Advertising as failure

At Burda’s DLD conference in Munich, talking with the Nokia Ideas Project, I first happened on the notion of advertising as failure. That is, the ideal relationship a company should have with its customer is that it produces a great product the customer loves and talks about and thus sells; there is no need for advertising there. It’s only in the case of failing at that idea that one needs to advertise. (And by the way, I hope there’s enough failure to continue to support media!)

This, then, is about the impact on the ad agency as a middleman:

At the Brite conference at Columbia, I expanded on the idea:

Jeff Jarvis at BRITE ’09 conference from BRITE Conference on Vimeo.

  • Joan Fahlgren

    I’ve often wondered how useful advertising really is to sell products. The only time it interests me is if it is for a product that is truly new and useful or if I am dissatisfied with my current product. The best way to hook me on things like shampoo or laundry detergent is to give me a free sample, I hate to buy a big bottle and not like it. Most commercials offend me, particularly drug commercials. The few I enjoy are most cat food commercials but I end up buying what my cats will eat which is not necessarily what they are pushing. Samples are good there, too, the dry food we now use is directly the result of a sample that they loved. I am also more influenced by newspaper articles or TV segments telling about the products. Though I know these are probably plants, they do convey more information.

    • Jason

      I agree, but at the same time let’s also keep in mind that traditional advertising also affects purchasing behavior subconsciously! We currently focus on the all these new means, while until sometime ago we went through decades of researching behavior based solely on the messages we receive subconsciously in our every day life… excluding mobile and internet.

  • http://ryanholiday.net Ryan Holiday

    Jeff, did your publisher spend any money advertising your book?

    There is a mile of difference between the fact advertising tends to be a sign of failure and advertising is a failure.

    • http://www.buzzmachine.com Jeff Jarvis

      Well, no, and never enough to satisfy any author, of course. ;.-)

      The best advertising for the book is when other readers recommend it. See this.

  • http://www.codybrown.name Cody Brown

    I think the description in your book of the ‘economy of information’ is a more useful way to look at it.

    Even the best products sometimes need to spend millions of dollars advertising because it is so difficult to break consumer patterns and give a group to understand they even have an option to go with your product

  • http://www.bebranded.net Tony Fannin

    Mr. Jarvis,
    I would like to first say I’ve enjoyed your book, “WWGD?”. I agree with your overall philosophical approach of forcing yourself and your business to think differently and view the world through new eyes. I must say, I do disagree with a few of your deductions.

    In the spirit of your book, I must fully disclose I’m in the marketing, branding, and advertising business. In reference to this blog, I agree with that businesses need to connect with their customers in a more real and authentic way. I agree that customers will tell others about you if they love your product or service. I agree in an ideal world, business SHOULD be able to clearly and creatively present their uniqueness. And I agree that group think is valuable. (to a point, but that’s another blog) Here’s what I find missing in your viewpoints:

    • Fortunately or unfortunately, I would say most businesses (big and small) really don’t know how to present themselves and their uniqueness. Most always follow a “me too” approach. “We’re just like them, only better”. That is not uniqueness. We work with everyone from Fortune 500 to single entrepreneur start-ups and one thing I’ve found as a common thread is they know their product, but don’t know much else outside of that arena. For example, I know marketing, but I don’t know corporate law, deep accounting, and with HR, I’m average at best. Yes, in your Google world, I can go to the internet and find answers, but I have other functions that I’m responsible for, so I would rather have professionals who’s expertise is in this area to handle it for me. Business can also buy media themselves, both online and offline. I find often though, they tend to shotgun their efforts and not get the ROI they were hoping for. Their logic is if I advertise on the web, they’ll instantly get loyal and rabid customers. You and I both know, there’s more to it than that.

    • Customers do pass along your brand and product if they like you. But, as you stated in your book, the web community is more keen on complaining. It was that way before the web. (do something right, the customer will tell 2 people. Do something wrong, they tell 50 people.) So depending on just links and clicks alone is limiting yourself. Also, no one is going to be as passionate about your product/service as you are. I would tell everyone, in every way possible about what I offer and how I can be of value. You are also assuming that your niche market only looks online. Some do. Some don’t. Take one of the largest marketing opportunities for the next 15 years, seniors. They don’t hangout online. They aren’t of the “Google” generation, so for me to advise our clients who have products/services that seniors would benefit from to only market online would be disastrous.

    • The new advertising agency – I agree with you that the “old” model of advertising is to make money from media commissions and mark-ups. That does put them as middlemen. I don’t see the newer breed of agency acting like that, my company included. The need breed doesn’t make money from media mark ups. We don’t place one ad online or off. The new breed makes money from ideas. That’s really what we sell. That’s our value. That’s what makes us unique from you, from other agencies, even from Google. It is these ideas that is our REAL currency and that’s where an ad agency can show their worth. (In full disclosure, we also make money from executing those ideas)

    I will admit we do have some “Googlely” practices we follow. Our agency is made up of a network of “superstars”. We only want the best in breed in various areas such as design, research, strategy, internet marketing, SEO, etc. They aren’t traditional employees, but more like mutual contract freelancers who also work on other projects for other people. Because we pay them well and provide a source of new work, they remain loyal to our efforts and our clients.

    In wrapping up, there is a place for advertising agencies. It’s not in mark-ups and being the gate keeper of media. The real value of an ad agency is ideas. Developing fresh and creative approaches to entertain and thrill your customers. Creating new ideas on how to leverage all of the tools available (web, print, blogs, TV, etc.) and make them integrated in a way where you invite customers to interact with you on ALL levels.

    I invite a spirited and insightful dialog with you. I can learn much from others.

  • http://www.jay.fm Jay Levitt

    And the same’s true for the quantity of advertising on a web site.

    Everywhere you go, sites are showing more ads, more intrusive ads, more interstitials, and more paginated articles than they were before the economic downturn. Presumably they were already maximizing their clickthrough-vs-abandon rates before the recession. Therefore, either:

    1.
    1. The average consumer is more receptive to advertising during a recession, or
    2. The value of a spot has dropped, and they’re selling as many spots as they can before the advertisers wise up.

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  • Dmitri Varsanofiev

    The idea that “a good product sells itself” assumes that the market for the product is large enough, so that the customers or potential customers actually get in contact. I do not know the exact statistics, but would expect that a very significant percentage of sales happen in the niche markets, where the customers have little chance of meeting to be able to discuss the merits of the product (or service). Furthermore, in a niche market it is sometimes unwise to discuss a product with others. For an extreme example consider the sales of real estate: it is counter to each buyer’s interests to discuss the details with other buyers. Job market gives us another example of an inherently secretive marketplace.

    It is thus unlikely that the need for advertising will significantly drop in the hypothetical event that the quality of products and services will rise to the level of “impeccable”.

  • global villager

    Jeff – well worth you throwing a rock in this pool. I wonder, though, about how the ‘good product sells itself’ model applies to the promotion of public policies aimed at changing behaviour? If eating healthily is so self-evidently sensible, why do governments spend so much money advertising and promoting this policy ‘product’? And what about road safety, drug prevention and many other similar topics?

    • http://www.buzzmachine.com Jeff Jarvis

      I get irritated every day I get onto an escalator in new york and have to hear recorded voices tell me how to ride it. nanny state meets CYA. education is one thing. hectoring is another.

  • http://cellar.org Undertoad

    Awesome thought Mr. Jeff. I think of this whenever I see an ad for Angie’s List. Here is a home improvement/contractors resource which attempts to have us pay $7.50/month with a $15 activation fee to exchange information about local contractors. Wow, you want me to build your site AND pay for it? No wonder you have to advertise to catch suckers in this bet.

  • http://www.BRITEblog.net David Rogers

    Jeff — Thanks again for speaking on this at the BRITE conference, and for sharing the video here.

    But is advertising truly a “failure”? (even one to be hoped for, in order to fund media)

    I think your fuller point is that advertising represents a “fallen state” from the “ideal” of purely spontaneous or consumer-led conversation around the value of a product, service, or brand. (Think Eve and Adam idyllically swapping consumer reviews in Milton’s Paradise… before that damn Apple and its ads arrive.)

    I also think it’s important that some categories and products are much more likely than others to achieve this paradise of having no need for advertising.

    Three criteria which are essential to going ad-free:
    1. Product is easily adopted (easy trial, sharing… E.Rogers’ “attractiveness” for Diffusion of Innovation)
    2. Low price point & lower-involvement decision (especially with a “free” price)
    3. Low marginal costs for the producer (all bits and no atoms is the ideal)

    If you consider these, it’s not surprising that we have ad-free success stories in categories like free web services (Twitter), lower-price media offerings (sleeper hit books or movies), cheap software (those $1.99 iphone apps), or modest-price fashion items (the craze for mismatched socks). All of these fit the above criteria.

    But if you look at a category like cars (less easy trial, high price point and high-involvement decision, high marginal cost per product), I would argue that you will never get a product so innovative that it needs no advertising.

    My Honda Fit is damn innovative and uncannily fits a host of needs that I will pay much more for than an iphone app (high mileage, great storage, parkability, etc.). Yes, I was greatly influenced by 3rd party reviews. But the costs and scale of designing and manufacturing a fleet of cars requires that automakers like Honda also invest in some high-reach advertising to build awareness and jump start the conversation. Even a consumer-crazed car brand like the Mini has found that they simply need advertising (in addition to all their grassroots buzz-making) in order to launch a product with sufficient volume.

    To say that Mini’s cars, or SAP’s enterprise software, or Cartier’s luxury watches, are “failing” to create a value offering that is as compelling as Twitter’s or Tap Tap Revenge’s–because they need ads to achieve scalable sales–would be an unfair comparison.

    Still, I think it’s a great question for every marketer to ask themselves: how much are we relying on advertising? And how much does that reliance reflect a failure to get our customer networks to sell the product for us?

    -David

  • http://metaversalmining.com Ian Falconer

    Thinking along the same lines as global villager –
    Would you stretch the advertising analogy to scientific data ?
    Does the best scientific data have a natural market and gain acceptance through recommendations (citiations), or does it an alternative life cycle as yet undefined ?

  • jaypee arriola

    well in my case i think it’s not, looking in SEO perspective, the more your website content is searched, the highly your content will be looked after to. it means for a good product to sell, you still need to present it, or it will not be seen..who will use it if no one sees it? so i think in no way advertising will be a failure.

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  • http://www.wacsf-blog.com Stephen Texeira

    The notion that the a great product will sell itself is one that has a great deal of currency and a long and proud lineage, going back at least to John Stuart Mill’s idea that an open exchange of ideas will result in the abandonment of false notion and the adoption of Truth. The problem with this concept — both from an advertising perspective and as formulated by Mr. Mill (and believe me I am loathe to point out the errors of such a towering intellect — is that is presupposes an audience that is universally literate, equally well informed and educated and able to access any and all information without impediment.

    We all know that this has never been the case in the past and clearly is still not the case. With the recent changes in information technology, however, we are getting closer than we ever have to fulfilling the last requirement, clearly a step in the right direction for both Mr. Mill and Mr. Jarvis. The first two, however, are for now and the foreseeable future far beyond our reach in this or any other society that we are aware of on this planet. And that means that the advertising that we all do is necessary for now and quite some time to come.

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  • http://www.olivermeakings.com Oliver Meakings

    Certainly in an ultra connected world that acts as a catalyst to quality rising to the surface advertising is less and less important.

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  • http://trueslant.com/paulsmalera Paul Smalera

    Jeff,
    Sorry to toot my own horn but you are coming around to something I started get at with my story on Yelp:

    http://www.thebigmoney.com/articles/0s-1s-and-s/2009/05/04/rebel-yelp

    “But Yelp’s founders have invented a Web site that cleaves local online advertising from journalism, right when journalism needs it most. Yelp is the evolution and replacement for the actually quite useful local advertising that used to appear in newspapers, only without the pesky journalism breaking up the ad pages.”
    and:

    http://trueslant.com/paulsmalera/2009/05/08/have-newspaper-executives-heard-of-yelp/

    “While newspapers and the AP are fighting with Google and getting excited about the Kindle DX, a site that is driving 25 million uniques a month of local arts, culture, dining, and business traffic is turning into their competition.”

    The point being not so much that the concept of advertising is a failure, but rather that the advertising as practiced by the newspaper industry is– here the web is giving us all these incredibly community tools and the best newspapers (and to be fair, most websites) have done is to come up with new sizes of banner ads. Innovate.

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  • http://www.thenextwave.biz/tnw David Esrati

    If products really sold themselves, we would never have seen an iPod ad, yet, Apple still has 73% of the market and advertises.
    While Apple makes great iPods- Chiat/Day makes great ads- it’s called specialization- and we can’t ignore it.
    Because distribution depends on demand- we have to have a way to create demand- and it’s called advertising. Advertising has very little to do with media- other than media has been supported by it for a long time because they had the distribution. Now that the distribution has been taken over by the web- things have shifted. Advertising funded all that content through the mass media- now the question becomes if content is still the best vehicle for communicating messages- or if some sort of sponsored agent like Google will become our new middleman.
    Our tagline is “our job is to make you more money than you pay us” and we’re proudly in the industry that you write off as just another middleman.
    Sorry, Jeff- the buzzmachine is not making it’s case on the new landscape- where buzz comes from brilliant disruptive creative from the best minds in the business- and they are in advertising.

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  • Chris Dorr

    This reminds me of the conversations I used to have when I worked in the Hollywood studio system, where I was an executive charged with finding and supervising movies that went into production. Those of us on the production side of the house would say that if a movie became a hit it was because of our brilliance in picking the right movie and making sure it was properly produced. If the movie tanked, it was the marketing department’s fault. Then, of course, there were those occasions (and they did occur) where we knew a movie was a real dog, and somehow it became a hit. In those cases we would throw our hands up in the air, (saying thank you to the movie gods) and insist there is no way to really judge the public’s taste.

  • Dominic Weiss

    Just a quick one Jeff, it strikes me that advertising agencies are not the middlemen in the relationship between brand and consumers – they are the brand that they build.

    Do consumers come into contact with ad’s and think about them as being made by an ad agency, or made by a brand? I wonder how many people know that Wiedens are behind the Honda ads or that Fallon are behind the Gorilla ads – not that many I bet.

    The advertising is a direct representation of the brand and the products within that brand.

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  • JO

    +Advertising is not a failure as much the abuse of channels and distribution matrices fails what you advertise.

    …to embue the psyche is not to tease the imagination.

    ((job of a good advert is in the tease. RULE #1))

    cheers!

    john.olmo
    ODC:NYC

  • James

    Advertising is critical to the success of a business just like a person, even you think you are very qualified for a job but if you don’t know how to sell and advertise yourself, you will be quite difficult to success.

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  • http://zenithwatchesusa.com simon bottom

    I’m pleased that I am not a News Corp, shareholder! With all the current problems it is facing in the United Kingdomwith the now closed, News of the World newspaper. Rupert Murdoch’s News Corp based in Delaware; is also facing a legal challenge from its shareholders. These shareholders, including investment funds, labor and municipal pension funds are accusing Murdoch of misusing News Corp assets, by treating the company like a family candy jar, which he raids whenever his appetite strikes. It looks like the trouble are just starting!