Pervasive Assumptions

A while ago I wrote up a short advertising effectiveness test of sorts to annoy my friends with. I wanted to see how widespread the misconceptions surrounding advertising really were. Below are the eight true/false statements I used:

• Brand loyalty is crucial to achieving high sales
• Demographic segmentation is the best way to reach a target audience
• Advertising works through persuasion 
• Brands should primarily seek differentiation from their competitors 
• Brand awareness drives sales
• The best way to increase market share is by getting existing buyers to buy more often
• Social media strategy must be differentiated from traditional media strategy
• Mass marketing is an outdated strategy

The annoying part comes from the fact that each of these statements is false, representing commonly believed yet incorrect assumptions about how advertising works. Here they are in more detail:

Brand loyalty is crucial to achieving high sales.

Loyalty programs are not a new concept, but they are popping up in categories where loyalty is in no way correlated with an increase in sales.

In any category where competition is relatively undifferentiated and purchases are low involvement, these programs can form habitual behaviours that endure over time. Loyalty cards for coffee shops are a good example. They can create subliminal habits.

But even then, categories that do meet these criteria are still primarily comprised of brand switchers who are deal-driven. This is why becoming salient in the category through distinctiveness is often so much more effective.

Demographic segmentation is the best way to reach a target audience.

Dave Trott is perhaps the leading authority on debunking this myth. I’ve blogged about this before, but psychographics are far more telling when it comes to targeting a particular market.

The basic theory is this: when looking at how people behave, it helps to look at how people behave, and not arbitrary characteristics that make up who they are. The main reason being that the relation between these characteristics and actual behaviour is often based on pervasive stereotypes and qualitative research that is less than reliable .

Advertising works through persuasion.

Perhaps the most common misconception. As concluded by the research team at Ehrenberg-Bass, effective advertising has far deeper roots in social proof, status, and brand associations than in persuasion.

Brands should primarily seek differentiation from their competitors.

Ehrenberg-Bass and Millward Brown disagree on the extent of this assumption, but each rate distinctiveness as more effective than differentiation, even when such a distinction has no inherent meaning.

As the number of brands over the past few decades have increased tenfold, showing differentiation from competitors, even in a meaningful way, has become increasingly redundant. It is not sufficiently salient, especially in highly saturated categories.

Brand awareness drives sales.

This one simply won’t die, but is more a confusion of semantics. Longstanding psychological theories on the nature of perception and attention are enough to refute this assumption. Attention, while crucial to perception, has many pitfalls.

In short, being aware of a product is non-indicative of an intention to buy. While awareness is certainly necessary for remembering brands, there is no guarantee that it will occur. Awareness should not be confused with salience, especially among increasingly distracted consumers.

The best way to increase market share is by getting existing buyers to buy more often.

Many marketers rely on retention strategies over acquisition, when in reality statistical theories reveal that the most consistent of all purchases in a given category come from non-repeat buyers.

One particular theory is known as negative binomial distribution, and is most relevant to commodity categories. With brands of this type, the biggest chunk of market share will come from consumers who only buy once or twice, and not the minority that repeatedly buy.

Even if the most sales come from repeat buyers, the highest percentage of customers are almost always non-repeat buyers, and thus represent the biggest market for growth.

Social media strategy must be differentiated from traditional media strategy.

Notice how the most effective social campaigns in terms of actual sales are paid promoted? That’s no coincidence. What’s to say they wouldn’t be just as effective in a TV or print medium? The only advantage of social media, in this instance, is reach.

Effective social campaigns focus on communicating great ideas and driving sales, and not on attempting to garner interest from non-engaged consumers, the prevalence of which is horrendously low.

Non-promoted viral campaigns are a different matter entirely, but they are the exception, not the rule.

Mass marketing is an outdated strategy.

If you want to foster the highest possible reach and mental availability, then it makes sense to generate as much exposure as possible, because the only way for a brand to be considered amongst its competitors is if you are exposed to it in the first place.

So why are these assumptions so pervasive? As a young planner, I don't really know, but I suspect they were very much effective back in the day, long before the Internet and the explosions of brands and the numerous cultural shifts since.

The fact is we simply don’t buy this way anymore.

a.ce