
• 23:39
  SPEAKER_00: Plant, then harvest.
• 23:40
  SPEAKER_00: Both jobs in order.
• 23:43
  SPEAKER_01: Yeah, and once you see it that way, the contradictions start to disappear.
• 23:46
  SPEAKER_01: The waste, the high intent leads that go nowhere, the row us that adds up to more than you made.
• 23:52
  SPEAKER_01: Those were never the mysteries.
• 23:54
  SPEAKER_01: That's just what happens when you run a sales script and you call it advertising.
• 23:58
  SPEAKER_00: We're not saying selling today doesn't count, by the way.
• 24:01
  SPEAKER_00: We're saying it's just half the job, the half that we've forgotten, because we keep treating media like sales is the planting.
• 24:11
  SPEAKER_00: No planting.
• 24:12
  SPEAKER_00: Oh what?
• 24:13
  SPEAKER_00: Are we just repeating ourselves here now?
• 24:16
  SPEAKER_00: Yeah, you can just and we treat media like sales.
• 24:20
  SPEAKER_00: Okay.
• 24:21
  SPEAKER_00: We're not saying selling today doesn't count.
• 24:23
  SPEAKER_00: We're saying it's just half the job.
• 24:25
  SPEAKER_00: The half we forget because we keep treating media like sales.
• 24:30
  SPEAKER_01: Yeah, so if we go back to the beginning, we talked about that 60% number.
• 24:33
  SPEAKER_01: That 60% of the marketers say that C-suite doesn't understand what advertising is for.
• 24:39
  SPEAKER_01: And here's a harder version of that.
• 24:41
  SPEAKER_01: A lot of the time the reason they don't understand is that we can't explain it.
• 24:45
  SPEAKER_01: Not past the platitudes and the phrases and the tofu and the bofu and the mofu.
• 24:50
  SPEAKER_01: We don't really have a clear way to explain it.
• 24:53
  SPEAKER_00: Yeah, like we say things like awareness, we say emotion, and then we stop.
• 24:57
  SPEAKER_00: Because that's where our own understanding also runs out.
• 25:00
  SPEAKER_00: That's why there are so many competing theories in one building.
• 25:04
  SPEAKER_00: It isn't only that leadership doesn't get it, it's that we haven't done the work to get it ourselves.
• 25:11
  SPEAKER_01: So here's the real challenge, I think, V, and it's really on us, you and I and all the other marketers and advertisers out there.
• 25:19
  SPEAKER_01: We we really need to become experts in our own trade.
• 25:22
  SPEAKER_01: Uh, we have to be able to explain both halves properly.
• 25:27
  SPEAKER_01: We have to be able to explain how memory actually works.
• 25:30
  SPEAKER_01: It's it sounds like biology and psychology, and it is.
• 25:34
  SPEAKER_01: Yeah.
• 25:35
  SPEAKER_01: And it's important that we do it.
• 25:36
  SPEAKER_01: So we have to understand associative memory and the category entry points and how that gets brands into a buying moment, and then how we measure that and how buyers actually buy.
• 25:46
  SPEAKER_00: And how advertising can pull price sensitivity down over years, not just spike revenue in this quarter.
• 25:52
  SPEAKER_00: Explain that to a CFO in plain terms, and the 60% starts to take care of itself.
• 25:58
  SPEAKER_01: Yeah, and the plain terms part is a real test.
• 26:00
  SPEAKER_01: Like the Occam's razor component of this, if you actually understand something, you can say it simply.
• 26:05
  SPEAKER_01: And that ultimately becomes your measure.
• 26:08
  SPEAKER_01: The right explanation is often the simplest one, as we've talked about before, and and really not the one with the most jargon bolted on.
• 26:16
  SPEAKER_01: Like all the decks full of buzzwords don't actually mean that we get it.
• 26:20
  SPEAKER_00: Absolutely.
• 26:21
  SPEAKER_00: And the version that has lasted is exactly that.
• 26:24
  SPEAKER_00: Lesbinette fits the whole thing on one slide.
• 26:27
  SPEAKER_01: His summary in his video is really it's about nine minutes.
• 26:30
  SPEAKER_01: It's really worth watching.
• 26:32
  SPEAKER_01: But his summary is that advertising increases, maintains sales and or margins by slightly increasing the chance that people will choose your brand, by making the brand easy to think of and easy to buy, by creating positive feelings in association through broad-reaching ads that people will find interesting and enjoyable, and targeted activations that they will find relevant and useful.
• 26:53
  SPEAKER_01: That's it.
• 26:55
  SPEAKER_00: That's so true.
• 26:57
  SPEAKER_00: Two mechanisms under that make the brand quick to come to mind and easy to actually buy, and give people a good feeling about it.
• 27:05
  SPEAKER_00: So when it does come to mind, choosing it just feels right.
• 27:09
  SPEAKER_01: Yeah.
• 27:10
  SPEAKER_01: And the two kinds work to pull it off.
• 27:12
  SPEAKER_01: Broad odds are you know the ones that people want to watch, doing the feeling, the memory, and then the sharper activation people find useful, it closes the gap once or in one.
• 27:21
  SPEAKER_00: Which is the plant and the harvest idea coming back around one more time.
• 27:25
  SPEAKER_00: Bennett was saying it years ago, and it still holds today.
• 27:29
  SPEAKER_00: And that's the whole farm, V.
• 27:30
  SPEAKER_00: That's how advertising really works.
• 27:33
  SPEAKER_00: Start planting, everybody.
• 27:36
  SPEAKER_01: Thanks for keeping this in your ears.
• 27:39
  SPEAKER_01: Stay started.