Advertising does not create demand. But it can help you harvest it.

Here's another controversial topic -- advertising does not create demand. Most advertisers and marketers think ads create demand. In my studied opinion, advertising does not create demand; it helps to harvest it. This is a subtle but important point. And it may change the way you think about digital marketing and marketing overall.

Think about this example, no matter how much advertising the "milk council" does, a family can only physically drink 4 quarts of milk every week, so they won't buy a 5th quart of milk no matter how many ads they are bombarded with. Advertising does not create demand. But it can help one advertiser harvest the demand instead of another -- i.e. which brand of milk the consumer chooses to buy. There's no practical or functional difference between the brands of milk, but if for example one brand articulates the bone-health and fitness benefits of milk, it will harvest the demand from fitness-conscious consumers over a brand that does not articulate those benefits via ads. Note that the product actually has to back up the claims, otherwise the claims are empty claims as so much of advertising is today.

A look back at the early days of "digital"

I've been doing marketing for over a quarter century now, and in the early days of "digital" it was seen as a fringe alternative to mainstream, traditional advertising like TV, print, radio, outdoor, etc. This was how the departments were set up too. Traditional TV advertising was done in a different department than digital marketing; and sometimes digital marketing was done by the website team. Not optimal, of course, in hindsight. It was as if digital marketing and traditional advertising were on opposite sides of the grand canyon (slide below).

But instead of "traditional versus digital" I used the analogy of baseball -- pitching AND catching. You can only play baseball with BOTH pitching and catching. The analogy means that traditional one-way advertising channels are really good at pitching -- i.e. "getting the word out" and driving awareness. Digital is really good at catching -- i.e. harvesting the demand. If you think about modern consumers' habits, when they are inspired by something they saw in a TV ad, print ad, bus stop ad, etc, they go online or on their devices to search for more information. So, good marketing is about maintaining this balance between pitching and catching. I realize that to this day (2022) major advertisers still have departmental silos and budgets split between different teams and departments so they literally cannot do marketing holistically. But small and medium businesses can. Read on.

In the early days of "digital," budgets were not allocated properly, because far too much was still spent in "pitching" tactics and not enough on "catching" tactics. Advertisers would do mucho TV ads, but their websites, content, social presence, etc. were anemic and weak. When users searched for them after seeing the TV ad, they ended up not finding anything useful, finding a competitor's content, and perhaps even buying the competitor's product. This was because the advertiser did too much advertising (pitching) and didn't have sufficient tactics to harvest the demand. In the following funny example, an AT&T TV ad during the Olympics caused sales for audiobook provider Audible. Audible harvested the demand; as you can see in the slide below, sales of two specific titles spiked during that week when AT&T was airing the very expensive TV ads. Of course this "problem" was not just AT&T not doing sufficient harvesting, it was also that their creative was not clear; consumers literally thought it was an ad for Moby Dick and Odyssey (this is on the creative agency).

A look at today's digital, yeah it's 2022 and it still sucks

Sadly, the pendulum has swung way too far to the other side now. In 2022, more than 50% of worldwide advertising budgets are spent in digital. And digital marketing in 2022 is just as bad, but for a different reason. Today, in digital channels, far too much budget is spent on display ads, video ads, CTV ads, etc. Advertisers apparently brought their "TV ad mentality" into digital -- i.e. reach and frequency. They think that the more ads they show to more people more often, the more sales they can get. They also still think advertising creates demand. It doesn't. Advertisers are severely neglecting the "catching" part of marketing baseball. They put out all these ads, and when humans are inspired by the ads and search for further information, there is nothing for them to find. There is no useful content on their sites or social channels, just more useless marketing-drivel; and there's a lack of helpful reviews on Amazon, etc. The awareness ads (display ads, video ads, CTV ads) inspired the user to look further; but there was nothing to help the advertisers harvest the demand, like useful content, explainer videos, answers to frequently asked questions, etc.

Here's a RARE, shining example of what DID work; it worked because the advertiser had useful content on their site, YouTube, and social channels. All of this helped them answer my missing links efficiently and harvest my demand (the "catching" part); I bought the Hurom instead of a competing product or a cheaper equivalent. https://www.dhirubhai.net/pulse/slow-digital-marketing-like-juicing-works-better-dr-augustine-fou/

So how should a marketer think about media mix budget allocations and selection of tactics? Read on.

A framework, plus scenarios, to think about media mix and selection of tactics

While I was teaching digital strategy at New York University and Rutgers University, I developed and refined the framework in the slide above, with the help of my students. We have long used the purchase funnel to think about different stages of the customer journey -- from awareness, consideration, and choice, to purchase and loyalty/advocacy. I turned the funnel on its side and mapped it to advertising tactics, both traditional and digital. If we compare traditional (green shaded area) to digital (blue shaded area), traditional ads are more "awareness like" (left side of the slide) That means they are very good at generating awareness. Digital, however, is more "performance like" (right side of the slide) which means it is closer to harvesting demand. Again think of consumers' habits. When they see a TV ad and get inspired by it, they go online to look up further information. That's where digital comes into play -- the "catching" part. You must have sufficient content in digital to harvest the demand, otherwise your ad spending on awareness goes to waste. It may even drive sales for competitors. Then if we expand digital (blue bar at the bottom of the slide), the tactics within digital can also be arrayed from left-side branding (display and video ads) to right-side performance (search ads and CPA).

How does a marketer decide how to allocate their dollars to improve outcomes? Let's look at a few scenarios to help us decide.

If the product is a brand new product and no one knows about it (and the advertiser is big enough to afford TV advertising) they can allocate budget to awareness driving tactics like TV, print, and radio. Their primary marketing need is awareness. And traditional offline tactics like TV ads (including Superbowl ads) are great at driving mass awareness. They just need to make sure they do sufficient catching in digital, so they harvest the demand; otherwise someone else will, like the AT&T and Audible example above. If the advertiser were a small or medium business that cannot afford TV, they should focus on the left side of the digital tactics blue bar at the bottom of the slide -- i.e. use awareness-generating digital tactics like display and video ads. Again, if the product is brand new — e.g. a DTC (direct to consumer) brand — and the primary need is awareness, use display ads and video ads (left side).

However, if the product or brand is already well known, but something else is keeping users from buying more of it, advertisers should allocate more budget to mid-funnel activities such as paid search and organic search (content creation). Remember that useful content that helps customers answer their “missing links” and get further along their customer journey will help advertisers more efficiently harvest their demand. If your organic content does not yet “rank” in natural search results, pay for some paid search to get customers to your sites and content. Over time, when your SEO (search engine optimization) kicks in, you can spend less and less on paid search ads. The focus should be on mid-funnel tactics because you don't have an awareness problem. The problem you have is "missing links" - the bits of information, or the answers that prospective customers need answered, before they are willing to buy. Allocate more budget to answering missing links (e.g. content) rather than to awareness ads like display ads and video ads. That will make your ad spend more efficient at harvesting the demand.

Finally, we can also use this framework as a general guide for which tactics to choose based on the nature of the product. If it is a simple, low-cost, low-consideration product like “soup or soda” awareness tactics are likely the best option. Just make people aware or remind them so they think of your brand right before they are ready to buy. If it is a more complex, bigger ticket item like “cars and computers” then more budget should be invested in the mid funnel on “decision-support” tactics that help customers get to the purchase, and choose your brand when they purchase, as efficiently as possible.?Modern consumers tend to do more research before they buy bigger ticket items. You investments should help them along this part of the journey.

Of course these are generalizations, and there are endless variations and exceptions that may be possible. But consider it a framework and a guide for those who need a place to start. As practitioners, the idea is to start somewhere, and refine from there. Nothing should be set in stone; and everything should be treated as test and learn and optimize.?

If you've stuck with me thus far, the above may be useful for thinking about media mix and which tactics to use. The following is meant to help you think about what bits of information your prospective customer needs so they can make their own way along their own "customer journey."

https://www.forbes.com/sites/augustinefou/2020/08/28/marketings-missing-link (if you run up against the paywall, let me know, I have a copy I can send you)

Please let me know what doesn't make sense and what does make sense. And if you put any of this into practice, please let me know what worked for you or what didn't work. There are different scenarios, external constraints, product types, etc. that make the application of these ideas more nuanced in practice than the generalized theories above. I look forward to learning from you all, and your hands-on experiences.