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Wednesday, November 22, 2017

The Fall of Advertising and the Rise of PR
by Al Ries & Laura Ries. New York: HarperCollins, 2002.

(page xi)
"You can't launch a new brand with advertising because advertising has no credibility. It's the self-serving voice of a company anxious to make a sale…PR has credibility. Advertising does not."

(page xvi)
"You can't build a brand if you can't win the battle for the mind. The weak link is advertising. Advertising has lost its power to put a new brand name into the mind. Advertising has no credibility with consumers, who are increasingly skeptical of its claims and whenever possible are inclined to reject is messages."

(page xvii)
"We're beginning to see research that supports the superiority of PR over advertising to launch a brand. A recent study of ninety-one new-product launches shows that highly successful products are more likely to us PR-related activities than less successful ones. Commissioned by Schneider & Associates in collaboration with Boston University's Communications Research Center and Susan Fournier, an associate professor of marketing at the Harvard Business School, the study is believed to be the first of its kind.

'We learned that the role of PR, while underutilized, was extremely significant when leveraged,' said the study."

(page xix)
"Advertising Lacks Credibility"

(page xx)
"War and marketing have many similarities. Military generals who fight today's war with last war's weapons are no different from marketing generals who fight today's marketing war with advertising…"

(page 5)
"A recent survey of eighteen hundred business executives by the American Advertising Federation (AAF) shows that public relations is more highly regarded than advertising. The executives were asked which departments were most important to their company's success. Here are the results:


	Product Development			29 percent
	Strategic Planning			27 percent
	Public Relations 			16 percent
	Research & development			14 percent
	Financial Strategies			14 percent
	Advertising				10 percent
	Legal					3 percent

Only the legal department ranked lower than advertising in the AAF survey. Advertising might account for a substantial share of a company's budget, but I the eyes of management its stature has been seriously eroded.

So what did the AAF do to counter the low score the advertising department received? They did what many companies do when they find themselves in trouble. They launched an advertising campaign to improve advertising's perceptions in the business community. Theme: 'Advertising. The way great brands get to be great brands.'

But if you believe that product development, strategic planning, public relations, research and development, and financial strategies are more important than advertising to a company's success (and that is what the survey shows), then why would you believe an advertisement that boldly states, 'Advertising is the way great brands get to be great brands?'

It's a classic case of cognitive dissonance. You can't hold advertising in low esteem and also believe an ad that says advertising builds great brands.

The weakest link in any advertising program is its credibility. An advertising message has little believability with the average person."

(page 10)
"As advertising volume has increased, advertising message have become wallpaper. Advertisements surround us from early in the morning to late at night. It's not only the volume of advertising that works against its effectiveness, it's also the number of different messages the average individual is exposed to. The New York-based market research firm CRM, for example, now tracks advertising expenditures for nine hundred thousand different brands.

As a result of the volume and the variety, we tend to tune all advertising messages out. Only when an ad is unusual do we pay any attention to it at all.

In general, advertising is something you have trained yourself to avoid. If you read all the ads, you wouldn't have time to do anything else."

(page 11)
"Even more important, the average consumer feels that the information presented in advertisements is one-sided. It doesn't tell the whole story, it doesn't present alternatives, and it is often misleading. No wonder advertising practitioners are only one step above car salesmen.

Years ago when there was little or no advertising, any advertising was effective. Ads were widely read and discussed. People looked forward to reading the four-color ads in Life magazine or watching the commercials on Texaco Star Theater.

But you can't live in the past. Advertising is no longer fresh and exciting. There's just too much of it."

(page 52)
"The Chevrolet Story

For a number of years, the largest advertised brand in America was Chevrolet. Last year, General Motors spent $819,200,000 advertising its Chevrolet brand, 67 percent of that on television.

What did General Motors get for its $819 million? Is Chevrolet the largest-selling automobile brand/ No, it's not. Ford is. Is Chevrolet the largest-selling truck brand? No, it's not. Ford is.

As a matter of fact, General Motors spent 39 percent more advertising its Chevrolet brand than Ford Motor Company did advertising its Ford brand. Yet Ford outsells Chevrolet by 33 percent.

Well, you might be thinking, the folks at Chevrolet wouldn't be spending that money if the advertising program wasn't working. (And our government wouldn't be spending $20 billion a year on farm subsidies either if that program wasn't working.)

This is not a one-year phenomenon. For five years in a row Chevrolet has been out-advertising and under-selling Ford.

Five years ago, Ford sold 28 percent more vehicles than Chevrolet. Then the Chevrolet advertising blitz began. In five year, Chevrolet spent $3.4 billion on advertising compared to $2.9 billion for Ford.

Jus because you out-advertise your competition doesn't mean you are going to outsell them. Today Ford has increased its lead of Chevrolet from 28 percent to 33 percent.

An even more striking comparison is in the cost of advertising per vehicle sold. In the current year Chevrolet is spending $314 per vehicle sold compared to $179 for Ford."

(page 53-55)
"Forget individual brands such as AT&T and Chevrolet. Look at General Motors as a whole. In 1994, Ronald Zarrella joined GM from Bausch & Lomb as its marketing chief. His mandate: bring the discipline of brand management to the world's largest corporation.

General Motor's new marketing chief, according to USA Today, was going to smash to bits the old auto industry belief that 'product is king.' Ron Zarrella said that GM's future depended as much on good marketing as good products: 'There's a belief in this industry that product is everything - and it's not.'

True to his brand-management roots, one of the first things that Mr. Zarrella did was to turn up the advertising turbocharger.


In 1995, General Motors was the third-largest advertiser in America, spending $2.1 billion.
In 1996, General Motors was the second-largest advertiser in America, spending $2.4 billion.
In 1997, General Motors was the largest advertiser in America, spending $3.1 billion.
In 1998, 1999, and 2000, General Motors was again the largest advertiser in America,
spending $3.0 billion, $4.1 billion, and $3.0 billion, respectively.

So what did General Motors get for all this money?

In 1995, General Motors' market share dropped from 34.0 percent to 33.9 percent.
In 1996, General Motors' market share dropped to 32.3 percent.
In 1997, General Motors' market share dropped to 32.1 percent.
In 1998, General Motors' market share dropped to 30.0 percent.
In 1999, General Motors' market share dropped to 29.6 percent.
In 2000, General Motors' market share dropped to 28.1 percent.

By the time Ron Zarrella left GM in 2001 and returned to Bausch & Lomb, his thinking had come full circle. 'Product is everything in this business,' he said.

It's strange. Advertising is not everything and product is not everything, but there is one thing that is everything. And most managers seem to miss it.

Perception is everything. The only question is how to create a favorable perception in the consumer's mind. And advertising has racked up a poor track record in this respect."

(page 59)
"In many ways, advertising is a lose/lose game. If your slogan is meaningless (as most slogans are), it doesn't help the brand. If your slogan is meaningful, it isn't believed by the prospect.

This is advertising's Achilles' heel. Just because you say something meaningful and motivating in an advertisement doesn't necessarily mean the prospect will believe what you say."

(page 64)
"Putting big bucks behind a weak name is a deadly combination. It will work only when you have a monopoly. Where there is real competition, you need the most appropriate name you can find and then you need to conserve your advertising resources until you can establish your credibility."

(page 70)
"What's the size of the market? That's not the best question to start with when you're looking for a new category to be first in.

The question to start with is, what new category can we create? Does that new category have any publicity value? And what angle can we use to motivate prospects to prefer this new category?

The problem with appealing to an existing market is that the market is already taken. The cola market, the beer market, the vodka market, are all enormous markets, but they are already claimed by such brands as Coca-Cola, Budweiser, and Smirnoff.

When you do find a new category to be first in and a powerful motivating factor, you can be sure that the advertising crowd is going to show up and offer to help. That's when you have to keep advertising's key liability clearly in mind."

(page 85)
"Why are so many advertisers looking for alternative media? The simple fact is that traditional advertising isn't working very well. If it were, you wouldn't see blimp, beach, bathroom, or book advertising.

It's not enough to have a better product or service. It's not enough to have a better price. To be successful today you need to create a better brand. And what is a brand? A brand is a perception in the prospect's mind."

There Is a Better Alternative

And that better alternative is publicity or, as its practitioners like to call it, PR, or public relations.

Whatever you call the function (publicity, PR, or public relations), the objective is the same. Tell your story indirectly through third-party outlets, primarily the media.

There are many disadvantages to PR. You can't control the content, you can't control the timing, and you can't control the visual appearance of your message. You can't even be sure that any of your messages will be delivered.

But the one advantage of PR makes up for all of its disadvantages. PR has credibility, advertising does not. People believe what they read in newspapers or magazines or what they hear on radio or see on television.

Customers are cynical, suspicious, and cautious. As the volume of advertising escalates, they are turning to independent, third-party, authoritative sources for recommendations and advice. Friends, relatives, neighbors, and of course, the media in all of its diversity.

Seldom do they check the ads."

(Chapter 10, page 89)
"The Power of a Third Party

"All I know," said Will Rogers, "is just what I read in the papers." It's true. Most people only 'know' what they read, see, or hear in the media or what they learn from people they trust.

Life is complicated. Who has the time to independently check the quality or features of the wide variety of products and services that one might want to purchase? We let ourselves be led around by the media.

Who makes the 'best' automobiles? Ask the average person this question and you'll often get the answer Mercedes-Benz. Then ask, Do you own one? No. Have you ever driven one? No. Do you know anyone who owns one? No.

Then how do you know who makes the best automobiles? You have to be a humorist like Will Rogers or jerry Seinfeld to admit the obvious. 'All I know is just what I read in the papers.'"

(page 90)
"Regis McKenna, the well-known marketing consultant, writing in the Harvard Business review more than a decade ago, put it this way: 'We are witnessing the obsolescence of advertising…First, advertising overkill has started to ricochet back on advertising itself…The second development in advertising's decline is an outgrowth of the first: as advertising has proliferated and become more obnoxiously insistent, consumers have gotten fed up. The more advertising seeks to intrude, the more people try to shut it out."

(page 92)
It's ironic that America's advertising agencies, the 'advertising builds brands' crowd, do almost no advertising themselves. Rather they depend heavily on PR to build their own brands. The deluge the trade press, especially Advertising Age and Adweek, with samples of their work. No award, no matter how trivial, goes uncrowed.

We looked through five consecutive issues of Advertising Age, and except for a few classified help-wanted ads, we couldn't find a single advertisement from an advertising agency.

'Do as I say, not as I do' seems to be the motto of the agency establishment. They sell advertising to others, but they don't buy any advertising for themselves.

How can you believe in advertising for others if you don't believe in advertising for yourself?

(page 111)
"Up till now, unfortunately, we have been unable to get the media on our side. For eight ears we have been trying to place an article on divergence, with little success. So we keep trying different approaches, and sooner or later we are going to succeed.

The longer the gestation process, the bigger the story. An elephant takes two years to be born."

(page 129)
"One of the best ways to establish your leadership credentials is by being the first brand in a new category

The new category doesn't have to be earth-shattering either. PowerBar was the first energy bar. Heineken was the first high-priced imported beer. Razor was the first high-tech scooter.

When your brand represents a new category that captures the attention in the media, the publicity fallout can be incredible. When Polaroid introduced instant photography, Dr. Land and his new camera made the cover of Time magazine, the news shows on network television, and virtually every other important publicity medium. Literally, the publicity made the Polaroid brand."

(page 143)
"You can't build a brand with advertising, which has as much credibility as a message inside a fortune cookie."

(page 153)
"If you have the right strategy, you can make a lot of tactical errors and still be successful. If you have the wrong strategy, you can be a tactical genius and still be a failure."

(page 175)
"Selecting the right name is the most important marketing decision you make. The right name leads to favorable publicity and favorable consumer perceptions.

The wrong name leads you on the path to nowhere."

(page 180)
"The advertising business is going down the drain," said David Ogilvy. "It is being pulled down by the people who create it, who don't know how to sell anything, who have never sold anything in their lives…who despise selling, whose mission in life is to be clever show-offs, and con clients into giving them money to display their originality and genius."

(page 191)
"Liars, when they speak the truth," said Aristotle, "are not believed."

(page 206)
"More than forty years ago, famed researcher Alfred Politz pointed out the pitfalls when clients demand creative advertising. In an article entitled 'The Dilemma of Creative Advertising,' Politz writes, 'It is unfortunate, but not surprising, that the creative man now diverts his efforts from making the product interesting to making the advertising interesting. Ultimately he is no longer selling the product to the consumer, but selling the advertising to his client.

As long as agencies are selling advertising to clients, instead of products to consumers, the pressure will be on for 'creative advertising.' It has to be new, it has to be different, and it has to be original. Exactly those attributes that divorce advertising from the product itself.

What needs to be new, different, and original is the product, not the advertising.

Actually, we'll take that back. What needs to be new, different, and original is the perception of the product.

If an emphasis on creativity is the biggest advertising mistake you can make, the second-biggest advertising mistake you can make is looking for an ROAI, or return on advertising investment.

The days are long gone when you could spend a million dollars on advertising and increase your profits by a million dollars in the same year. Yet some advertising advocates believe in the ROAI approach. However, they look at advertising as an investment that will pay off sometime in the future, rather than during the current year. If we spend a million this year, it might pay off in the next five years or so.

No matter how many times you spin the numbers, it's hard to prove the ROAI theory. Advertising does not generally pay for itself. These days, most advertising agencies rely more on the 'belief' approach. If you believe in advertising, then you should support a substantial advertising budget. Heaven help you in corporate America today if you are an advertising infidel.

I our scheme of things, advertising is not an investment that is likely to pay dividends. Advertising is insurance. That is, advertising protects a brand from competitive attacks. Advertising is the price you pay to maintain your brand's position in the mind. Brand maintenance rather than brand building.

If advertising is insurance, what's the ROI of insurance? If you spent $1,000 on life insurance this year, what did you get for your money? Nothing, of course, unless you died. Insurance is an accepted business expense even though it doesn't pay back dividends. Why not advertising?"

(page 239)
"You can't force your way into the prospect's mind. Advertising is perceived as an imposition, an unwelcome intruder who needs to be resisted. The harder the sell, the harder the wind blows, the harder the prospect resists the sales message.

Advertising people talk about impact. Spreads, inserts, foldouts, and full color in print ads. Frenetic action, crazy angles, and jump cuts in television commercials. Turning up the volume in radio spots. But these are exactly the attributes that say to a prospect, don't pay any attention to me, I'm an advertisement.

The harder an advertisement tries to force its way into the mind, the less likely it will accomplish its objective. Once in a while a prospect drops his or her guard and the wind will win. But not often.

(page 240)
"Nor does the prospect perceive any force in an editorial message. It's the opposite. Prospects think that media are trying to be helpful by alerting them to a wonderful new product or service."

(page 247)
"Many advertising programs are mathematical successes and marketing failures. The client might be reaching everybody he or she wants to reach with enough frequency o create boredom and still not move the merchandise. You can't motivate a purchase if the message lacks credibility."

(page 245)
"Words have little credibility in an advertisement. The company that shouts 'We're the best" convinces no one. "That's what they all say" is the typical consumer's reaction.

Advertising has backed itself into a visual corner. You can argue with the words, but you can't argue with a picture. No one is going to think, 'That's not a frog.'

Motivation is another matter. The mind thinks with words, not pictures. Prospects decide which brands to buy based on verbal comparisons. It's the best, it's the cheapest, it's the biggest, it's the lightest, it's the safest, it's the hippest, etc."

(page 263)
"Advertising is Incredible. PR is Credible."

"The high point of the Sigfried & Roy show at the Mirage in Las Vegas is when the master magicians turn a tiger into a showgirl. Incredible, thinks the audience, absolutely incredible.

Advertising creates the same impressions. When the polar bear drinks the Coca-Cola, the viewer thinks what a cute, clever, incredible commercial.

Advertising, like the Sigfried & Roy show, is incredible in the dictionary definition of the word: 'not credible, unbelievable.' No matter how much you camouflage and advertisement with creativity, at its core, it remains a message with little credibility."

PR has a credibility problem, too. Do people believe everything they read, hear, or see in the media? Of course not. But there is an important distinction. They only reject information that conflicts with ideas already established in their minds. For example, Democrats will reject information that supports a Republican viewpoint. And vice versa."

"Consider the situation when a new brand is launched, especially a new brand in a new category. There are no conflicts in the prospect's mind because there are no competing brands. It's a new category.

That's why PR is such a powerful tool in the launching of a new brand. Ideas can move from the media into the mind of the prospect with little chance of rejection. (If you don't know anything about Afghanistan, you will believe everything you read about the country.)

If you don't know anything about a new product or category, then you will believe everything you read about the subject, especially if the information comes from a credible source and not an incredible one."