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.

AT&T = Market-Totalitarian Spyware

eye spy Walter Brasch said it well: “The government’s knowledge of the lives of individuals is little more than the equivalent to a children’s coloring book compared to the library that private companies have on everyone.”

Today, AT&T — the corporation that employs unfunny, phony kindergartners acting scriptedly silly to make the radically false claim that its services are somehow better than those of its fellow bloated, crappy, vastly overpriced, marketing-intensive capitalist telecom oligopolies — admitted it is plunging fully into the private spying game. Per Engadget:

In an update on its Public Policy Blog, AT&T disclosed that it may [TCT ed: “may” — ROFL!] begin selling anonymous user data to retailers and marketers, with the end goal being “to deliver more relevant advertising to… customers.” The carrier is far from the first to sell aggregate information — here’s looking at you, Verizon — but the provider is unique in combining data on TV, WiFi and wireless usage. The company said it could also provide aggregate info about users’ app usage and U-Verse info.

Also notable in the new privacy policy: AT&T notes that it could sell information about individual users, with the stipulation that the data would still be kept anonymous, and media research companies would only be able to use that info in aggregate reports. While this is hardly a case of AT&T pushing new privacy boundaries, users can opt out of the program.

For any souls unlucky enough — ala your faithful TCT editor — to labor under this particular profit fief, here is the home for opting out.

(Behold the difficulty of many of the “available” opt-outs!)

The Fruits of Private Taxation

boondoggle Structurally and historically, big business marketing is a substitute for unrestrained, Adam-Smithian price competition, which capitalists have always hated and moved to suppress. By co-respectively avoiding price war and competing instead via marketing, big businesses essentially gain a power their own dogma denies they seek or have: the power to levy private taxes.

And big business marketing is precisely this: an activity funded by a tax levied by corporate shareholders upon those who comprise their targets, the sea of prospective buyers. The funds expended on big business marketing come from the marked-up prices of purchased corporate products. As I explained in The Consumer Trap book, in the aggregate, big business marketing is an activity that rivals total public government spending in scale.

The wastefulness of the spending this private tax embodies dwarfs most government programs.

Take the case of cellular telephone marketing in the USA, a topic we here at TCT have discussed before. Here you have an industry that is not only a natural monopoly (and therefore inherently easily run by the public), but one in which the private corporations who control it provide entirely unremarkable service at the world’s highest prices.

I’ve long been fascinated by the fact that, not only does saturation-level advertising accompany and largely cause this pointless (except to shareholders, of course) economic disaster, but the advertising in question, in the guise of “humor,” almost always depicts reasons not to use or “upgrade” cellular telephones!

Consider this particular ad, currently in heavy rotation on U.S. television, from AT&T:

Not only does this scene depict unattractive and shallow people using cell phones for a patently moronic and pointless activity within a setting — a moving automobile — that makes the depicted activity deadly, but what is the proffered benefit being suggested by the ad? To be five seconds ahead of your friends in receiving trivia. And the presentation? A threat: “Don’t be left behind!”

Our grandchildren will look back in horror that such were the priorities of our society and the nature of our “rethinking the possible” in the early 21st century. Should we somehow manage to dethrone our massively decrepit and shameless corporate overclass and pass future generations a world still capable to looking back, our “entrepreneurial” masters will be compared to Nero and Caligula.