Tuesday, April 8th, 2014

The Usual

doughtrain According to a Wall Street Journal report on the latest Commerce Department statistics, the system is functioning normally:

U.S. corporate profits hit new highs last year, driven by the tight lid firms have kept on hiring and spending almost five years into the economic recovery.

A closely watched measure of after-tax corporate profits rose to $1.9 trillion in the final three months of the year, the Commerce Department said Thursday. Corporate profits stood at 11.1% of gross domestic product, up a bit from the prior quarter.

The latest uptick underscored a factor that has dogged the economy since it emerged from recession: Many companies are guarding their cash rather than putting it back into the economy in the form of new hiring.

The normalcy extends in all the usual directions, too.  According to Advertising Age, big business marketing also grows apace:

Why would major U.S. corporations keep a tight rein on almost all costs last year — except advertising?

By continuing their firm grip on hiring and spending, U.S. corporate profits reached new highs for 2013, The Wall Street Journal reported.

Advertising expenses, at least for the top 1,000 companies, was the exception. According to Kantar Media, the biggest marketers boosted spending 3.3%, while smaller advertisers cut ad budgets 6.6%.

What’s going on?

Maybe companies figured it was cheaper to spend money on advertising than to invest in research and development to try to stay one step ahead of the competition.

But that meant advertising’s job [even more] often was to divert attention from the product itself and toward emotional and purpose-driven benefits.

What’s going on? As one of the fake product differentiators says in its ads, it’s not complicated: Corporate capitalism is succeeding at serving its one and only purpose.

Share Button

Posted by Michael Dawson | Filed in Corporate Capitalism, Corporate Marketing 101 | Comment now »

Saturday, March 29th, 2014

Forbearance as Subsidy

Why doesn’t the IRS allow everybody to file their tax returns online for free? The answer, of course, is the same as in the case of the lack of regulation of cable and internet access: Forbearance from obvious and efficient public answers allows economic waste/corporate profit ranching. By keeping the IRS from running its own e-file system, the overclass is able to sell the simple software needed for that task at high, annually repeated prices.

Meanwhile, Leslie Savan, who advises BBM critics to “follow the flattery,” must be laughing herself silly watching the insipid, truth-concealing pitches of the resulting rip-offs:

Aside from the sickening spectacle of watching the self-same corporate oligopoly that lobbied to block simple reason flatter its victims for remaining ignorant of such basic realities, one has to ask: Why not just fill out the paper forms? TurboTax costs at least $50. A stamp is now 49¢.  How amazingly dumb is it to prefer the former to the latter?

Share Button

Posted by Michael Dawson | Filed in Bad Products, Commodification | 6 Comments »

Thursday, March 27th, 2014

How Irrelevance Serves Monopoly

In the United States, our overclass has used its ownership of politics to prevent serious regulation of communications infrastructure, to say nothing of public ownership. As a natural result, we get the highest prices and worst services in the supposedly developed world.

Of course, a small part of the gargantuan cash geysers the overclass reaps from such a sweetheart set-up is used in marketing the overpriced, inferior products underlying its profit ranches.

Having no rational product differences or genuine technological breakthroughs to describe, such marketing is always mere empty manipulation.

Consider this perhaps familiar example:

How, one might wonder, could such unfunny and ham-handed irrelevancies be profitable to AT&T? What’s the business rationale? Is AT&T stoned?

Turns out, as always, not in the least.

Per an Ad Age story titled “How Big Data Shapes AT&T’s Advertising Creative,” there’s rather rigorous method to the apparent superfluity:

It’s Not Complicated” may have been its name, but the insights that drove one of AT&T’s most successful ad campaigns ever were based on a massive three-year big-data project that was plenty complex.

The campaign featuring comedian Beck Bennett and little kids in a classroom was the product of a three-year project. It involved an analysis of 40 copy-test variables and tagging 370 AT&T and competitive wireless communications ads on everything from the type of humor used and how characters interact to type of storyline.

The BBDO-created campaign that resulted from the analysis generated an additional $50 million in sales in AT&T’s estimation, said Greg Pharo, director-market research and analysis for the telecom in a presentation at the Advertising Research Foundation’s Re:Think 2014 conference in New York today.

Here’s how that happens, per Ad Age‘s report:

Mr. Pharo and AT&T Senior Data Scientist Damon Samuel, who made the switch from working on the telecom company’s marketing-mix analytics team to working on the project, delved into sometimes surprising details about what works and what doesn’t in their ads and those of rivals. Among the lessons:

-Ads with storylines are very effective

-Informative demonstrations boost ad performance

-Simple outperforms complicated

-Slice-of-life and transactional or promotional ads can both work

-Humor is effective at driving recall, brand favorability and likeability, but not all types of humor are equal

-Character interaction matters a lot

Of course, some of those lessons have guided TV advertising since Mrs. Olsen was pouring coffee for Procter & Gamble Co. and Folgers in the 1960s. But AT&T’s analysis has helped delve deeper into exactly how elements work, particularly humor.

The team, along with its market-research shop Added Value, painstakingly code commercials for such things as the type of humor. And they found, according to Mr. Pharo, that ads featuring humor deemed clever, sarcastic or snarky tend to outperform ads with silly humor (though Mr. Samuel noted that ads with darkly sarcastic humor tend to underperform).

While ads with storylines do better generally, those with complex storylines, too many scenes or vignettes and complicated visual montages “underperformed very significantly,” Mr. Samuel said. “Thirty seconds is just not enough time to share all the story elements and come to a resolution.”

Particularly effective are ads with informative presentations when a character explains the benefits and presentation of a product, Mr. Pharo said.

While people demonstrating product benefits works, just showing phones and benefits, or what Mr. Samuel termed “phone porn,” doesn’t. At best, such primitive product demos drive a shift in the mix of handset types sold without increasing total sales.

The rewards for AT&T are substantial, Mr. Pharo said, with the project showing that 25% of AT&T’s total sales are driven by media advertising and 10% from TV alone. Creative quality and tonality rather than media weight or placement account for a third of TV ads’ impact.

Such are the building blocks of our market-totalitarian culture.

Share Button

Wednesday, March 12th, 2014

Another Subsidy

horses Ad Age has a column in which a figure named Benjamin Duchek, “the principal of Socialgence and a former Army artillery officer,” argues that the military radically under-charges its marketing partners for use of its brands and images. “Why,” wonders Duchek,

do the government and its marketers give troops away at a ridiculously low price to any sporting organization or beer company that wants to parade them as a prop for an event? In 2012, the National Football League donated $800,000 to three military-related non-profits as part of a Veterans Day Salute to Service. That amount is nothing but a rounding error on the billions that the league brings in throughout the year. Yet it gives the league carte blanche to integrate armed forces branding into its website, TV broadcasts and apparel.

Quite so. The military could almost certainly insist on a much better deal than that, and its restraint in not doing so is, as Duchek argues, a subsidy from the public sector to big business marketing endeavors.

Of course, what Duchek misses is that it’s equally true that the military probably gets back at least as much as it concedes. Soldiers are certainly exploited laborers, but radically under-charging for military marketing services is not without benefit to the Pentagon, which is, after all, the entity making the call. In return for the near-free use of the “our heroes” and “support our troops” brands/tropes, the military receives free exposure for these crucial ideologies among a huge, highly suggestible, and important audience. All of which makes the next Pentagon budget and the next war that much safer.

Of course, one of the major target audiences for all the soldier-worship is the next batch of grunts. Judging by the inability of ex-soldiers like Duchek to perceive the systemic nature of their situation and labors, the in-kind marketing symbiosis seems to be working rather well, despite the extreme puniness of the purported benefits to the little people.

Share Button

Monday, March 10th, 2014

Micro-Cosmos

science-equals-money So, to much fanfare, Neil DeGrasse Tyson is remaking Carl Sagan’s astronomy-and-a-bit-of-science TV show. Is television any way to learn science? Did Sagan’s Cosmos really turn anybody on who wasn’t already turned on, or about to be turned on? Is, as the Babysitter-in-Chief would have it, a passion for truth and bold thinking about new problems and limits really part of our national character at this point? Is it even tolerated, let alone promoted, by anybody in power?

Whatever your answers to these questions may be, ponder the more elementary fact that Tyson’s show is commercial, while Sagan’s was public. Hence, you have to wonder how much Tyson truly embodies his mentor’s spirit. Before giving up on PBS (not that it is anything like truly public), Tyson might have gone back and pondered the fact that Sagan fought an extended legal battle to prevent Apple from using his name to sell its products.

In any event, thanks to its commercialization, the first institutional task of the new Cosmos is greenwashing. In the coming weeks, we’ll discuss some of the details of what things like “the Chrysler Brand” gain from such campaigns. We’ll also keep notes on how the sponsors impose limits on what makes it into Tyson’s scripts. Don’t expect much fearless talk about the main tasks of science at this point in human history.

Share Button

Monday, March 3rd, 2014

Brand Provocation

Cadillac’s extra-obnoxious “Poolside” ad was, it now says, this:

The “Poolside” spot, created by ad agency Rogue, is intended to serve as a “brand provocation,” according to Craig Bierley, Cadillac’s advertising director.

Of course, the deeper story is the usual one. The ad is a piece of flattery designed to push the marginally comfortable into proving their upper-classiness by buying the $75,000 monstrosity it promotes.

Advertising Age interviewed Cadillac’s Mr. Bierley on the strong reaction to the spot. He said the spot’s been “misconstrued” by some viewers. He wanted to set the record straight. Among the misperceptions:

It’s aimed at the richest 1%

Not so, says Mr. Bierley. Rather than millionaires, the spot’s targeted at customers who make around $200,000 a year. They’re consumers with a “little bit of grit under their fingernails” who “pop in and out of luxury.”

Share Button

Posted by Michael Dawson | Filed in A Culture of..., Bad Products, Flattery | 23 Comments »