"Half the money I spend on advertising is wasted, and the problem is I do not know which half"- Lord Leverhulme 1851-1925, British founder of Unilever and philanthropist.
I'm not exactly sure when the good Lord uttered those famous words, but given he died in 1925, you can assume he said it eons ago, and it's a quote many, many marketers have bandied around since.
Okay, so if 50% of the founder of Unilever's advertising was wasted way back when, at a time when people had little or no distractions and advertising was an acceptable part of life (as it was for decades to come), what do you suppose the figure would be today?
Now, more than ever, traditional paid-for advertising is being questioned as a cost-effective method of communication. A quick recap:
- Consumers today have more choices (read: distractions) than ever before - between the internet, video games, social networking, iPods and gazillions of cable TV channels, time for traditional media outlets has shrunk considerably. Younger adults, for example, aren't in the habit of reading hard-copy newspapers and they don't watch television anywhere near as religiously as people used to, and therefore they are not being exposed to expensive paid-for advertising.
- Whereas once upon a time people blindly soaked up advertising messages without question ("aaah, the good old days..."), today they're way too marketing savvy, not to mention information-overloaded and time-poor. People's ability to block out advertising messages is finely tuned and highly effective.
- Trust in business is at all time lows, with some 74 per cent of Australians trusting business less this year than last, according to the Edelman Trust Barometer. Crucially, 87 per cent of Australians would refuse to buy from a company they did not trust, while 93 per cent said they chose to buy products or services from companies they trusted.
- The rise and rise of social media has led to an increase in peer-to-peer influence. We have always been more open to recommendations from peers (positively or negatively), but social media has just brought a whole new dimension to word-of-mouth, so much so that it's now a far greater influencer in the buying process than advertising.
All of the above comes in to play before we even raise the issue of low standards in advertising. It doesn't take Einstein to realise the majority of advertising in this country is particularly cringeworthy, irrelevant, indeed, often just plain disrespectful to the intelligence of the populace.
So my question, given we were starting off a base of 50 per cent of advertising is wasted (according to the Levermeister), and factoring in the myriad factors above:
How much of the advertising dollar is actually wasted in Australia?
A second question is: If there is so much wastage, how come many marketers are still blindly throwing money against the wall by producing (and then buying media time/space) for mediocre advertising that simply doesn't work hard enough?
I know there has been a seismic shift in the way marketing dollars are spent, with some local marketers doing some really interesting, creative and relevant stuff. But you still see evidence daily of gross wastage of money that's been flung at traditional advertising when, with a little foresight and nous, marketers could have diverted some (not all, this is not about doing away with advertising per se) of the budget towards more meaningful, relevant and cost-effective communication activities - activities that connect with people, build trust and respect. Do that, and you just might find your advertising will work much harder than ever before.
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