Tuesday, October 17, 2006

Advertising

Seth Godin reports a story from Howard Yermish:
'This evening, my 4-year old daughter came downstairs for some ice cream. When the commercial for the Little Mermaid DVD came on, she said, "We don't need to see that commercial. Don't they know we already bought that movie?"

And she was right.'
A simple view of the purpose of advertising is that it is designed to persuade you to buy a particular product. If you have already bought the movie, then there is no further effect possible, and therefore no purpose in showing you the commercial.

But advertising can have further effects. It can remind you why you bought the product, and give you added confirmation that you made the right decision. It can make you feel good about having bought the product - perhaps before the mass audience discovered it. It can prompt you to think of friends and family that might appreciate the product, perhaps as a Christmas gift, or perhaps just as a personal recommendation. It can prepare you to buy another future product - perhaps the movie sequel. So advertising to the converted isn't necessarily wasted - we just need to find different ways of measuring the effects.

In the past, advertisers have had little choice - advertisements were broadcast to a large and undifferentiated audience. With modern technology it starts to be possible to target advertising very precisely, so that for example advertisements are never screened to people who have already bought a given product. This kind of thing can make advertising more efficient at achieving a narrowly defined effect.

But this means that the broader effects of advertising to the converted are lost. Without subsequent reinforcement from further advertising plus word-of-mouth, a larger proportion of purchasers may come to regret their purchase, and even to distrust future advertisements. Narrow efficiency is gained, but at the cost of a broader and deeper effectiveness.

So we sometimes need to be suspicious of technologies that appear to deliver some effects more efficiently. Are they the right effects? Are there some other beneficial effects we might be losing? What is the real purpose of change?

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2 comments:

Howard Yermish said...

You make a solid point, and I agree with the importance of reminding purchasers that they made a smart choice. However, I think that my daughter keeps it simple. When Disney "knows" that we purchased the DVD and can remind us that "since you are enjoying The Little Mermaid so much, here are two new DVDs that you can pre-order." In fact, Disney can plant some kind of coupon in the DVD itself that allows us to get a deal or some reward for our loyalty. The commercial simply tells us to get out our DVD, find the coupon code and buy something else. And I can easily see building some form of sharing into this. "Hey, give this coupon to a friend and when they buy the Little Mermaid DVD for themselves, we will send both of youa $5 off coupon for the Cars DVD."

Along the same lines are the commercials that I don't ever want to see. If my daughter is in the room and the TV shows a commercial for "The Texas Chainsaw Massacre," I'm going to change the channel! I would love nothing more that to decide that certain kinds of commercials are not appropriate for those currently watching.

Amazon seems to predict things that I will like. All that she wants is for this personalization to extend to the television. When technology makes this simple and I can see relevant and personal advertisements for products that are actually interesting to me, I'll stop ignoring the commercials.

Richard Veryard said...

Thanks for the comment Howard. Clearly the more Disney knows about your past and present circumstances, the more accurately it can target advertising to you. (Not quite sure how they are supposed to check whether your daughter is in the room before they show you an adult trailer though.) I guess that's something most of us would welcome most of the time - I am all in favour of companies providing a better (more differentiated) service, although there are certainly limits to how much I really want Disney to know about me.

Your daughter will undoubtedly make a smart businesswoman if she chooses that path. I picked up this example not to disagree with her, but to explore a more general point for the purposes of the POSIWID blog. When we fine-tune a system to produce a particular effect, we may lose some beneficial side-effects. How will Disney manage the greater complexity that comes from more subtle advertising purposes?