Unpacking The Horrific Math of Facebook Advertising

Adweek is reporting on a study by Webtrends that shows that the performance of advertising on Facebook, which was astonishingly bad in 2009, has gotten worse in 2010. The average click-through rate has fallen from .063% to .051%.

Let’s think about what that means. To get a single person to click on a Facebook ad, 2,000 people must be exposed to it. If all 500 million people on Facebook were exposed to an ad, it would net just 250,000 clicks. Put another way, if your ad were seen by a group of people the size of the combined population of the United States and Brazil, it would be clicked on by a group the size of the population of Chandler, Arizona.

Webtrends’ study covered 11,000 ad campaigns and 4.5 billion impressions. All together, 4.5 billion impressions generates a total of only 2.25 million clicks. That’s not much to spread around among all the brands clamoring to advertise on Facebook. In fact, when you divide this number up among the 11,000 ad campaigns, each one averages an embarrassing 205 clicks. I don’t know of too many brands–or for that matter too many corner dry cleaners–for whom this type of performance is acceptable.

Yes, yes, of course, Mark Zuckerberg and his pals will protest that click-throughs aren’t important on Facebook. They’ll tell you brands benefit from Facebook’s “social value,” not its ability to drive traffic. I give them full marks for this, if only because it must be extraordinarily difficult to say such things without giggling when they know that ad spending on Facebook is projected at $2.19 billion in 2011.

Don’t misunderstand me. I’m not saying Facebook is completely without value for brands, but I am saying advertising on Facebook is damned close to it. Agencies that want to deliver value to their clients have an obligation to go beyond ads. They have to think harder and invent ways to be genuinely engaging. Forsman & Bodenfors in Gothenburg, Sweden did it brilliantly for IKEA, leveraging the basic photo tagging feature of Facebook in a way no one had ever thought of before. Presumably, clients who can do small amounts of math will demand comparable thinking.

Photograph © Jason McELweenie

The Moral Dilemma of (RED): What To Do When You Know Your Donations Are Being Stolen

The Associated Press is reporting that as much as two-thirds of some of the grants given out by the Global Fund to Fight AIDS, Tuberculosis and Malaria–the charity supported in part by Bono’s (Product) Red initiative–is being pocketed by corrupt government officials. So bad is the situation that Sweden, one of the fund’s largest contributors, is suspending its $85 million annual contribution until the problem is addressed.

The news is unsurprising to anyone who has followed the history of celebrity-backed efforts to ease the misery of Africa. We know, for instance, that the Ethiopian thug Mengistu Haile Mariam swiped millions of dollars donated by western do-gooders at Live Aid and used it to finance the army that was inflicting harm on precisely the people the charity was intended to help. Other examples are legion.

This raises a moral dilemma for brands that participate in (Product) Red. Do they ignore the breathtaking corruption and accept it as the cost of doing business in Africa’s kleptocracies? Can they in good conscience urge consumers to buy products with the promise that part of the profits will go to charity without disclosing that an even larger part of the profits may go to purchasing cars, motorcycles and other playthings for dishonest bureaucrats, as it did in Djibouti (to name but one example)?

There is no doubt that some people have been helped by (Product) Red. Nor is there any question that all decent men and women wish to alleviate the suffering caused by AIDS, tuberculosis and malaria. The thorny issue is this: Does the charity, by allowing billions of dollars to be stolen, actually prop up the bad governments that are largely responsible for the plight of their people in the first place? How many hospitals have not been built, how many pharmacists have no drugs to dispense because a crooked health minister wanted  a Mercedes-Benz, because a dictator wanted his own Versailles?

Ten Charmingly Mean-Spirited Quotes on Statistics and Data

Within advertising agencies on five continents, statisticians and data jockeys have made significant progress in their attempts to swathe themselves in the garments of infallibility. Even so, anything more than a cursory glance reveals that their backsides are, just like ours, hanging out and exposed to the same vicissitudes of climate and circumstance.

Occasionally this space is given over to those who have deftly humbled the hubristic ad men of the globe with sharp words. This thrashing we all should endure from time to time as penance for having chosen to worship at so disreputable an altar. Today the space is given over to those who would puncture the brightly colored balloons of statistics and data. I give you ten charmingly mean-spirited quotations that will–it is to be hoped–restore a modicum of–skepticism to the thinking of marketers everywhere:

“An unsophisticated forecaster uses statistics as a drunken man uses lamp-posts–for support rather than for illumination.”  – Andrew Lang

“If your experiment needs statistics, you ought to have done a better experiment.”  -Ernest Rutherford

“In ancient times they had no statistics so they had to fall back on lies.”  – Stephen Leacock

“Not everything that can be counted counts; and not everything that counts can be counted.”  – George Gallup

“Don’t be buffaloed by experts and elites. Experts often possess more data than judgment. Elites can become so inbred that they produce hemophiliacs who bleed to death as soon as they are nicked by the real world.”  – Colin Powell

“A statistician is a man who comes to the rescue of figures that cannot lie for themselves.”  -Abraham Maslow

“Satan delights equally in statistics and in quoting scripture….”  -H.G. Wells

“The average human has one breast and one testicle.”  -Des McHale

“Statistics are human beings with the tears wiped off.” – Paul Brodeur

“When I told Jerry that eighty percent of all accidents happen within a mile of the home, he said, “that settles it, we’re moving.” – Barth Gimbel (Martin Mull) recounting a conversation with his sidekick Jerry Hubbard (Fred Willard) on Fernwood 2 Night.

Maybe Your Customers Don’t Want A Relationship With You

"Customer Effort Score" is a better indicator of likelihood to make additional purchases than either Net Promotor Score or Customer Satisfaction.

Much oxygen is wasted inside advertising agencies in this, the age of social media, bloviating about the desirability of using technology to build relationships between brands and consumers. Few stop to ponder the possibility that consumers don’t want a relationship.

This thought, however, has occurred to Matthew Dixon, Karen Freeman and Nicholas Toman. They’ve written a provocative article in the Harvard Business Review called “Stop Trying To Delight Your Customers” (sorry, you may have to trade some personal information to read it for free). Their argument, which is backed up with some lovely statistics, is that exceeding the expectations of consumers is not nearly as good a way to increase purchase intent as simply removing the bits from your interaction with them that consumers consider to be an ass-whipping. People don’t need (or even want) to feel all a-tingle every time they come in contact with a brand. They just don’t want to be battered about the head and shoulders–either online or in person–to get something done. The key metric is the Customer Effort Score, which, as you have doubtless already ascertained, measures the energy a consumer has to put into dealing with a company. Lower is better.

If you doubt this, think about how an industry like banking has changed. Technology has made it possible to accomplish almost any banking task at the time and place of our choosing. Convenience used to mean a branch on every corner. Now it means an ATM in every convenience store and an app on every smart phone. I would go so far as to say that any time you have to go inside a bank today, the “relationship,”–such as it is–has failed.

One mistake brands (and their agencies) consistently make is overestimating the importance of the role they play in the lives of consumers. Most brands are bit-players in our life stories–and maybe just extras. That being said, I’m not suggesting that delighting consumers is never a good idea. Sometimes it will be the only idea. But what I am suggesting is that we need to be more discriminating about when and where we do it. Marketing devolves into brute noise when everything we do is calculated to bludgeon with pleasure.

The Apple iPhone and the elusive image of branded love

Last week as I watched one news report after another showing hundreds of people lined up outside Apple stores across America, all of whom hoped – or perhaps it would be more accurate to say needed – to be among the first to get the new iPhone in their pink, sweaty hands, it occurred to me that this, at least from a corporate standpoint, is what love looks like. These people were willing to suffer for a product in a way that few people in the twenty-first century are willing to suffer for a cause. For a brand, it really doesn’t get any better.*

Very few brands will ever sniff the thin air that surrounds this mountaintop. Nonetheless, it’s important to know it exists because it reminds those of us who toil within advertising’s smoky factories of what what we’re supposed to be trying to achieve. As agencies focus more and more on the arcane sciences of data analysis, ROI measurement and predictive modeling, it’s easy for advertising to begin to feel like something that’s akin to strip-mining. Don’t let it. If you’re doing it right, it’s about love. It’s about generating passion for the brands you work on. It’s about tapping into visceral desire.

So how do you get there? How do you “ladder up” (an odious bit of corporate English) to a more emotional connection between the consumer and the brand? With apologies to the great American philosopher Frank Zappa, I have borrowed and altered slightly a few phrases from a song called “Packard Goose”** (it should be noted that the lyrics owe no small debt to a T.S. Eliot poem called “The Rock”–seriously)  to remind us of our obligation to elevate the brand grist we are given and turn it into something that arouses passion:

Data is not information.

Information is not knowledge.

Knowledge is not wisdom.

Wisdom is not truth.

Truth is not beauty.

Beauty is not love.

Love is the only thing that matters.

When one ponders these words, it’s apparent that they’re a pretty good re-telling of the Apple story. The company has taken  a bunch of ones and zeros and through a bit of sorcery transformed them into products that do extraordinary things – things for which people will leave their loved ones and the comfort of their overstuffed sofas to stand sweating with the faithful in the heat of summer. May the rest of us one day be so lucky.

* For causes, I grant you, it is a bit disheartening.

** You may find Mr. Zappa’s original lyrics here.

The Destruction of Community and the Rise of the Fan Club

Via the miracle of YouTube, I spent the last hour or so watching a lecture the late Neil Postman gave in 1998 at Calvin College in Michigan. In it he brought up a compelling idea (actually dozens of them, but here I’ll just focus on one) about how technology has changed our definition of community. Traditionally, communities have been united by broad commonalities (e.g., geography, culture, history, etc.) even as the individual members of the communities differed on many particulars. Indeed, the trick of making a community function was for the individual members to find a way to work around their differences and disagreements to create a socially cohesive unit. Take away the negotiation and compromise on the points of difference and the points of commonality would not be strong enough to hold the community together.

Yet when we talk about communities in the age of interactivity, we often mean something very different. More often that not we are referring to a group of people who are in near total agreement on a particular topic. Because technology makes it easy–indeed almost effortless–to create new communities, people who find themselves in any sort of disagreement in an existing community need not work through their differences. They can simply start their own community where they do not have to put up with the annoyance of dissent. This may seem like a dream for a marketer who will benefit from gathering together a group of people who are deeply loyal to a brand, but a community it is not. It is a fan club. (Indeed, in its political incarnation it can become something much more troubling–a walled compound of people who would rather enter into an infinite loop of mutual affirmation than engage in honest and thoughtful debate. Insert your favorite–or least favorite–cable news network here.) Remember that the word fan comes from “fanatic”–a person with extreme and uncritical enthusiasm or zeal.

But my purpose here is not to talk politics; I leave that for a different time and a different blog. In the age of social media, marketers throw around phrases like “online community” as if we all agree on what they mean. I submit to you than we don’t. As more and more brands venture into the interactive space, the ones who succeed will be the ones who are honest with themselves about whether they are looking to create a community or a fan club. Uncritical enthusiasm may seem appealing, but ultimately stronger brands are built on the support of those who see our warts and want to help us heal them.

Billion-dollar ad agencies versus twelve-dollar branded content

One of the warnings I give clients (as well as bright-eyed creatives) who wish to produce “branded content” for the interactive space–they typically have in mind some sort of video that they hope will catch fire and become part of the popular culture–is that they must understand they’re not simply competing with other branded content for the attention of consumers. They’re also competing with every amateur video on YouTube that shows a guy stepping on a rake and accidentally hitting himself in the nuts.

Clay Shirky’s recent post, “The Collapse of Complex Business Models,” does a nice job of explaining why big organizations struggle to react to the threat posed by cheap, low-quality competition:

In the mid-90s, I got a call from some friends at ATT, asking me to help them research the nascent web-hosting business. They thought ATT’s famous “five 9’s” reliability (services that work 99.999% of the time) would be valuable, but they couldn’t figure out how anyone could offer good web hosting for $20 a month, then the going rate. No matter how many eventual users they assumed, $20 didn’t even seem to cover the monthly costs, much less leave a profit.

I started describing the web hosting I’d used, including the process of developing web sites locally, uploading them to the server, and then checking to see if anything had broken.

“But if you don’t have a staging server, you’d be changing things on the live site!” They explained this to me in the tone you’d use to explain to a small child why you don’t want to drink bleach. “Oh yeah, it was horrible”, I said. “Sometimes the servers would crash, and we’d just have to re-boot and start from scratch.” There was a long silence on the other end, the silence peculiar to conference calls when an entire group stops to think.

The ATT guys, part of a company so committed to the sacred dial tone it ran its own power grid, had correctly understood that the income from $20-a-month customers wouldn’t pay for good web hosting. What they hadn’t understood, were in fact professionally incapable of understanding, was that the industry solution, circa 1996, was to offer hosting that wasn’t very good.

The world of content creation is facing a similar shift. YouTube sensation “Charlie Bit My Finger” is the most viewed minute of video in the last five years (175 million views and counting). It’s an amateur production–too grand a word really, for something so simple–with no budget, yet more people watched it than all the so-called “viral” videos that agencies spent millions of dollars making. How will big advertising  compete against such bottom-dollar threats? Emulating “Charlie Bit My Finger” is not the path. The video was dumb luck, and the people who captured the moment are unlikely ever to capture anything as interesting again.

Offhand, I think there are a couple of models that could work. First, agencies could set up something like a content greenhouse in which they try to grow their own low-cost solutions. Assignments could be given simultaneously to dozens of film students (for example). (Perhaps for a different product the assignment could be given to dozens of moms.) They’d be asked to come up with branded content on a budget of essentially zero. (Think of this as the logical conclusion of Adam Morgan’s argument that if you are having trouble coming up with a great creative idea, you should cut the budget in half and start over.) Sometimes you’ll get nothing of value, but that’s OK, because you haven’t bet a million-dollar production budget on the outcome. The key to the concept is low risk, high reward. For the film students in the greenhouse, their compensation would be the popularity of the work itself, and perhaps some sort of promise of future employment. That may not be a compelling proposition for a grizzled forty-something creative director, but it could be quite appealing to an ambitious, young hoodie-wearer trying to make his way in the world.

Another possibility is that something analogous to the early days of silent film could emerge in advertising. Think about what happened in the second decade of the 20th century: Using rather crude technology, a few auteurs emerged who were able to consistently capture magic on film. No complicated special effects, no $100 million budgets. Just whatever they were able to make happen in front of the camera’s aperture. It came down to the genius of one man. Could something similar happen in advertising? Perhaps some of the agency world’s creative superstars will shed their cumbersome organizations and set up shop with a $300 camera and a couple of tungsten lights. They may even offer to produce branded content for free and be paid by the view. For the people who are really good at it, it could be the smartest business deal they ever make.

Glamor as a Tool of Persuasion

Among the most regrettable qualities of advertising professionals is their tendency not to dig deeply enough into the superficial (apologies to Andy Warhol for the slight rewrite of one of his aphorisms). We have a tendency to assume we know what words like “glamor” mean, and race off to create a television commercial that uses glamor (or its simulacrum) to sell 1,200-calorie cheeseburgers. Virginia Postrel in the Weekly Standard has written a whip-smart review of two books on the subject–Glamor, A History by Stephen Grundle and Glamour in Six Dimensions by Judith Brown–that I cannot recommend highly enough to people who are paid to sell things to other people.

Postrel debunks John Berger’s (you may remember him from his BBC series Ways of Seeing) Marxist notion that glamor boils down to nothing more than “the state of being envied” and suggests that instead glamor is “a generous quality, a sign of an open society.” But rather than attempt to summarize or improve upon what she has written (a daunting task), I’ll cite a couple of salient quotations from it to whet your appetite:

• The pleasure and inspiration may be real, but glamour always contains an illusion. The word originally meant a literal magic spell, which made the viewer see something that wasn’t there. In its modern, metaphorical form, glamour usually begins with a stylized image—visual or mental—of a person, an object, an event, or a setting. The image is not entirely false, but it is misleading. Its allure depends on obscuring or ignoring some details while heightening others. We see the dance but not the rehearsals, the stiletto heels but not the blisters, the skyline but not the dirty streets, the sports car but not the gas pump. To sustain the illusion, glamour requires an element of mystery. It is not transparent or opaque but translucent, inviting just enough familiarity to engage the imagination and trigger the viewer’s own fantasies. (Postrel)

• “The Apple tablet is the Barack Obama of technology. It’s whatever you want it to be, until you actually get it.” (James Lileks)

• When Anthony Patch, one of [F. Scott] Fitzgerald’s failed heroes, learns that “desire cheats you,” he refers to a phenomenon we now recognize as the power of glamour: “It’s like a sunbeam skipping here and there about a room. It stops and gilds some inconsequential object, and we poor fools try to grasp it—but when we do the sunbeam moves on to something else, and you’ve got the inconsequential part, but the glitter that made you want it is gone—.” We may demand the sparkling surface, like a cellophane coating, yet what we are able to grasp will be of little consequence. Glamour wields the power to capture its viewers’ attention as if by a spell that fascinates and arrests. .  .  . Transfixed, one gazes at a world of possibility that is foreclosed, inaccessible, yet endlessly alluring. (Judith Brown)

I encourage you to read the full article, then go forth to your next client meeting where you’ll be able to wield glamor with wisdom and terrifying precision.

Think Superficial. Cesar Chavez and a Bitten Apple Logo.

“I am a deeply superficial person.” -Andy Warhol

“Deeply superficial” comes close to being a perfect description of advertising. What matters about an ad is not its subtleties and hidden details; it’s what the great mass of people who are only half paying attention take away from it. Close analysis is irrelevant, unhelpful and fruitless.

Richard Rodriguez, in an article in the Wilson Quarterly about Cesar Chavez, the founder of the United Farm Workers Union, now widely considered something akin to a saint for his struggles (including hunger strikes) against the exploitation by big agriculture of the Mexican immigrant workers who harvest most of our fruits and vegetables, suggests that the creators of a famous Apple campaign that featured Chavez perhaps weren’t superficial enough. Somehow in an ad that was intented to be deadly earnest, they missed the clanging irony of their simple layout:

[In 1997] executives at the advertising agency TBWA/Chiat/Day came up with a campaign for Apple computers that featured images of some famous dead— John Lennon, Albert Einstein, Frank Sinatra— alongside a grammar-crunching motto: THINK DIFFERENT. I remember sitting in bad traffic on the San Diego Freeway and looking up to see a photograph of Cesar Chavez on a billboard. His eyes were downcast. He balanced a rake and a shovel over his right shoulder. In the upper-left-hand corner was the corporate logo of a bitten apple.

Wow.

“Think Different” has been lauded as one of the great advertising campaigns of our time. Maybe it is, if you don’t think about it too hard, but I have always struggled with the idea of associating a product, something that anyone with a credit card can buy (even a product that I love as much as an Apple computer) with Ghandi, with Martin Luther King, Jr. and, yes, with Chavez. One must “think different”–and not in a good way–to fail to see the hubris in that.

How Audi’s Super Bowl Spot Changed What Cars Stand For

Audi’s Super Bowl spot, in which the “Green Police” harass ordinary citizens who do not comply with the laws of authoritarian environmentalist state (one that bears some resemblance to every major metropolitan area in America), was a viewer favorite. In fact, it was one of the few spots during the game I found mildly entertaining. But what was most interesting about it was its radical redefinition of the semiotics of the automobile (I use “semiotics” in the sense that Roland Barthes did–i.e., the study of signs and symbols in language and systems of communication).

Mark Steyn explained the shift in today’s Orange County Register:

Not so long ago, car ads prioritized liberty. Your vehicle opened up new horizons: Gitcha motor running, head out on the highway, looking for adventure … . To sell dull automobiles to people who lived in suburban cul de sacs, manufacturers showed them roaring round hairpin bends, deep into forests, splashing through rivers, across the desert plain, invariably coming to rest on the edge of a spectacular promontory on the roof of the world offering a dizzying view of half the planet. Freedom! But now Audi flogs you its vehicles on the basis that it’s the most convenient way to submit to arbitrary state authority.

Just so we’re clear, I think conserving our natural resources is a splendid idea. I yield to no man in my admiration for Theodore Roosevelt and John Muir. Yet a part of me–a deeply American part–weeps at the idea that  the traditional meaning of the automobile has slipped through our fingers. The meaning that was epitomized by driving 110 mph across West Texas, burning 100 octane, steering with your foot and not giving a damn what anyone thought about it.

If we’re to believe Audi–and a lot of people seem to–the days when your car was a symbol of liberty and independence are over. In the words of Mark Steyn: “Resistance is futile. You might as well get with the program.”