Conference Calls Unlimited CEO Zane Saffrit, whose blog is on my watchlist (and Heart of Business has been a happy customer of theirs for years, by the way), was talking about dogfood today. Woof.
Actually, the point he was making was one pointed out in a Sinek Partners’ blog about advertisers and advertising. The basic question is this:
Why don’t advertising agencies advertise?
A quote from Sinek Partner’s original blog post:
According to Nielsen Monitor-Plus, the four holding companies spent a total of $3.7 million to promote themselves in the U.S. in 2005, down 15% from the $4.4 million they spent in 2004.
Considering that agencies recommend their clients spend 10% of their revenues on marketing, the big four are spending .01% of their combined $29.3 billion in global revenue. Mull that for a second or two.
Hmmmm… good question. Ad agencies are hot-to-trot to get you to spend your limited budget on advertising, but does it really work? And, if it did, you’d expect the ad agencies themselves to be taking advantage of all of their in-house talent to do their own ad campaigns. But they don’t. When was the last time you saw an ad for an ad agency?
I teach about websites and internet marketing, and I do that. I teach about the sales conversation, and I practice what I preach.
The lack of advertising coming from ad agencies points to a larger phenomenon: The world is reverting to its preferred mode of two-way communication. A big jump in technology at the beginning of last century brought about a lot of one-way communication devices: radio and television to be precise. And, in the coupla centuries previous, newspapers also made their impact as a one-way communication device.
Before that, communication was, by nature, two-way. Whoever was giving you information kinda had to be in front of you and you could respond. Thankfully, technology has continued forward to the point where our communication is, once-again, two-way.
Advertisers are selling advertising because they need to make a living, instead of making the heroic choice to shut down and go do something else. I did write an article about how to use advertising without wasting your money. I won’t say advertising is completely useless. But, you have to understand the limitations of advertising, and how and when to use it if it’s going to be at all effective for you.
So here’s my question: how have you used advertising? When has it been effective for you? When not?
6 Responses
I spent way too much money advertising in a local parenting magazine. I know this magazine gets read. I read it faithfully and know others who do too, but there are so many ads that it is really hard to stand out even with a very focused niche.
I got a few subscribers to my newsletter and a few calls, but it didn’t work the way I expected. I realize now, thanks to you, my expectations were out of line. Completely.
No I didn’t have anyone call from that ad and make an appointment. I did get subscribers and eventually one of them may do just that, but only after I have sent them X numbers of newsletters.
I think there are more effective ways to get new subscribers than with an ad, so I’m focusing my efforts there now to get the word out.
Thanks for all you do Mark!
The observation that advertising agencies don’t advertise is mind-boggling. (!!) Like you, Mark, I can’t imagine recommending something I wouldn’t do myself.
I’ve been in business for almost 2 years and I haven’t spent a dime on advertising. Not one.
All of my clients have come to me through someone else – which is delightful and invigorating. Plus, there’s an immediate connection and… trust – that can’t be created any other way.
– Jennifer
Imagine our world without advertising!
No political ads –> it needn’t cost millions to get elected –> real people with hearts bigger than their bank accounts have a chance to become leaders (not just elected office-holders) who will actually make a difference.
No pharmaceutical ads –> drug companies have far more money to spend on research & development and drugs cost much much much less –> health care and health insurance once again become affordable –> fewer bankruptcies and more people getting appropriate health care and Medicare can stop going broke –> better lives for all of us.
Ahhh…. once can dream, right?
Karen– I know, your experience is all too common, unfortunately… but I’m glad that it wasn’t completely disastrous! And, we’re all learning- I’ve had the some poor results from other marketing experiments I’ve tried. You are so welcome!
Jennifer It is mind-boggling, isn’t it? We haven’t spent any money on advertising either… yet. But, we’re contemplating some pay-per-click google adwords advertising in the coming year. We’ll see how it goes.
Anne – wouldn’t that be amazing?! 🙂
Hi Mark,
Ads for service-based businesses have been demonstrated to not deliver a return on investment. So, advertisers–like most of us–don’t really need to advertise. A better use of their resources–and ours–is, as you suggest, relationship-based marketing. Which is why the smarter ad agencies are marketing themselves & their clients with blogs, interactive websites, e-mail newsletters, and other campaigns. A lot of agencies are now calling themselves “interactive agencies.” Or “marketing agencies.” I think ads still work in the business to consumer space for products, as a part of the larger marketing pie. Ads work for large companies the way those shorts that look like underwear work for Olympic sprinters. At that level, everything helps you beat the competition. But for most of us it’s completely unnecessary. Networking & thought leadership (blogging, speaking, etc.) are way more effective for most of us.
@ Kelly: That’s a great point, Kelly- thanks for bringing up the difference.
However, I would even challenge what you wrote, just a touch- for instance, my parents run a retail store, and religiously for years they ran an ad in the Washington Post, which people saw, and brought in- and so it was effective… somewhat.
But, when they switched over to the methods you and I agree with, they found it more effective on a bunch of levels. And, they’ve abandoned advertising completely.
The results? Increased profitability, no loss in sales.
Do you have any stories from typical b-to-c businesses that have abandoned advertising for other forms of marketing, not service businesses, and continued to do well regardless?