March 23, 2017

Adidas And Television


Adidas made some headlines this week when their new-ish ceo announced that they were no longer going to use television advertising and were going to put all their advertising money online.

The purpose of this move, according to the ceo, was to quadruple online sales in the next 3 years.

A few thoughts:
  • First, this doesn't sound like a change in ad strategy as much as a change in business strategy. 
"All of our engagement with the consumer is through digital media and we believe in the next three years we can take our online business from approximately 1 billion (euro) to 4 billion (euro) and create a much more direct engagement with consumers." 
From this language, it sounds like Adidas is switching from a typical retail sales strategy to an online direct response strategy.
  • The only problem is, from numbers I've been able to dig up, only 6% of their sales are online. Adidas annual sales are about $17b, about $1b of which is the result of e-commerce. The risk-reward element seems completely out-of-whack to me. Do you really want to spend 100% of your advertising money to support 6% of your sales?
  • This change in strategy could cause serious erosion of distribution at retail. I doubt that retailers will be happy about Adidas spending all its money to support its own online store sales and no money to support theirs.
  • Over several decades, Adidas has spent hundreds of millions - if not billions - on TV and other traditional ad media. In so doing it has established a successful and well-known brand. Milking the brand of its value by converting it to direct response may provide some short-term sales lift, but is likely to do damage long-term.
  • By the way, what TV advertising? I watch almost nothing but sports on TV and in the recent past I can't remember the last time I saw an Adidas spot. This means one of three things: either the whole "no more TV" stuff is horseshit, or their media buying is lousy, or their creative is so weak I can't even remember it. 
  • Or maybe he is not envisioning a refocus to direct response and believes he can boost all sales with a purely online advertising effort. Let's do some math.
                                                          
    In the past year, Adidas grew by 16%. Projecting that growth over the next 3 years they would be at about $25.5 billion in sales. Quadrupling their online sales without growing their retail business would leave them with about $20 billion in sales. So even if they achieved their magnificent online growth, they still have to grow their retail business by about 10% annually to get to that $25.5 number. I'm curious to see how well they can do at achieving 10% annual growth in offline sales with 100% online advertising. This should be fun.






March 20, 2017

The Future Is The Place To Be


When I'm shooting my mouth off at some conference the question I get most frequently is this, "What's the future of advertising?"

I have no fucking idea what's going to happen 10 minutes from now, how the hell am I supposed to know what's going to happen "in the future," whenever the hell that is? For all I know, someday someone might click on a banner ad. Who knows?

But conference goers and press reporters can't help asking that question. They've been trained to do this by marketing yappers.

You see, marketing gurus are usually so confused by all the horseshit generated by their industry that they can't even figure out what's happening now. So they've learned to hide in the future.

The great thing about talking about the future is that you don't have to know anything. You just make shit up and nobody can refute it.

And when the future comes, who's going to remember the baloney you predicted 10 years ago? Meanwhile you make a lot of money and get a lot of press with impressive sounding horseshit.

This strategy also works great for CMOs...
BOSS: Why is business so shitty?
CMO: Well, we're preparing for the future...
Sadly, when the future shows up 18 months later and business is still shitty the CMO gets thrown out on his ass and is replaced by some other nitwit who thinks he knows what the future looks like.

The present, on the other hand, is a dangerous place. It's a place with actual facts. There's accountability. When you say something about the present there's a way to check on it. So if you're a buffoon with a Powerpoint and a bag full of clich├ęs stay away from the present. Nothing to see here. Head for the future - it's your happy place.

One of my personal policies when I do talks is to never talk about the future. The present is bad enough. The only time I do so is to ridicule predictions made by marketing geniuses. Always good for a few laughs.

I try only to speak about what's currently happening. Not horseshit about stuff that may or may not happen in 10 years. A good deal of what I talk about is how different the present is from the once certain predictions of marketing futurists.

I go to a lot of conferences (hey, it's a living) and I have to listen to a lot of speakers. It's pretty easy to know pretty quickly who the bullshit artists are. They're the ones who are telling us what the future is going to be like and warning us that we'd better be ready for it or we'll be left behind. And being ready for it usually includes buying into some baloney they're selling. 

The futurists know nothing that you don't know. Well, I'm wrong. They know one thing - they know how to turn bullshit into a speaking fee.

And they always have an escape valve. When you point out that a prediction of theirs was 100% dead-ass wrong, they give you this -- "just wait, you'll see."

In other words, they kick the can farther into the future. It's a no-lose proposition.

So I have some predictions to make about the future...
  • Social media will replace advertising
  • The 30-second spot is dead
  • Google glasses will be everywhere
  • TV will die
  • QR codes will change advertising
  • Interactive TV will be huge
Just wait, you'll see.

March 15, 2017

Ad Industry's Dangerous, Misguided Policy


A coalition of advertising trade associations joined the Trump administration yesterday in calling for the rejection of an FCC regulation created to protect consumers by restricting the collection and sharing of personal information by internet service providers like Comcast and AT&T.

The regulation would have given consumers far more control over their personal information by requiring them to opt-in before the ISPs could use or sell their personal information.

The actions of the advertising industry in this instance are deplorable -- but hardly surprising. The ad industry is losing its grip. We can't control ourselves.

Jonathan Schwantes of the Consumers Union has said,  "Consumers deserve to know—and have a say in—who is collecting certain information about them and how it’s used."

Listen to this bullshit from the 4A's, AAF, ANA, DMA and IAB...
"Without prompt action in Congress or at the FCC, the FCC's regulations would break with well-accepted and functioning industry practices, chilling innovation and hurting the consumers the regulation was supposed to protect."
Yeah, right. Well-accepted practices like stalking us, selling our personal information to the highest bidder, enabling creeps and criminals to hack info about us. We wouldn't want to deprive them of innovations like that. Heck no.

It's not bad enough that the amount of information online marketers and media companies now have about us is alarming. Now we have to let Comcast and AT&T into our pants.

Adtech - the computerized media exploitation of the fruits of tracking - is allowing criminals to steal our personal information, and governments to spy on us by tapping into marketing data. It is destroying our trust in the news, and repulsing our customers.

What is it going to take to make the ad industry understand what we are enabling?

Everything the ad tech industry and the online media honchos have ever told us about privacy and security has turned out to be 100% undiluted horseshit. They are incompetent, irresponsible, and dangerous. They cannot be trusted with private information about us.

It's time for sensible, responsible people in the advertising and marketing industry to get off their asses and do something about this.

Along with some others, I am speaking at the World Federation of Advertisers next month in Toronto on the subject of tracking and adtech. It will be an audience of hundreds of the world's largest marketers who are unlikely to be sympathetic to my point of view.

I can't wait to give it to them with both barrels.