9 Questions We Answered About Ads, Brands and Marketing

By Derek Thompson

For the last week, The Atlantic Business has been running a special series on advertising, with a dozen articles and essays on creating ads, judging ads, shopping with our smartphones, and understanding the surprising marketing motives in the entertainment industry. If you missed our coverage, get the highlights here.

1: Can a Commercial Be Too Sexy For Its Own Good?

Answer: Yes. Ask the folks who designed Axe's campaign around dorky guys covering themselves with body spray to attract hot girls.

The campaign was an instant hit, and Axe quickly became the No. 1 male brand in the total antiperspirant/deodorant category, earning Unilever $71 million in sales in 2006 ($50 million more than its closest rival, Tag) and $186 million (excluding Walmart sales) in 2007, an increase of 14 percent from a year  earlier -- which was leagues ahead of its nearest rival. What's more, sales of the brand's other products shot up as well, because body sprays are often used as a "training fragrance," and if a young male cottons to a brand, he's more likely to buy other products from the same company (what we in the industry call "the halo effect").

However, the brand's early success soon began to backfire. The problem was, the ads had worked too well in persuading the Insecure Novices and Enthusiastic Novices to buy the product. Geeks and dorks everywhere were now buying Axe by the caseload, and it was hurting the brand's image. Eventually (in the United States, at least), to most high-school and college-age males, Axe had essentially become the brand for pathetic losers and, not surprisingly, sales took a huge hit.

2: Are Movies in the Box Office Business?

Answer: No. Movies are in the TV business. In 2007, worldwide MPAA studio receipts totaled $43 billion. U.S. box office accounted for less than 10 percent of that haul. The world's multiplexes accounted for a little more than 10 percent. "The other 80 percent now came from the ubiquitous couch potato who was viewing his movies at home via DVDs, Blu-rays, pay-per-view, a digital recorder, cable channels, or even network television," Edward Jay Epstein wrote.

movie biz.png3: Do Fact-Based Ads or Emotional Ads Work Better?

Answer: Probably emotional ads, says science. But it depends on what you want and how old you are.

The literature on rational versus affective advertising is very long and mostly inconclusive. Some studies suggest we care more about rational ads for things we need, like medicine, and are more receptive to emotional ads for things we simply want, like clothes. But another study by Aimee Drolet & Patti Williams & Loraine Lau-Gesk showed that, whereas younger consumers prefer emotional ads for "hedonic" products (beer and cologne) and fact-based ads for "utilitarian" products (pain relievers and investment plans), older consumers prefer affective ads for just about everything.

4: How Do You Make a Funny Ad That Translates in Every Language?

Answer: Humor is culturally specific. Puns travel badly. But gender stereotypes are universal.


5: How Will Smartphones Change Shopping?

Answer: By acting as your personal shopping assistant, consumer researcher, and coupon counter.

You are now walking into the store armed with a mobile device that is loaded with the retailer's app. By "checking in" as you walk through the door, you automatically earn reward points that are stored on your phone and can be used later to buy merchandise. Meanwhile, the app is crunching through the latest web-wide trends, reviews, buzz, stories and specs available - and guiding you to products that are the best fit for you.

Your app also takes your social preferences into account. It knows what your friends like and what they have purchased, which could come in handy if you are looking for a pair of shoes just like the ones your friend has. The app keeps track of the music you like, the activities you enjoy, the brands you "follow" and the type of overall person you are. It'll know not to guide you to that navy cashmere sweater if ripped denim is more your style. And no need to keep track of coupons. When you check out, reward points and coupons will automatically be applied to your purchase.

6: What Will Be the Game-Changer in Mobile Technology?

Answer: Near field communications (NFC), which would allow our phones to make payments and collect information about items throughout a store.

NFC is going to be embedded in phones and that it will be a game changer. More and more smartphones are going to have this technology, which lets you transmit data over short distances, like to a cash register, by "tapping" your phone on a reader. But I don't think payment is going to be the use case that actually gets people tapping, initially. That may be part of it. But it actually will be things like "Hey, I'm going to tap to share music or content with somebody else." We'll tap phones, and then that'll be a very quick way to exchange that content, whether it's payment information or something else.

We'll have NFC chips in posters, and the posters will have some kind of offer embedded. So say I want to get this offer. I tap the poster, and the offer is stored in my digital wallet instantly. It could be a coupon, it could be a song, it could be a video. If mobile payments take hold, they'll evolve from these kinds of activities.

7: Who Invented the Kind of Marketing That Apple Mainstreamed?

Answer: Former General Motors CEO Alfred Sloan's two marketing principles from the 1920 -- "a car for every purse or purpose" and "dynamic obsolescence" -- have helped make the iPod, iPhone, and iPad possible.

By the early 1920's General Motors realized that Ford, which was now selling the Model T for $290, had an unbeatable monopoly on low-cost automobile manufacturing. Other manufacturers had experimented with selling cars based on an image and brand. (The most notable was an ad by the Jordan Car company.) But General Motors was about to take consumer marketing of cars to an entirely new level.

General Motors had turned the independent car companies acquired by its founder Billy Durant into product divisions. But in a stroke of genius GM transformed these divisions into a weapon that Ford couldn't match. With the rallying cry "a car for every purse and purpose," GM positioned its car divisions (Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac) so they would cover five price segments -- from low-price to luxury. It targeted each of its brands (and models inside those brands) to a distinct economic segment of the population. Chevy was directly aimed at Ford -- the volume car for the working masses. Pontiac came next, then Oldsmobile, then Buick. The top-of- the-line Cadillac offered luxury and prestige announcing you had finally arrived at the top of the conspicuous consumption heap. Consumers could announce that their status had improved by upgrading their brands.

GM had one more trick to make this happen. Within each brand, the top of the line was just a bit less expensive than the lowest priced model of the next expensive brand. The goal was to convince the consumer to spend that little bit more to trade up to a more prestigious brand.

8: If So Many Funny Ads Are Sexist, What Ads Do Women Like?

Answer: Ads that feature humor without victims. Bridget Brennan, the CEO of Female Factor and the author of Why She Buys, told us that "humor without victims ... is just how women like their humor served up." Like this spot from Kia:

9: What's the First Advertisement Ever?

Answer: Depends on what you mean by "advertisement." Historians place the first printed ad (for a prayer book) in 1472, and the first newspaper ad (a reward for lost horses) in the mid-17th century. But it was 5,000 years ago that the ancient Babylonians identified some of their most important buildings with clearly written words. This doesn't sound like a terribly savvy act of marketing, but calling attention to a thing is the very definition of advertising. After all, the word we use comes from the French advertir: to call attention.

><

This article available online at:

http://www.theatlantic.com/business/archive/2011/11/9-questions-we-answered-about-ads-brands-and-marketing/247696/