Gray Matters: A time for giving, the grey dollar, reputation, digital advertising, young people and Facebook, and wasted ad spend

  • Voices
  • December 13, 2018
  • StopPress Team
Gray Matters: A time for giving, the grey dollar, reputation, digital advertising, young people and Facebook, and wasted ad spend

Copy That

Christmas is a time for giving. Some gifts are given with love, some out of obligation and some to further a relationship. The latter is certainly the case for media commentators like me who may have the opportunity to view a brand, agency or company and write about it or them in positive terms.

Some such gifts are perfunctory – a bottle of wine and a misspelt name – those are the obligation ones reeking of hope and lack of commitment.

Then there are the ones that strike a chord: a) “Hey, someone has really put some effort into this” b) “Wow, they think about me” c) “This is something special” d) These guys are clever bastards!”

The bottle of vodka from Barnes Catmur & Friends Dentsu falls into this category. Not because I drink vodka, which I don’t, but because of the clever messaging. This was no mere bottle of vodka. This was Post-Truth Vodka, complete with well written and amusing copy: “Like truth, distilling can be a tedious yet worthwhile process.”

Of course, Post-Truth Vodka isn’t really vodka, it’s “white rum from the Dancing Sands Distillery in Nelson”. Now that I do drink! “And that’s the truth, which is rare these days”.

There’s much more good copy on the label but I won’t bore you with that – you’ll have to find your own bottle. Suffice it to say it reinforced my view that Paul and his merry band of copy writers are a class act and, selfishly, so nice to know I am remembered by an agency I respect.

Like bribes, Christmas gifts work, but only if they are on brand.

The Grey Dollar

Talking about Christmas gifts, a StopPress solus EDM from Grown-Ups alerted me to its Christmas Survey and some interesting statistics about the gift-giving habits of those over 50. The 50+ demographic represents over a third of the New Zealand population and controls over 65 percent of disposable income.

Believe it or not, 80 percent of them buy online, and more to the point, they spend 16 percent more than the general population at Christmas. 23 percent of them spend $500 or more on Christmas presents, worth a massive $1.5 million.

I wrote about the Baby Boomer market in an earlier Gray Matters, so I don’t want to belabour the point, but there’s a good piece written about it in the Australian Marketing by Amanda Taylor, which asks the question: Why are marketers still neglecting Baby Boomers?

Reputational Damage

It is so easy to damage your reputation even in the act of trying to avoid reputational damage. Such was the recent case of law-firm Simpson Grierson being overly cautious and photoshopping out the champagne glasses from the hands of the firm’s 2018 graduates who had recently been admitted to the bar. The story had been floating around social media for a few days when Newsroom picked it up and ran a rather scathing piece.

As a MasterCard ad might say: Graduating – worth every penny. Admitted to the bar – worth a fortune. Photoshopping champagne glasses out of the celebratory photo – Priceless!

“The way to avoid damage to your reputation is not to cover up that people have been issued a glass of champagne," Barrister Catriona MacLennan commented in Laura Walter’s article. It was Newsroom that broke the Russell McVeagh sexual harassment story, which has put law firms on edge and overly cautious.

In August, Insights Unboxed ran a feature Understanding and Mitigating Reputational Risk, in which they quoted a Harvard Business Review (HBR) article, published in 2017 by authors Robert G. Eccles, Scott C. Newquist and Roland Schatz, who posit that “70 percent to 80 percent of market value comes from hard-to-assess intangible assets such as brand equity, intellectual capital, and goodwill”.

Locally PRINZ ran a workshop in Christchurch in 2017, which featured a presentation by Dr Chris Galloway, PRINZ, senior lecturer, School of Communication, Journalism and Marketing at Massey University.

Not a lot has happened with PRINZ since, but Senateshj’s chief executive, Neil Green, does share an annual Reputation Reality trans-Tasman survey, which investigates reputation management trends and issues.

The 2018/19 survey will highlight the existing and emerging triggers for reputational risk. It will also look at key drivers of reputation, differences between Australia and New Zealand, the nature and type of investment being made to protect and enhance corporate reputation, and who the public is most likely to trust in a crisis.

The 2017 survey highlighted that, “the rise of social media and activism have changed the rules, and leaders need to move fast to protect reputations at risk. They know this but are failing to prepare. In Australasia, only 40 percent feel confident managing social and digital media in the event of a crisis.”

One gets the feeling that the risks of reputational damage to firms, brands and individuals is greater than it ever was, but most companies seem to be operating by reflex in the dark. The Simpson Grierson example should stand as a warning to us all. Like the boy scouts – Be Prepared!

Face Off

The Australian Competition and Consumer Commission (ACCC) has released its preliminary report into Google, Facebook and Australian news and advertising. As reported in Business Insider, The ACCC estimates that for a typical $100 spent by advertisers on digital advertising (excluding classifieds) $47 goes to Google (some of which is for the provision of intermediary services) $21 goes to Facebook, and $32 goes to all other websites. So, in effect, in the past three years, Google and Facebook have captured more than 80 percent of all growth in digital advertising.

Here in New Zealand, IABNZ released its Internet Advertising Revenue Report for Q3 2018 in November, which showed total interactive revenue reaching $266 million for the quarter representing 13 percent year-on-year growth. Interactive advertising is advertising viewed on a desktop PC, laptop or mobile device and accessed via an internet connection, 3G, 4G or WIFI.

We can assume that like in Australia, Google and Facebook will have captured more than 80 percent of all that growth in digital advertising.

MPP Global put the dilemma succinctly when it stated earlier this year: “Google and Facebook have put the ad game on life support.” In the article by Ana Lobb, she explains that the duopoly controls 60 percent of a market worth $83 billion in the U.S. and $25 billion across Europe. Together, they swallow up around 75 percent of all new online ad spending.

Lobb’s conclusion stands as a stark warning to local advertisers and the media: “It’s increasingly apparent that digital revenue from subscriptions and paid content can, and will, replace traditional advertising revenue."

In light of Marketing Week’s contention that “marketers continue to waste money, as only nine percent of digital are viewed for more than a second,” perhaps our obsession with all things digital is misplaced and we should be considering a return of advertising funds to more traditional forms of advertising. What with ad blocking and lack of attention, a great deal of digital advertising seems not only to be going to waste but is also destroying the local advertising, publishing and media industries.

The dilemma is figuring out how much you would you pay to read lots of stories without having to look at many ads?  

Tony Haile, the former CEO of Chartbeat, makes very convincing arguments on Recodeabout the limits of the advertising business for publishers in a world dominated by Facebook and Google. Haile proposes the creation of a subscription service that gives readers an ad-free, or nearly ad-free, reading experience for stories from a wide variety of publishers.

I’m not sure if that’s realistic in the current New Zealand environment. Anyone care to comment?

Over and Out

In a related trend, a recent study shows that young people are moving away from Facebook. In fact, 44 percent of Americans 18-27 years have deleted the Facebook app this year. The study by Pew Research was conducted from 29 May to 11 June. This follows a loss of 2.8 million U.S. users in 2017.

Waste Not

In my discussions about wasted spend on advertising, my attention was drawn to a 14-year-old study published in the Journal of Advertising Research which shows that, “waste – the perceived extravagance of an advertisement – contributes to advertising effectiveness by increasing credibility". It draws especially on the ‘Handicap Principle’ in biology: animals use wasteful characteristics to signal their exceptional biological fitness.   

“It hypothesizes that excesses in advertising work in a similar way by signalling ‘brand fitness.’ TV advertisements were evaluated online for perceived advertising expense, message, brand familiarity, quality, reliability, and likelihood of choosing. High perceived advertising expense enhances an advertisement's persuasiveness significantly, but largely indirectly, by strengthening perceptions of brand quality.”

I guess both halves do work after all.

Afterthought

While the Brits face up to a cold winter and the Brexit fallout, at least they appear to be keeping their sense of humour. With the advertising community raving about the John Lewis Christmas 2018 ad telling the story of Elton John’s first piano, the parody ads flew thick and fast. Thanks to The Drum for identifying these.

Happy Christmas everyone! Gray Matters will be back in the New Year.

Graham Medcalf​

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Is consolidation the way of the future?

  • Advertising
  • January 18, 2019
  • Caitlin Salter
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The tail end of 2018 brought with it some major announcements between media companies and the booming out-of-home market. Nearly two months since NZME and Go Media enacted their partnership and MediaWorks and QMS Media announced their proposed merger, we have a chat with media agencies to see whether the latest developments are a sign of things to come.

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