In the first of an irregular series of podcasts where we interview an assortment of highly creative, annoyingly successful and sometimes completely mad humans from across the marketing, media and advertising industries, we've set the bar pretty high: Bob Hoffman, AKA The Ad Contrarian.
As a long time fan of Bob Hoffman’s spiky musings on marketing, advertising and media, a little bit of wee came out when TVNZ announced it was bringing him over to speak as part of its Forecast series.
Hoffman, who has been the CEO of two independent advertising agencies and the US operation of Mojo, is the author of the popular Ad Contrarian blog and of several books, including 101 Contrarian Ideas About Advertising, which became Amazon’s #1 selling advertising book. Now he spends most of his time slaughtering sacred cows, questioning the conventional wisdom of the marketing industry and using the phrase ‘horseshit’.
And so, in the atrium of the newly renovated TVNZ building, the closest thing you could find to a marcomms whistleblower gave a presentation to a group of TVNZ staff, clients and friends of the family that focused on what he believes are three main fallacies: 1) digital advertising is not very effective, regularly fraudulent and it hasn’t killed traditional media as promised. 2) people don’t love brands and 3) targeting young people is stupid.
His goal was to make the audience uncomfortable through the power of facts, rather than through the biased expertise that regularly pushes a specific, often digital, agenda and prove that people who work in this industry are definitely not normal. Judging by some of the knowing glances as he spoke, he achieved his goal. And, not surprisingly, he got plenty of laughs along the way. StopPress was lucky enough to get a few minutes of his time the following day to explore some of his ideas. Here’s what we talked about:
Ben Fahy, publisher and editorial director: Thanks for coming to visit us here in New Zealand, Mr. Bob Hoffman, a.k.a. The Ad Contrarian.
Bob Hoffman: It's a great pleasure. I'm really enjoying myself here.
Well, it’s our combination of pride and self doubt in New Zealand that requires me to ask that question first. Are you enjoying yourself?
It's a lovely country and I'm loving the city of Auckland, and yeah, thank you for inviting me.
You say all the right things. You probably don't say all the right things to a marketing audience though.
No, I say some very pointed things, which is often polarising, and I have a lot of people who enjoy what I say and a lot of people who hate what I say.
The goal of your presentation last night here at TVNZ was to make people uncomfortable and offer some facts. The presentation's named Marketers Are From Mars, and Consumers Are From New Jersey. So how do you explain your hypothesis?
My hypothesis is that the marketing industry is very confused, and the advertising industry is very confused, and that we have been expecting a lot of things to happen for the last ten years or so that haven't actually happened, but we are progressing as if they had happened, and so that was the theme of my talk ... May I expand on that a little?
Some of the things that we were expecting to happen was TV was supposed to die, if you remember. Ten and 12 years ago we read all about that, and in fact, people are watching just as much TV as ever here in New Zealand. I think the number is about 85 percent of all video content is consumed on a television. Not exactly dead.
I think one of the lines was, it's not dead, it's having babies.
Yes. Yeah, that's from Thinkbox in the UK. And it's a wonderful line because it's so very true. The other thing we expected was that online advertising was going to be so much more effective than traditional advertising, and, in fact, it has not been so much more effective. I think the most startling fact about display advertising is that you get about seven clicks for every 10,000 ads you run. Not brilliantly effective. Another thing we have to acknowledge is that people hate online advertising. It is constantly interrupting us and annoying us, and, as a result, over 400 million people worldwide have installed ad-blocking software on their hand-held devices and laptops. The other thing I talked about was the obsession that the advertising and marketing industry has with young people. In fact, over in the States, over half of all consumer spending is done by people over 50, and people over 50 dominant almost all major consumer product categories, food, and automotive, and personal care, and home furnishings, and yet they're the target for only ten percent of marketing activity in the States.
If that's the case, and you've got some pretty compelling facts there and studies, are marketers perhaps irresponsible or stupid or scared, or a combination of all three.
Is that how you explain why the money keeps flowing into digital, and why old people aren't targeted?
It's not just digital. It's throughout the advertising and marketing and media continuum that this is happening, and it happened before the digital revolution, if you will. In the advertising world there are legends and rituals, and one of them is that you have to target young people, and I don't know why that is. There are very few facts to back it up that I can find, and there are plenty of facts to contradict it.
You mentioned people don't stick with the same brands throughout their lives.
No. People change brands, and according to Nielsen, baby boomers are just as likely to change brands as younger adults, but the legend and the ritual continues on, and it's been that way since I got into the advertising business 380 years ago.
I was listening to a podcast about Wilt Chamberlain, who was a very good basketball player, obviously, but a terrible free thrower. He started doing under-arm free throws and improved out of sight, but everyone laughed at him, and said, "Look at that, that's a foolish approach," and then he stopped doing it and he went back to being bad again, and so I think it's hard to fight against social currency and trendiness. Do you see the 'cult of the new' presiding over the marketing industry?
Absolutely. The advertising and marketing industries are dominated by young people. In the US the population of adults that is over 50, is 42 percent. In the advertising business the population over 50 is six percent, so the people who are controlling the advertising business, of course, most naturally understand and want to talk to people like them, and that's what's happening. Add to that the legendary importance of talking to young people in advertising, and you get what we have now.
Are you optimistic that …
No, obviously not, judging from your books. Skeptical, definitely. You've been shouting into the void a little bit for a few years, and questioning conventional wisdom, and I guess in hindsight it’s easy to do that. Asbestos: wonderful substance for a while, until it wasn't. Bloodletting: wonderful treatment until they figured that out. Do you think that marketers now are starting to question some of the conventional wisdom? You mentioned P&G recently moving away from precision targeting because it doesn't really work very well.
Yes. I think there are some smart marketers who are starting to question it, but the momentum is in the other direction. The momentum is toward more of the questionable practices, and I don't think all of a sudden things are going to stop and change and turn around. What I do expect is that the momentum toward the trendy, online, digital stuff is going to slow a little, but it's still going to grow. I don't think, you know, most marketers, when I started my blog, The Ad Contrarian, nine years ago, you know, I was out on a limb, I was an idiot, and-
Were you still in the agency world then?
I was still at my agency, yeah.
Because you mentioned that you wouldn't have been able to do that when you're within that scene. You're too scared, you'll potentially lose your job if you said some of the things you say.
Well, what happened was, I was CEO of the agency, so I couldn't lose my job unless I fired myself. It took me like seven years later to do that, but what happened was that my blog was so out of step with the thinking in the agency business that my partners insisted that I separate the blog from the agency, and even though my blog got more readers in an hour than the agency website got in a year, they wouldn't have me saying it. It was too dangerous. Now, I'm not that far out on a limb anymore. You know, I'm not that much of a contrarian there. There are people who are starting to come around to my way of thinking, but still, by far the majority of the marketing and agency people in the world are still headed in, what I think, is the wrong direction.
You mentioned yesterday the scientific method, which marketing often doesn't have. It doesn't have peer-reviewed studies, it doesn't have trials, but it does have trial and error, and digital media is pretty new. People are experimenting with new things, some of them don't work, some of them do. Do you feel as though that's still new enough to use that argument?
Well, here's what I think. We know what television can do, we know what radio can do, we know what print can do. We've had, in the case of television, what, 60 years of history, and we've had 100 years of history of radio, and hundreds of years of print media. We know what they can do, and online advertising, we don't know what it can do yet. We're not really sure. We have a lot experts with expert opinions on what it can do, but, just between us, they don't know shit.
What was the Richard Feynman quote?
Yeah, Richard Feynman said, "Science is the belief in the ignorance of experts," and so the experts are leading the charge, but they really don't know anything. We don't have enough history, we don't have enough background to really …
There's a long history of that in advertising.
Yes. There is. There's a long history of pseudo science and beliefs that turn out to be wrong. I think that's where we are now in the digital world. We're starting to say, ‘okay, all these experts told us this stuff, and it's turning out not to be the miracle that they promised, it's turning out not to be the magic that they promised’. But what is it? We're not really sure yet. We know that some things work better than other things, right? We know that, we called it all online advertising, but it's really five or six or ten very different kinds of things. Search is very different from display advertising, which is very different from social media, which is very different from content marketing, which is very different from native advertising, and all these things are different and they have different degrees of effectiveness.
Is it a misunderstanding between advertising and selling? Because I see a lot of the digital tools are quite good for demand fulfillment. I want this thing, I'll search for it. Whereas, advertising, and what you've talked about, is putting it in people's brains and the subconscious.
Yeah, what I say is that the purpose of traditional advertising is creating demand. That's what we've always done with television and radio and print advertising is try to create demand. Traditional advertising had this funny little cousin called the Yellow Pages. The Yellow Pages was not for creating demand but for fulfilling demand. Once you decided you wanted a pizza for dinner, then you went to the Yellow Pages to find out the phone number of the place. That's to my mind, so far, what the web has been very good at. The web is a much better Yellow Pages, particularly search, but it's a much worse television when it comes to creating demand, so it's very good at fulfilling demand. When I know I'm coming to New Zealand, when I decide I'm going to go to New Zealand, and the demand has been created, then I go to the web to find out what hotel I should stay at, and what airline I should fly in, and what I should do, so it's good at fulfilling demand, not great at creating demand, so far.
As far as personalisation goes, that's another big tool in the digital arsenal, saying that we can target certain people. Sometimes I feel like there's also a misunderstanding around how humans work, you know, you want to be part of a club. Is that also overstated, do you think? Facebook has got a pretty good pitch around, ‘we're mass media, and we're also targeted’.
Yes. Facebook is one of the great bait and switch artists of all time. Facebook started as a pure social medium, where you were going to post something on Facebook for nothing, and your friends would see it and they would repost it, and they would share it with their friends, and your brand would grow virally, and you wouldn't have to spend money on advertising anymore because of all this social sharing. Well that turned out to be ... Am I allowed to say a naughty word?
I believe the phrase is horseshit?
Yes. That turned out to be horseshit, and what Facebook is now is a traditional advertising seller. 85 percent of their revenue comes from selling traditional ads riding on a social media platform. Actually, I think Facebook is becoming a better advertising vehicle, because there used to be these little postage-stamp-size things on the side of the page. Now they have big fat ads right in the middle of the page that you can't miss.
That gets to your point about people don't love brands.
Right. The point is people were not going to be sharing about, "I love this pen, this is such a great pen."
It's a very nice pen.
Yeah, "you guys have to try it." It's bullshit. No one's ... Who cares? "My shampoo was so great." Get out of here. No one's going to do that, but if you put an ad right in the middle of the page, like traditional advertising has always done, maybe you're going to get some effectiveness.
I do quite enjoy the delicious irony of Google and Facebook being the biggest TV advertisers in the US and the UK. Also, Apple, the biggest company in the world, as you pointed out, doesn't really do much digital advertising. It creates a sense of bigness by using TV and print and outdoor, and many other brands follow that same pattern, but I do think online and digital media may be good for smaller brands. Is that something that you've seen?
My personal brand of The Ad Contrarian has been built on social media, so I'm not a social media denier, but I'm a social media realist, and you have to understand that every company, every organisation, every team, every poker game, every club in the world has a social media presence. There are literally billions of them, and it's very hard to break through on social media unless you are famous, unless you're an athlete or you're a movie star or you're a pop singer. People really don't care much about you. They don't care about ads and brands and you and me, so the idea that they are going to organically hook onto our social media and follow us, it just doesn't happen that way.
I think you mentioned the study from Europe around people wouldn't care if 92 percent of the brands in their lives disappeared tomorrow.
Yeah, it was a study by Havas Media, and it said that they studied US and Western Europe, and the people said they wouldn't care if 92 percent of the brands disappeared, which contradicts the theory of brand love, that people are in love with brands and want to share stories about brands, and want to be engaged with brands. It's simply not true. There are a few brands that we care deeply about.
It’s often category-specific, also. The toilet paper brand that I love and share stuff about. Often it gets to a point where it's so abstracted because they don't, as you pointed out, want to talk about their functional value.People need toilet paper but they might not love it.
Right. It's highly unlikely that you're going to share your enthusiasm for your toilet paper with your friends and family, but it's a fantasy that exists in the marketing world these days that's hard to kill because everyone wants to believe that their brand is so lovable and so important, and when you wake up in the morning, if you're a marketing person, your brand is the most important thing in the world to you. To the rest of the world it doesn't mean a damn thing mostly, but to you it's hard to put yourself on the outside looking in and seeing how little people really care about your brand. Now do we have brand preferences? Sure we do. I like this peanut butter versus that. That doesn't mean I love it, that doesn't mean I want to share stories about it, or hear branded storytelling about my peanut butter. It just doesn't work that way.
When you look at the ‘elephant in the snake’, the baby boomers coming through the economy, a huge chunk of very wealthy people, the wealthiest group in human history, you've said, and you contend that they're largely ignored. Does it make sense to target them, or do you need to be all things to all people to get as many people within that group of humans as you can?
Yeah, well, the idea of targeting and segmentation depends on what you're selling and who you're selling it to, obviously, but if you're a major brand, and for most major brands people over 50 are at least a substantial part, and in some cases a majority, of their users, of course you need to target them, of course you need to talk to them. It's silly to be buying 18-49 year old media segments when most of your customers are not in that target. In what universe does that make sense, where most of your customers are people you're not targeting? …
In the US, people over 50 have 70 percent of the wealth. They are the target for ten percent of all advertising. They dominate so many categories, food, entertainment, home furnishings, automotive, they dominate those categories, and yet the advertising is targeted at other people.
Do you need to speak to them in a different way?
The one thing you've mentioned is the very important distinction between old people wanting to be young, but they actually want to feel youthful. Can you explain that?
Yes. The myth is that people over 50 want to be like young people. That is not true. People over 50 want to be youthful, but they don't want to be like young people. It's a big difference. I'm over 50, I don't want to be like Justin Bieber, but I do have an idea of what youthful is. It's not that. There are two aspects of targeting people over 50. One is the creative aspect and one is the media aspect. Now we can argue over the creative aspect of what the imagery should be and how youthful it should get and how young it should get, but I don't see how we can argue over the media aspect. Even if, let's say, people over 50 want to be like Justin Bieber, why would you show the advertising to people under 50 when you're trying to influence people over 50. It doesn't make any sense.
In our stable of magazines and websites at Tangible we've got a range to go through from New Zealand Weddings at the start of that, Little Treasures, a baby magazine, for the next phase, Good Magazine, which is for the nesters, but we're really missing out on that last bit, so I’m proposing Death and Dying magazine for the old folks, if you want to partner up, I think that would be …
Yeah, I'm in.
Count me in.
Good. I know there are many things that annoy you.
Maybe to finish, is there anything in particular that annoys you most?
Yes. There are two things that particularly annoy me the most. Number one is the consolidation of the advertising industry into these huge corporate entities. I don't like it, I don't think it's good for anyone, I don't think it's good for the clients, I don't think it's good for the industry. Maybe it's good for the shareholders, but no one else. The other thing that really annoys me is the obsession with media versus creativity in advertising. We have become totally obsessed with the delivery systems rather than the quality of what we are delivering. I think those are the two big things that bother me the most.
Thank you, Bob. Much appreciated. Look forward to reading more of your wise words.
Thank you, Ben. I appreciate it. It's been great to be there.
See you next year.
Thank you. I hope so.