TED Conversations

Harald Jezek

Owner, Nuada beauty+wellness

TEDCRED 50+

This conversation is closed. Start a new conversation
or join one »

Advertising.......is it still worth the money ?

Today we are inundated with ads of any kind, form and shape. This brings up the question how efficient ads actually are. Do people still pay attention and if they do, do they act based on the ads ? Or are ads considered background noise or even worse, an annoyance ?
What kind of ads are the most likely to catch your attention ? As a consumer, how would you like a company to engage with you ?
Here a link to the best ads on TED: http://www.ted.com/aws

Topics: advertising
+1
Share:
progress indicator
  • thumb
    Apr 6 2011: "People pay attention to what interests them. Sometimes it's a an ad."
    - Howard Gossage, 1917-1969.
    Howard was a professional ad man. So am I. No one talented in advertising or marketing sets out to annoy, interrupt or irritate people. When advertising is done well it engages, rewards, surprises, entertains, informs and/or inspires. I recognize that most do not do this. But like anything - 90% is crap, 9% is good and 1% is great.
    As many people have noted, the question is simply too broad when stated "advertising is it worth the money?". Smart, creative marketing communication delivered to the right group of people will always add value to a brand and a product.
    The better question, perhaps, is: "What is advertising in 2011?"
    As a creative leader for a major Ad agency, I study, obsess and follow this topic, obviously with great personal and professional interest. One of dynamics I notice most is the disconnect between the trendy hype and discussion in the press and online around the death of traditional TV and the modern viewer's ability to "Tivo" around ads and the actual reality of viewer and user behavior. These are myths. DVR'ing and Tivo'ing programming actually increases consumption of advertising (because people watch more TV). Viewers and users will always say that advertising does not influence their purchasing decisions. Of course, who would admit that out loud? However, there is undeniable amounts of behavioral data proving otherwise.
    Look, no one loathes crappy annoying insipid advertising more than me. And if we frame the question that way - no it is definitely still not worth the money since there are multiple ways to avoid it, trash it and bash it.
    But with the synergies of interactive technology, location-based gaming and film - storytelling around brands will definitely be worth it - if and only if - the content is interesting to the group of people it needs to connect with. Just remember, people love to buy. They just hate to be sold.
  • Apr 7 2011: It would seem that newspaper retail advertising is alive and well.

    I live in a town of one million people. We have two local daily papers. I subscribe to one of them. The following inserts were included with today's paper:

    Shopping Guide (100% ads): 6 pages.
    "Home & Style" feature section (50% ads): 14 pages.
    Walmart: 6 pages.
    Sears: 38 pages.
    Bass Pro Shops: 16 pages.
    Toys R Us: 24 pages.
    The Bay (department store): 32 pages.
    Superstore (Canadian Walmart competitor): 24 pages
    Superstore garden furniture: 12 pages.
    Wholesale Sports Outfitters: 8 pages.
    London Drugs: 28 pages.
    Safeway liquor store: 4 pages.
    Safeway: 12 pages.
    Coop (supermarket): 10 pages.
    Gardeing feature (75% ads): 12 pages.

    I'm not sure how many people actually read them, but I know at least one person who counted all the pages.
  • Apr 5 2011: I hate to be so simplistic about this but from the perspective of a company, if they bring in more money due to that advertisement than they pay to produce it then it is worth the money. Every business is different so the answer will be different for each one, but as a general rule thats pretty much it.
    • thumb
      Apr 5 2011: "(I)f they bring in more money due to that advertisement than they pay to produce it then it is worth the money."

      Yup, that's the question. And for most businesses, most of the time, the answer is, "No."

      "Every business is different so the answer will be different for each one, but as a general rule thats pretty much it."

      Sure... Except when it isn't. "Building the brand," "increasing our mindshare," or just the sheer raw ego of the managers with that particular slice of the budget all come to mind.

      There's a reason "Dilbert" is popular. Many, many businesses only make money as a coincidence.
    • thumb
      Apr 9 2011: Ross, let's look at P&G for example as one of the ad spending global giants.
      P&G net sales in 2010 was 78.9 Billion, up from 76.6 Billion in 2009.
      Ad spending was almost 9 billion in 2010 up about 1 Billion vs. 2009.
      What do you think, was it money spent wisely ?
  • Apr 5 2011: As a young adult, I see advertisements as an annoyance. Already, tv ads can be skipped over or completely ignored. Although ads perhaps remain as an effective form of attracting consumers, ads in general are not as impacting as they probably were twenty years ago, when ads were an innovative method of reaching an audience. At this point, creativity is all that truly attracts a consumer.
    • Apr 5 2011: i am with you, creativity and innovative methods are lot more effective
  • Apr 4 2011: I think advertising is very important because it helps us inform people bout our businesses. For example, as a Calgary roofer I find it very difficult to reach my clients without advertising because of the nature of my business.
    • thumb
      Apr 4 2011: James, so how much ROI do you get out from your ads ? How many roofers are you competing with in your area ? Did you consider other ways to spread the word about your business ?
  • Mar 30 2011: They can be annoying Harald, but the evidence that well executed and targetted advertising works is overwhelming.
  • Mar 25 2011: Because of advertisement, I have completely given up television and most radio (I still managed to find a good radio station that streams without advertisement in Spain because it’s public…)
    I don’t even live in the US! In Europe advertisement is significantly less on conventional media and it’s being even actively cut down by policy and it is still way too much. It has simply become impossible to enjoy.
    Many of my friends feel the same way and have given up TV as well… I really believe that if advertisement does not reinvent itself into something constructive and non-intrusive, it will start losing effectiveness faster and faster and even more of those “advertising dollars” will go down the drain!
    More and more, both I and my friends choose products not on their popularity, but based on their environmental footprint, health effects, etc, which is information hard to find and not usually advertised. I am actually less likely to trust a product that is advertised as “natural” or “bio” etc that comes from a company that is famous for “conventional” products of this type (think cosmetics or food&beverages). I rather make choices based on the word of mouth, customer reviews, or experience.
    That said, creativity, ingenuity and design in advertisement keep surprising me from time to time and I really enjoy a good clip. I usually stream those on youtube however and they rarely have an effect on my consumer behavior…
  • Mar 25 2011: I have worked in advertising, printing and the purchase of printing. Advertising has really taken some hits over the years - but it has proved its worth. The owner of Wanamaker's in Philadelphia once said "I know half of my advertising dollars are wasted - I just don't know which half". There is no one-to-one ratio for advertising - that's why people have to be clever with its use. I'd say that advertising is just a phenomena of attempting to get the word out - not some awful manipulation of the masses.
  • thumb
    Mar 24 2011: Advertising is only worth the money if it is a small part of a wider marketing campaign centered round the product and/or the company. Free PR and social networks should also be used to advertise the advert itself.

    A company that create a "story" for its products will always have an edge on its competitors.
    • thumb
      Mar 25 2011: Agreed, people are natural story tellers and also love to hear stories. Not sure though, whether every product/service makes good material to build a story around. But I know a few companies that did a real good job based on story telling.
      • thumb
        Mar 28 2011: By "story" I meant a "thread" that will create interest and that will captivate the audience, making them look out for the next "instalment".
        Remember the "Nescafe Gold Blend" advert in the 80s in the UK? It generated so much free pr around it. Some of the actors in it are only remembered for the product. http://www.youtube.com/watch?v=igi9u6X4y-s&feature=related
        • thumb
          Mar 29 2011: Krimo, no I don't remember the Nescafe ad, but then the advertising landscape changed a lot since then. What worked in the 80s probably wouldn't work anymore today where people care more about what their friends have to say on facebook or twitter than an ad, they don't trust anyway.
  • thumb
    Mar 23 2011: advertising is powerful.

    but advertising is used to manipulate people. so, its worth the money only if we put it to a better use.
  • Mar 22 2011: Advertising is not as effective on those people who think for themselves, more effective for those that don't. Whether it is worth the money or not depends of which group you're trying to reach.
    • thumb
      Mar 23 2011: Do you think companies distinguish between a thinking and non-thinking target group ?
      • Mar 23 2011: Yes.

        In a previous life I was a commercial artist. The term ‘Advertising’ has become a generic descriptor for all promotional efforts. Promotion is divided among ‘advertising’, ‘public relations’, ‘corp. communications’ among other additional specific terms.

        For several years back in the 80s I free-lanced at an agency where I helped produce collateral materials, sales support, dealer support, and customer satisfaction materials for Mercedes-Benz.

        If I remember correctly, 85% of the buyers purchased ‘Benz, because it conferred upscale status on the buyer. Another 10% plus purchased ‘Benz just because that was what their old car was, and it was old and worn, and so it was time for a new one. It’s not a decision they would spend a lot of time on. Only 5% or less purchased the ‘Benz because they appreciated its engineering.

        We produced separate materials for these subsets. This is one example from my experience. Not only do companies distinguish the advertising for separate groups, the products themselves are designed to appeal to different groups.
        • thumb
          Mar 24 2011: Vincine, yes I agree with this kind of grouping. What I was questioning was whether a company would design ads for thinking vs. non thinking people.
      • thumb
        Mar 23 2011: @Vincine, thanks for the example.

        @Harald, check out the differences between these two car ads.

        http://www.youtube.com/watch?v=N3unprOx5sQ&feature=player_embedded

        http://www.youtube.com/watch?v=Wq58zS4_jvM

        I'd love to see what you gather from the differences.
        • thumb
          Mar 24 2011: the ads are for different groups of people. I think Benz is more for the older and more conservative group, while the Eco Audio is for younger, environmentally more conscious people, but who still want to drive a car instead of a bike. Maybe this ad is geared toward removing some of the guilt an environmentally conscious person could feel in owning a car.

          That said, I rarely watch any ads, but when I do, then I look at them as I would look at a movie evaluating the originality of the story, creativity, etc.
          I would neither run out to buy a Benz nor an Audi based on the ads....lol
      • Mar 24 2011: @Harald; >What I was questioning was whether a company would design ads for thinking vs. non thinking people.< Yes again.

        Most people live on an ‘emotional plane’. Most commercials, radio spots, & paid print promotion are directed to take advantage of this. Public relation placements and corp. communications usually are written and/or produced with an eye toward an objective, or the appearance of an objective, numeration of the benefits of ‘x’. They are meant to be understood on an intellectual level.

        Once upon a time, men smoked unfiltered cigarettes; Camels, Lucky Strikes, etc. Only women smoked filtered cigarettes. The women’s cigarette market was much smaller than the men’s. The Marlboro brand was created to make filtered cigarettes appeal to the larger men's market. Thus the cowboys in the Marlboro campaign. They are designed to appeal toward male's desire to be macho, or at least to not appear feminine, an emotional response.

        The promotional materials a doctor receives from pharmaceutical companies mostly display efficacy and patient improvement statistics, rigged or not, meant to understood by rational analysis.

        Whether a company pushes a product or service primarily via an emotional or an intellectual appeal, or both, depends on the product and the targeted consumers. That’s one of the first considerations in the design of an advertising campaign, the rest of the promotional materials flow from that.
  • thumb
    Apr 20 2011: I agree with Lance - customers are your best advertisers. How effectively you facilitate those customers in spreading the word becomes the playing field. The technological tools that help to do this are abundant, but tools are only as good as those who use them.

    Still, there must be some benefit (branding?) to traditional forms of advertising in magazines like Vanity Fair and on TV. Otherwise companies would not invest in it.
  • thumb
    Apr 19 2011: Your customers are your best advertisers, that has always been and will always be.
    Prudent trial and error should determine if any other forms can benefit your business taking into consideration, the dreaded ROI.
  • thumb
    Apr 12 2011: The problem with advertising is that a lot of it is delivered to the wrong people who have no interest, and it is wasted. There is still a ton of work to be done in advertising about where, when, how, and to whom you should advertise. A lot of this can be done by understanding how your consumers think, and making more sense of how certain products appeal the the same audience, and advertise them together.

    A lot of money has been spent to try and figure this out, but in my opinion, the people spearheading the efforts to do so arent very bright, and havent made much progress. If i could offer my own personal 2 cents on the topic, they could start by realizing that consumers are dynamic, and by the time they do a study on 20 year olds this year, that is obsolete information about what 20 year olds next year will like. Current advertisers are making big mistakes by spending a lot of money to "figure out" what 20 year old white males like, and then they think they are done, and use the same information for add campaigns 5 or 6 years later, and then after wonder why it didnt work.

    Think locally, and ask questions constantly to evolve your message to match your consumers. Most of this is actually done via word of mouth.To answer your question~ yes it is worth the money. But only if you use your head. A local expert would be very valuable to work with while you draw up your ideas for your add campaign. A lot of this is common sense, if you want to sell something to 25 year old females from monterrey, get some smart (and socially involved) 25 year old females from monterrey to help you advertise. (or at least tell your marketting department to do so.)
  • thumb
    Apr 12 2011: Having focused on the "ma & pa" sized businesses in the tourist industry, I can say that, if other expenses rise, advertising is the first 'optional' expense to go.
    Proving effectiveness of advertising is still a challenge, but arguing against the internet/facebook and twittering is useless. That seems to be where all new money is being spent...
  • thumb
    Apr 7 2011: Of course, not only is it worth it, but is essential for the survival of our current system. We need to constantly stimulate and manipulated people into buying and consuming more and we are getting better at it. We use latest technology like fMRI to study our deepest instinct to find how to trigger the "buy" button. Of course, we assume that the resources are limitless...
  • Apr 6 2011: Ok after reading the first 20 comments or so I had to chime in... so maybe someone else has said this.

    I make a living by advertising products for businesses. A good living. Its worth it. But Its not worth it if you're stupid.

    with the technology available today you can measure and track the success of your advertising. TV radio and print ads are dying and everything is moving online for this very reason.

    Millions have been made by individuals running ad campaigns from their basement.
  • thumb
    Apr 6 2011: Advertising is the art of getting an keeping attention, which is essentially good story-telling. Its a shame that most of our story telling is done on behalf of large corporations, but is that really any better than telling stories for kings? There's more bad youtube videos than good, which means not everyone is good a story-telling. But the best paying jobs for good story-tellers are in Advertising.

    Its no wonder we have so many ads, humans love stories, but it blows my mind how much money is put behind fundamentally boring narratives.
  • thumb
    Apr 5 2011: A very good question, I think. Personally, very few of the products I buy are advertised in mainstream media though I assume I am the exception to the rule.
  • thumb
    Apr 5 2011: Kids are definitely affected and there are shameful amounts of advertising directed at children in NZ.

    I like to think that I am unaffected by ads. Certainly I try to ignore them, but it really depends on the purpose of the advert.

    If I need a product, chances are that my thoughts will turn first to the product or company that bangs on the most - the squeaky wheel and all that.

    As for being influenced by an ad to buy a product because I'm somehow impressed by their branding attempts or their product image gels nicely with my self-image, I don't believe this works. In fact, for me, it does the opposite. If I feel my intelligence has been insulted (usually because I am not the target audience, I suppose) then I will consciously avoid that product.
  • Apr 5 2011: Advertisements are undoubtebly a waste of money. The age of the internet puts the human race in a position where if i get the sudden impulse to own just about anything, I can link up with a company that produces that item within minutes. Advertisements are obselete. Companies should make use of the money by improving their product, because the internet is essentially free advertisements. The same way consumers can seek manufacturers, manufacturers can also seek potential clients. I believe that companies should re-task the advertising portion of their company to focus on the internet. Hair loss solution company? Look on message boards and opinion sites such as yahoo answers. There are always people on there looking for a solution to their problem, and being a representative of a company, you would hopefully know a reasonable bit more than your average web surfer. if someone looking for a hair loss solution and they receive an answer to their query from an apparently well informed, literate, caring individual, you might just win yourself a new customer. And everyone that visits that post because they googled, "good hair loss products" will see that a user seemingly had his hair issues resolved by your company. Consumer behavior has changed, consumers have evolved. Now its time that advertisements do too. They simply annoy their audience, rather than educating or enticing them.
  • Apr 5 2011: i believe advertising is one of the highest form of opening up, due to globalisation its necessary to let people know what we as business people are giving them. spending money is a something where one has to have a limit. its all about convincing people the end user. its just my perception. people in the developing nation still use television a lots and based on advertising i personally can tell the publicity they get and by which people eventually convince themselves to get the products or services
  • thumb
    Apr 5 2011: Well advertising can be good if the entire concept of the advert is captivating for example there's an advert for indomie noodles in Nigeria presently and people are usually excited when it's time for the advert either on TV or radio cause it just communicates with people but on the other hand, when an advert is boring or when it's being streamed too often it tends to annoy people and they just shut the eyes of their mind to whatever is being said there and in that light, advertising is said to be a waste of resources. But companies can find a balance by getting good and interesting concepts that entertain and also communicates with the customers and also reduce the frequency of streaming or postings because
    "What becomes familiar becomes unseen".
  • thumb
    Apr 5 2011: Absolutely not.

    Every piece of empirical data I've seen -- especially as advertising has moved online -- supports the idea that advertising has no causal effect on sales. Someone else has made the joke about 50% going to waste, but not knowing which 50%... It's funny, it rings true, yes, but if that's not the definition of anticausal randomness, then what is? My google-fu isn't working just now, but I've seen charts outlining change in percent spent on advertising by economic sector, and you see all four Cartesian results one would expect from randomness: +ads, +sales; +ads - sales; -ads, +sales; -ads -sales. There's just no consistent link -- it's all partial, random reinforcement.

    The advertising industry as a whole has seen this, too. Bob Garfield's "Chaos Scenario" pieces in AdAge are fairly indicative. FastCompany's piece, "The Future of Advertising," back in November is also instructive (eyebrow raising quote: "Marketing in the future is like sex. Only the losers will have to pay for it."). Simon Dumenco just wrote a column in AdAge supporting the New York Times' move away from an advertising-based model to a subscription-based model, saying it would be "profoundly myopic" to think a publication can support itself today through advertising alone.

    Total advertising spending has been declining, as has jobs in the sector -- I think the figure is about 10-15% for each. (Again, the source is AdAge) Some of it's been moving online (Google and Facebook, obviously), but the amount of dollars they're getting isn't matching the cuts in older media. It's not unlike how record labels get money from iTunes sales, but nowhere near as much as they used to with CDs.

    This is why I've said, Newspapers aren't dying -- advertising is dying. It's just taking newspapers along as collateral damage.
  • thumb
    Apr 4 2011: Let's put aside traditional Ad's and their message and consider Political Ad saturation and the waste of funds that could be used for better purposes. President Obama announced today that he would be seeking re-election. Soon we'll begin the election process when during certain time slots you can expect to view multiple campaign ads during each commercial break - some positive mostly negative. How many times do you need to view the same Ad every 10 or 15 minutes for days and weeks at a time until they change to a new format with the same negative information. As citizens should we place limits on spending by parties and candidates? Is it possible for a under-financed candidate to have any real chance of being elected. Thank goodness for pay per view channels like showtime and HBO, at least the fortunate few can escape for a short time the unwanted campaign messages.
  • thumb
    Apr 4 2011: My opinion ads have to be very simple and to catch the eye.But because this ads I hate tv.Have to be a shorter time .I see that gain a lot of money but they make me hate tv.Realy ads is very impotant because they show us the different and new think.But my opinion they have to be shorter time
  • thumb
    Apr 4 2011: To me Advertising is intuitive way of propagating your idea/product. Some advertisements make you think, make you feel, and some takes your attention away (the background music in the Nescafe ad) . But there are some ads which are poorly created and just annoys you. Advertisement to me is a very creative thing which brings the challenge of making a good and impeccable impression which is long lasting.
  • thumb
    Apr 3 2011: ...see the free will discussions...the very volume ( in time and space, how often and long you are exposed to them) of some ads, might get into your system in a way that a decision is made in your brain. And six seconds later you realize you bought that product with the most annoying ad....
  • thumb
    Apr 3 2011: Oh I definitely have a thought on this one.

    I think it definitely depends on what part of the world you are, for one. I know that going back and forth between Romania and Canada, for instance - you see a discrepancy in the way advertising is done, and the trust people place on advertising. In western countries it seems that people have become more selective and ''immune'' to most advertising, and it has become almost somewhat of an art - I am thinking of the superbowl ads, of course, but also the fact that now it's more of a contest to be creative than to inform the consumers about a specific product. I see countless ads that barely specify the name of the product or what it does. That being said, it's insane that nowadays, we still have ads about washing detergents or shampoo that are so cliche (as in: this is the best detergent out there, see how well it cleans?!). In emerging countries like Romania, advertising is much more at an early stage - thus informative ads exist, and creative ones are barely starting to grow.

    From my personal experience, I honestly feel bombarded from all sides with ads. Online ads are simply crazy, I haven't seen a pure content page in a long, long time - and they crawl every single corner of our life online. Gmail, facebook (thank god for ad-blocking software for FB!), everything.

    I'm not sure if I am immune to them, really, or if anyone is. I mean, on a subliminal level, if we're exposed to many many repetitions of the product/brand, no matter the message, we're still more likely to remember that brand and feel connected to it when we face a decision in store - so even if we try to block them out or not buy from them, our instincts might be persuaded otherwise on a subliminal level.

    A few ads that stood out for me these past weeks are the simplest, most beautiful ones - that go against the ''trend'' - I'm thinking Jen Anniston's viral video for Smartwater or Motorola's ad against apple.