Category: Advertising

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Why Advertise Here?

cocacolla.jpgSo we’ve decided to take some advertising. Now that we’ve disclosed what we’re going to do with the ginormous revenue stream, no doubt other ads are on the way.

Now in my view, you should absolutely click through to our advertisers’ webpages. It will help make this site better, and it doesn’t cost you much time. But I have the nagging suspicion that click-through rates for most blogs are quite low. So, why would rational businesses spend their marketing budgets here?

There is some literature on this problem. The answer seems to be something called the “exposure effect.” As John Timmer explains:

There is a long history of experiments that show that repeated exposure to a stimulus that’s barely perceptible can enhance a person’s feelings towards what’s otherwise a neutral object. These feelings can include a liking or more subjective things such as “fame, truth, duration, loudness, stimulus brightness and darkness.”

Timmer is summarizing the findings from Xiang Fanget al.’s An Examination of Different Explanations for the Mere Exposure Effect, in which the authors noted that banner ads are a great candidate for increasing brand strength. They tested the hypothesis, and found that

“repeated incidental exposures to banner ads resulted in increased perceptual fluency without increasing recognition. Consistent with past research, we found increased perceptual fluency to be accompanied with more positive evaluations of the ad but not with negative evaluations, suggestive of a positive affect.”

Thus, the article tartly notes that a “practical implication of this research is that online advertisers might be placing excessive emphasis on the click-through rates—the primary metric for measuring the effectiveness of online ads. Our results suggest that even when there is no overt sign of effectiveness, such as recognition or click through, the banner ads may still impact ad liking.” Even more interesting, from the perspective of some who might be worried about overkill, “consumers tend to have a relatively high level of tolerance for repeated exposure to banner ads—the wear-out effects of banner ads did not kick in even after 20 exposures in this experiment.”

I’ve got to say that I find this research both fascinating and frightening. On the one hand, it hooks into my total persuasion hypothesis. On another, it suggests an inefficiency in the market for online advertising dollars, which allocates money based on click through rates. Perhaps as this research is replicated, that inefficiency will dissipate. What metric for online advertising’s efficacy is on the horizon? Change in Q-Scores?

(Photo Credit: Wikipedia Commons).

The Marketized Epistemology of Not-so-Random Ads

Via Brian Leiter: Scholars including Michael Fischl and Angie Littwin are disturbed by the Google-served ads that appear next to their papers on SSRN. Littwin states:

I would strongly prefer not to have ads for credit cards running next to my paper arguing for major changes in the credit-card market. And that subject-matter mismatch will often be the case.

The ads raise a number of interesting issues addressed by both Leiter and Lipshaw commenters. On the one hand, I agree with Hal Varian’s point that marketing in general can create a great deal of value by connecting people to products in unexpected ways.

On the other hand, I think it’s important to realize who is permitting these “potential rebuttals” and who is not. Many have called for a “norm of trackback” on newspaper editorial pages that would give some small platform to critics of their contents. But it’s not really catching on. By and large, the people who will have to give a “right of reply” to critics (via served ads) are people that can’t afford to run their site without such funds.

So though we’ve gotten a bit beyond Liebling’s old bromide “freedom of the press belongs to one who owns one,” inequalities of influence persist in unexpected ways. The credit card companies can easily afford to saturate served ads with their content by, for example, bidding up the price of adwords like “loan” or “luxury splurge.” I very much doubt Prof. Littwin could buy her way onto the MBNA site….though ISP-inserted advertising might provide a way around that.

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Hillary Taps Into Soprano America

Hillary Clinton’s featured in a new video playing off the Sopranos closer. It’s fun to see Bill and Hil acting, and there’s a nice guest appearance to boot. Remember Bill playing his sax on Arsenio Hall? These guys understand that you need to position yourself in the true American heartland – TV – if you want to connect with voters.

Watch it here. (You’ll have to pass through a fund-raising machine to get there.)

2

Appropriating “Organic”

It appears that the titans of the food industry are having their way with the USDA and the feds may soon approve a list of 38 non-organic items that may be included in foods marked “organic.” All of this interesting regulatory play is inidicative of the fact that organic foods finally hit the big time, and thus became worth of Big Food’s attention. We see a several different things happening here.

1. The public is becoming more concerned about the contents of its foodstuffs.

2. With more interest in organic food, Big Food decides to buy into to the industry.

3. Once bought in to the industry, making money off of the public’s (perhaps legitimate) fear of the current foodsupply (that Big Food created and aggressively markets), industry immediately sought to make organic foods cheaper, more attractive, or tastier (or perhaps all three) by adding non-organic ingredients.

4. With its meaning diluted (and I’m not taking a position on whether this dilution is meaningful – whether these 38 ingredients make items more or less healthy), the term organic may slowly lose its value as an indicator that a food product is distinctively more natural.

5. This will open new opportunities for creative small food marketers to create new language signifying the concept that “organic” once conveyed.

In the end, Big Food is simply doing with “organic” what it does with so many of the food products it markets: taking the underlying item (usually things like wheat, but in this case the word organic), processing it until it is a first cousin to its natural state, and serving up this not-quite-real but plenty alluring product to a waiting public.

Is this an example of markets working? Or of the vices of regulation? I’ll leave that question for people who actually spend money on this stuff. And I’ll have a Snickers and a Coke.

4

Politics, Private Space, and Total Persuasion

persuasion.jpg

A lunch today with a colleague at another school, coupled with an article in the Wall Street Journal, has brought me to back to a topic I blogged about back in January: Total Persuasion. As I suggested, there are analogies to be drawn between the government’s defunct secret possibly ongoing program to gather reams of information about its citizens and corporations’ desire to grab consumer mind-share by every persuasive avenue possible. Indeed, we’re rapidly approaching a time when it will be exceedingly difficult for the law to draw lines between advertising and not-advertising; between fraud and persuasion; and between censorship and consumer protection.

These claims are easy to overdraw, so let me give you an example and a theory to help set the stage for the discussion. In today’s Journal, John McKinnon has a interesting article about Sara Taylor’s decision to leave her job as the White House’s political director to join the private sector. Taylor is an expert in microtargeting, a marketing technique developed by corporations to segment their consumer markets by mining data to learn more about the structure of consumer’s preferences. According to McKinnon, microtargeting was “honed” by political operations to “more effectively zero in on voters’ emotion triggers,” and uncover groups of voters that are susceptible to future efforts. Taylor sees a “big future” for taking such political lessons back to the corporate world by “helping corporations focus on potential customers’ . . . feelings about buying a product or service.”

There are some roadblocks in this prosperous path, as the article points out. Most salient, businesses are “more constrained in the claims they can make” than politicians, presumably by the law of fraud (in its various guises). But there is a solution to this problem: encourage consumers to make their own persuasive advertising by creating “social networks around products and brands . . .” In the future, we should anticipate that such social persuasion will become an increasingly prevalent aspect of corporate marketing efforts, just as politicians have worked to co-opt social networking sites for their own ends.

Why? Because consumers have fewer defenses to social persuasion, and aren’t cynical about it yet. Moreover, social persuasion is probably less subject to legal sanction in the general case (indeed, it may be immune under circumstances where the same language if spoken by the corporation would be actionable). It is also, obviously, cheaper to produce. The downside (loss of control over message) is probably something that corporations will learn to live with. (I thank my lunch companion for pointing this problem out to me!)

What’s wrong with a society in which most speech that you hear is designed to persuade you to consume? When framed that way, some might immediately respond: nothing! After all, no one is being compelled to any particular purchase. If the consumer market is efficient, and consumers had a taste not to consume, wouldn’t savvy marketers satisfy the taste with a unpersuasive campaign? (The idea is silly on its face, but isn’t it sort of what Saturn and Berkshire Hathaway were/are up to?) Even assuming that the consumer product market is somehow irrational, marketers would presumably compete to satisfy whatever inefficient desires are extant.

But I doubt that market rhetoric is going to provide satisfying answers to whether the law should work to hinder a total persuasion society. I haven’t fully thought this issue through, but my starting point is an essay by Jonathan Franzen called Imperial Bedroom, in his book How to Be Alone. Franzen attacks privacy advocates for focusing on privacy as just problem of being from free from others’ (corporations, the government, space aliens, the U.N., etc.) prying eyes and grasping hands.

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Stanford and Cal Cooperate over Big Game

As a loyal Stanford alum, I don’t think I ever thought I’d see the day where Stanford and Cal would link arms over The Big Game. Thank goodness for the NFL, which has applied for a trademark on “The Big Game,” a title that has been applied for many decades to the annual football game between Stanford and Cal.

I’m hardly the first to think that the NFL’s behavior is ill-advised and heavy handed. A quick Google search turns up blog after blog making fun of the NFL’s behavior. That having been said, I’m curious…..Is there anyone other than NFL counsel who’s out there supporting this behavior or the asked-for result?

The NFL’s explanation is that they want to stop people from piggy-backing on the goodwill of the Super Bowl — you know, selling TV’s for “your big Super Bowl party.” In the story linked to above, the NFL says it sells sponsorship rights to Samsung, and suggests that the value of those rights would dissipate if they didn’t get the trademark. I’m a little surprised that someone isn’t defending this outcome as “correct” because it allows internalization of all social value from the Super Bowl to the NFL, thereby giving the NFL the proper market signal to invest in putting on its annual extravaganza. Perhaps I’ve missed it? Heaven knows I don’t read the whole blogosphere. Or, has the NFL taken us past the limits of the “internalize all externalities” policy?

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Best and Worst Internet Laws

[Preface: I’ve already overstayed my guest visit, but before I go, I want to say thanks to the Concurring Opinions team for the opportunity to blog here, and thanks to all of you for the great comments and stimulating dialogue. A complete index of my guest blog posts. Meanwhile, I’ll keep blogging on technology and marketing law at my main blog and on all other topics at my personal blog. Hope to see you there!]

Over the past dozen years, the lure of regulating the Internet has proven irresistible to legislators. For example, in the 109th Congress, almost 1,100 introduced bills referenced the word “Internet.” This legislative activity doesn’t always come to fruition. Still, in total, hundreds of Internet laws have been passed by Congress and the states. This body of work is now large enough that we can identify some winners and losers. So in the spirit of good fun, I offer an opinionated list of my personal votes for the best and worst Internet statutes in the United States.

[Keep reading for the list]

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Thoughts on Marketing

Inspired by Ellen Goodman’s fascinating article on “Stealth Marketing,” here are two random thoughts on ads and such during this frenetic shopping season.

First, from the Economist, on the relevance of postmodern theory to modern business:

Modern retailers are only just getting to grips with two of the consequences of the breakdown of authority and hierarchy that [pomo theorists] hoped for half a century ago: the “fragmentation” of narratives and the individual’s ability to be “the artist of his own life”. Modern business uses a different language to discuss the same ideas. In “The Long Tail”, an analysis of the impact of the internet on the music industry, with wider ramifications, Chris Anderson describes the “shattering of the mainstream into a zillion different cultural shards”. The post-modern “fragment” becomes a “niche” and the mass market is “turning into a mass of niches”.

This is a bit abstract, but I highly recommend reading Clotaire Rapaille’s The Culture Code to see how it works in action. Rapaille uses extremely simple narratives to get at the subconscious wellsprings of consumer behavior.

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Scentvertising, Bubbles, and the Battle for Mindshare

colonel.jpgI serendipitously encountered two bellwethers of commercial culture today. The WaPo looks at retailers’ increasing use of fragrances to enhance consumers’ moods. Is this effort to get people in a buying mood a bit like subliminal advertising? Some unexpected nuisance issues arise:

The American Lung Association has received several complaints about scented stores, spokeswoman Janice Nolen said. The fragrances have triggered flare-ups for asthma sufferers and those sensitive to certain chemicals. “I don’t want to sound like the Grinch,” Nolen said, but “sometimes these fragrances can be a barrier to people.” Evelyn Idelson . . . is one of them. She first noticed that her laundry detergent was scented. Then her dishwashing liquid. Now, she said, everything smells. “I can’t stand it,” she said. “I think it’s an invasion of personal space.”

The California Milk Processor Board has responded to such complaints, removing ads that smelled like cookies. “Taunting [the obese] with the smell of off-limits cookies was just cruel, they said.” Given the parlous state of many Americans’ finances, perhaps Debtors’ Anonymous should launch a similar campaign for all luxury goods.

But then again, we’d never say the same thing about images of products, would we? Perhaps it turns out that scent is more visceral than sight:

“You smell a rose, and your brain doesn’t go, R-O-S-E,” said Charles S. Zuker, a researcher with the Howard Hughes Medical Institute. “Your brain recalls what a rose is like.” Daniel Lieberman, an associate professor of psychiatry at George Washington University, called smell the most “primitive” of the senses. Odor receptors in the nose are actually brain cells, he said.

So I suppose scent is in a category of its own.

But for those frustrated with all-pervasive commercial culture, there is another alternative: self help. Harvard’s Berkman center recently had a panel on “culture jamming,” including many leaders in cyberactivism. I was intrigued by Ji Lee’s bubble project, which encourages renegade “taggers” to scrawl commentary, in bubbles, on ads:

Our communal spaces are being overrun with ads. . . . Once considered “public,” these spaces are increasingly being seized by corporations. . . . Armed with heavy budgets, their marketing tactics are becoming more and more aggressive and manipulative. The Bubble Project is the counterattack. . . . Once placed on ads, these stickers transfom the corporate monologue into an open dialogue.

I suppose many will deem the Bubble Project illegal art, or mere graffiti, and may even think Ji guilty of inducing copyright infringement. But I think it’s worthwhile hearing his side of the story, and thinking about the ways in which ordinary citizens can try to avoid (or undermine) a barrage of commercial messages. As Hannibal Travis notes, there is a “battle for mindshare,” whether we like it or not.

PS: This is a very interesting disclaimer from the FAQs of the Bubble Project:

Q: Is it legal to place bubbles on top of ads?

A: No, it’s illegal. It’s consider[ed] vandalism to deface any public or private message. If you are caught, you may be subject for fines and even get arrested. You figure it out on your own. I’m not responsible for your actions.

Art Credit: Aric Obrosey, The Symbolic Lotus of a Thousand Colonels [Sanders]

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When Will Skadden Finally Get Its Own Stadium?

I love that the Utah Jazz has sold their stadium naming rights to Energy Solutions, a nuclear waste storage company. The Times reports a series of great nicknames that savvy Salt Lake sportos have suggested for the facility. The Tox Box. The Glow Bowl. The JazzMat. And of course, my own personal favorite, Radium Stadium.

We have become so accustomed to commercialization of just about everything that this story, while humorous, is entirely plausible. And that’s lucky, because it’s true. I wonder if a stadium naming opportunity can be created for any legit company in America. How about Jack Daniels Stadium or the Marlboro Center? (If these names don’t play in Utah, perhaps they’d work in a place like Chicago.) Perhaps Howard Dean should have ponied up some cash and taunted Jazz fans by renaming the place Democratic National Party Hall. (Would locals derisviely call it the Dean Dome? And if t-shirt makers emblazoned souveniers with the motto, could Carolinians sue?)

Which all leads nowhere, except to ponder whether law firms will ever get into the biz. Surely Skadden, Arps would benefit from having the firm’s name surface regularly on NBA-TV and ESPN. I’m convinced there are some great nicknames a law-firm-titled stadium could generate, but for now I’m somewhat stumped. MoFoField just doesn’t knock my socks off. Anyone have suggestions?