Advertising Is Dead. Long Live Advertising!

BY ADAM GROSSMAN

The expression “the king is dead, long live the king!” has existed since 1422 and was originally “used to simultaneously announce the death of the previous monarch and assure the public of continuity by saluting the new monarch” While this started with the passing of the father of Charles VII in France, the phrase has been applied to in numerous contexts ranging from sports, business, politics, culture, arts, and food (among others) throughout the world in the centuries since in some form to this day.

Advertising is no exception. In his latest title of a post for Forbes, CEO of Arcature Larry Light provocatively claims, “Advertising As We Know It Is Dead.” Light essentially reason for saying advertising “dead” is that much of current advertising is perceived as “disposable” content focused on building brand awareness. In addition, many of today’s marketers have a “love affair with digital, data and devices [that] has eclipsed the understanding [of] truly creative, memorable, persuasive and consistent advertising.” Light’s equivalent of “long live advertising” comes in the form of brand loyalty. More specifically, he claims “the primary role of marketing in general, and advertising in particular, is to create, reinforce and increase brand loyalty.”

There are several assumptions that Light makes in his post that make it difficult to accept his conclusions. First, the idea that the primary goal of advertising is brand loyalty is debatable at best. In B6A’s work with clients ranging from global Fortune 500 companies to local sports organizations, we have identified the four primary initiatives to consistently be customer acquisition, customer retention, brand perception / loyalty, and brand awareness.

We have also found that the most important goal is to directly maximize revenue growth through customer acquisition and retention whether through brand loyalty or any other means. For example, we have highlighted in a previous post how Lowe’s and Bud Light have used their NFL partnerships to create differentiated product offerings in mature markets to drive revenue growth by leveraging intellectual property (IP) of the team and its leagues. This focus on direct revenue generation is also the reason our Block Six Analytics Corporate Asset Valuation Model (CAV) ties lifts in brand perception / loyalty and brand awareness to lifts in revenue.  

It is important to examine brand awareness in this context and not how Light describes the concept. Light states, “Too many marketers merely focus on building brand and advertising awareness. Awareness is a yes/no dichotomy… you are or you are not aware.” That dichotomy is simply not accurate. Our Social Sentiment Analysis Platform (SAP) analyzes owned and earned media posts to determine both brand perception and brand awareness on a continuous (rather than binary) scale. Our research examining hundreds of companies in 27 industries has found that brands that achieve lifts in awareness through advertising do increase the probability of generating lifts in revenue.

There is an argument to be made that brand awareness is not important to all brands (the argument Light could have made but did not). However, brand awareness is important to those companies looking to reach new customers or enter new markets where they are unknown entity. That is one critical reason why companies such as Allegiant, Fiserv, and Empower have recently become naming rights partners. We highlight this logic in more detail in our case study with FirstEnergy and the Cleveland Browns.  

The last issue comes from Light’s argument comes from his position that advertising has a “love affair with digital, data and devices.” There are ways to highlight potential flaws Light’s position for each part of the “love affair”, but a wholistic critique can be found in a recent Hartford Business Journal article featuring ESPN President James Pitaro. He talks specifically about how “ESPN’s focus in 2019 would revolve around expanding digital offerings and appealing to a younger, more diverse audience.” The article later explains that the company looked at the data in the form of a “mass exodus of cable subscribers” and decided to seek rights for content that would grow its ESPN+ streaming channel such as UFC. The article helps demonstrate why more advertising dollars and focus is moving to digital - the data shows that the audiences they are frequently trying to reach are increasingly in this channel.

This is not to say Light does not make some good points in his post. He rightfully points out that brand loyalty should be an essential part of advertising strategy. He also the advertising that uses similar creative and slogans across multiple companies and products will likely not help to achieve this goal. However, brand loyalty is not everything or the only thing when it comes to advertising. Using data-driven decision making that looks at multiple channels based on a company’s specific goals is typically the most effective way to maximize ROI from advertising or sponsorship spend.