ADVERTISING: LESS COULD BE MORE

There have been reports recently indicating that the National Football League (NFL) has seen a significant drop in television viewership. There may be many reasons for this decline – popularity of streaming services, alternative programming, distraction caused by the current election season, viewers turned off by players kneeling down during the rendition of the national anthem, injuries and/or suspensions of star players, etc.

For me, the commercial interruptions have been a huge turn-off. How many more insurance company ads do I need to see to retain brand information? How many more celebrities can they sign up to pitch products and services about which these celebrities probably know less than most of us do?

 I have long been skeptical about the return on investment on this surfeit of commercials, especially the ones that feature celebrities, and of course those much talked about Super Bowl commercials. They may yield brand exposure but do they generate a significant number of new and sustainable customers?

Based on a 2014 study by the research firm Communicus and quoted by Ad Age, the answer is no; 60 percent of the Super Bowl ads they tested did not increase purchase or even the intent to purchase. Now, to be fair, there are many other factors that contribute to the lack of effectiveness of these commercials but the point remains that these advertisements represent an extraordinary allocation of resources.

Here is the list of the Top 10 advertisers in the United States in 2015, compiled by Ad Age. Together, just these ten companies spent $29.30 billion.

? Procter & Gamble ($4.3 billion)

? AT&T ($3.9 billion)

? General Motors ($3.5 billion)

? Comcast ($3.4 billion)

? Verizon Communications ($2.7 billion)

? Ford Motor ($2.7 billion)

? American Express ($2.3 billion)

? Fiat Chrysler ($2.2 billion)

? Amazon ($2.2 billion)

? Samsung ($2.1 billion)

There are close to 40 companies that spend over $1 billion annually on advertising. The top 200 advertisers spent a record $142.5 billion in 2015. Only about 50 countries in the world have a higher GDP than that number.

Now, if these Top 10 advertisers would be willing to redirect say 10% ($2.93 billion) of these expenditures towards measurable and significant socially desirable outcomes wouldn’t that generate far greater exposure and goodwill, and potential sales increase?

A good starting point for them would be to look at reputable rankings of charities and, based on these rankings, pick the ones that have both the widest reach and the most efficient operations. For example, if they used Forbes magazine’s recent rankings of charities, they would find among the largest 5 charities 2 that have close to 100% rating on the measure called Charitable Commitment (a measure of how much of the funds raised go directly to the intended charitable purpose), and a wide footprint.

These 2 charities are: Feeding America (Ranked #3) and Task Force for Global Health (Ranked #4)

? Feeding America is a nationwide network of 200 food banks and 60,000 food pantries and meal programs that provides food and other services. Its network makes it the nation’s leading domestic hunger-relief organization. In 2015 this network distributed more than 4 billion meals to people in need. It provides food assistance to an estimated 46.5 million people in the United States annually – including 12 million children and 7 million seniors. It is funded almost exclusively from private sector sources. Support comes from financial and in-kind donations.

Its 2015 budget was $2.06 billion

? The Task Force for Global Health consists of eight programs focused on neglected tropical diseases, vaccines, field epidemiology, public health informatics, and health workforce development.  Its list of donor partners includes the U.S. Government, the World Health Organization, and a bunch of charitable foundations, corporations, and non-governmental agencies. The Task Force also receives substantial in-kind contributions from 2 major pharmaceutical companies. Its focus is international.

Its 2015 budget was $1.66 billion

Imagine re-directing the $2.93 billion (10%) from the total ad budgets of the Top 10 advertisers towards supporting either of these organizations. An alternative approach would be to pick a larger group of smaller but efficient charities, or to pick a group of charities all focused on a related cause.

The Public Service Announcements (PSAs) developed and popularized by the Ad Council offers an encouraging model. These campaigns are all created from donated services and media time. The production costs are financed by the Federal Government or non-profit agencies. These campaigns have all had measurable and significant positive impact. Remember some of the classics like “Friends Don’t Let Friends Drive Drunk”, “A Mind is a Terrible Thing to Waste”, and “Smokey Bear”?