Advertising $$$ Wasted?

Sorry for the lack of blogging, things have been crazy at Ad Oasis. 6D Marketing is gaining attention and the phones are ringing off the hook. I encourage all of you to be a fan of our facebook page, it will keep you update on the happenings of Ad Oasis and 6D Marketing.

Last time we talked about Neuromarketing and briefly brought up advertising cost. In 2005 U.S. Corporations spent more than $7.3 billion on consumer research, and in 2007 that figure rose 39% to $12 billion: in just 2 years.

All this money is spend on advertising and research, but how much of what we see, do we retain? We are over whelmed with advertisements. By the time the average consumer reaches 65, they will have seen nearly two million commercials. That is equivalent to watching eight hours of ads, seven days a week for 6 straight years. Needless to say, we as consumers are numb to advertising.

As you know, advertising has changed and continues to change all the time. The challenge is always, how do you reach consumers and get them to remember you ad over your competitor. Some more figures for thought: It took 38 years for radio to reach 50 million Americans. It took 13 years for network television to reach 50 million Americans. It only took 3 years for the Internet to reach 50 million Americans!

MEET TODAY’S NEW CONSUMER

“The new consumer transcends age, ethnic group and to some extent, income! Their style of consumption is so distinctive. They’re consumers rather than buyers. These differences influence every aspect of t heir lifestyle.”

They are immune to ineffective advertising. In 1965 a typical consumer had a 34% recall of commercials and by 1990 that figure had fallen to just 8%. A recent telephone survey of 1,000 consumers found that the average person could name a mere 2.21 of the commercials they had seen.

Let’s look at two case studies. In 1949 Circuit City opened it doors and quickly becomes the 2^nd largest U.S. electronics retailer with 567 Superstores.

In November 2008 they closed 155 stores after they filed for Chapter 11. Then, in January 2009, all the remaining stores are liquidated. What happened? Circuit City failed to continuously build up their brand throughout time.

The second case study is Best Buy. Best Buy opened their doors in 1966 and after a series of acquisitions and growth, they now operate 1,150 stores. Best Buy’s revenue for the fiscal month ending January 2009, rose 4% to $7.5 billion. Despite all the difficult and ever-changing retail landscape, Best Buy has continuously increased brand awareness in interactive environments. According to Best Buy’s customers, their brand represents: Excellent product assortment, satisfactory pricing and convenience.

The questions remain: If all this massive amount of money is being spent, why is there so much failure? What really drives consumers to make the choices they do? What really causes them to choose one brand or product over another? What are shoppers really thinking?

Neuromarketing

We have been talking about the problems that advertisers are facing, so today; we will talk about the solution.

Neuromarketing is the marriage of marketing and science creating a window into the human mind. It is helping to revel WHY and WHAT advertising messages are being remembered and what messages are being forgotten.

Here comes the bold statement, so get ready for it. The truth is never easy to handle: Companies do not understand consumers. The brands that they are developing do not match the consumers’ thought process and their needs. And, just by chance their needs are met, marketers do not communicate their products and services in a way that grips minds and hearts. Basically: Companies need consumers to not only purchase a product, but remember it, have a loyalty to it, and keep coming back for more.

Martin Lindstrom, who wrote the book, Buyology, stated. "Advertisers are like Christopher Columbus in 1492, gripping a torn, hand-drawn map as the wind picked up and his boat lurched toward what might or might not be land."

Neuromarketing is unlocking the subconscious thoughts, feelings and desires that are driving purchasing decisions by consumers. Here is what the biggest discovery: Consumers think one thing subconsciously and consciously say another! Which, as you can imagine, creates a huge problem for marketers.

Another glaring issue is that marketers have been using the same out-dated research for decades: Quantitive and Qualitative research. The issue is that small factors slant focus group responses and these responses determine advertising techniques. These techniques do not work because consumers and marketers don't understand their subconscious buying behaviors.

You buy Colgate toothpaste, Gillette razors, Coke over Pepsi, Ford over Dodge, and the list goes on. But why? You might not be able to answer what brand of toothpaste you have in your bathroom right now, but when you get to the store, you know exactly what kind of toothpaste to get.

The fact of the matter is that 60% of shoppers make decisions in less than 4 seconds. Most purchase decisions are made from the unconscious area of the brain that associates a positive and influential memory with the product or service.

Next time we will talk dollars and cents: $12 billion on consumer market research and $117 billion per year in marketing an actually product. Could all this be wasted?

Failure is Common

Happy Good Friday to everyone out there in Blog Land! On this Good Friday, we are going to talk about products failing, nice way to brighten your day huh?

Last time we brought up the fact that 80% of new product launches fail within the first 3 months.

In 2005, more than 156,000 products debuted in stores globally: one every 3 seconds- 75% of these failed.

Roughly 21,000 new brands are introduced worldwide per year-52% of these will fail.

Let's look back to 2001. A product was generating so much buzz that web-sites were offering that it would transform the

transportation industry. Apple CEO Steve Jobs, stated that cities would be built around it. John Doerr, venture capitalist, predicted $1 billion in sales. A factory in New England prepared to assemble 40,000 units a month, for this product, that didn't even have a name.

In December of 2001, the Segway Personal Transporter (PT for short) was released.

The First three were auctioned off for more than $100,000 a piece. And two years later: only 6,000 Segways had been sold.

You remember new coke?

It actually did well in consumer research, but once it hit the stores, it tanked...big time. Less than three months later, Peter Jennings interrupted regular programming to share the news that Coca-Cola was returning to it's original formula.

If we are going to pick on Coca-Cola, let's pick on Pepsi. In 1992, Crystal Pepsi was released, and I sure you all remember the Val Helen "Right Now" theme song.

Crystal Pepsi tanked so bad that Saturday Night created a spoof, which according to many, is in the top 20 of best SNL commercial spoofs


via videosift.com

One final flop comes from the Video Game world. After the huge success of E.T. the Extra-Terrestrial movie, Atari rushed to produce E.T. the Extra-Terrestrial (video game) for the Atari 2600 video game console in 1982. The game is often cited as of the largest commercial failures in video gaming history, as well as one of the worst video games released. E.T. the video game is often blamed as a contributing factor to Atari's massive losses during 1983 and 1984.

Overproduction, returns and unsold cartridges were buried in a New Mexico landfill.

Marketing professionals sometimes know little more than John Wanamaker did a century ago when he declared: "Half my advertising budget is wasted. Trouble is, I don't know which half"

Products and brands have become like flies, a buzz in the background being continuously batted by consumers.

Next blog we will talk about the solution It is called Neuromarketing. It is the marriage of marketing and science - the window into the human mind. It is helping to reveal why and what advertising messages are remembered and what messages are forgotten.