Let’s
take a deeper dive… and explore the reasons marketing and advertising efforts
are failing
Reason #1
Not Knowing How To
Reach a Target Market
Advertisements can change the way individual’s
view products. For example, businesses are always trying to find ways to
connect with women since they make 85% of all brand purchases. However, nearly
60% of all women will perceive an advertised product negatively, if it clutters
their web viewing.
Even the most subtle techniques are seen. Nearly
2/3 of consumers believe advertisers should not be able to use online tracking
to match advertisements to their website usage or interests and 2/3 also view
this practice as an invasion of privacy. Their disapproval is directed at the
companies using this advertising method.
Ad agencies don’t always get it right… Choosing
the wrong partner can be costly. Palm, Inc. worked with its long standing ad
agency Modernista to promote their new line of smart phones, Palm invested $35
Million in marketing the new phones but in the end reported a net loss of $22
Million.
Reason #2
Paying More For Less
ROI
In 1980, businesses collectively spent $53.5
Billion on advertising, and in 2007, that increased to more than $279 Billion. Businesses
are spending more and more for advertisements that are less effective.
Let’s say a company hired a specialist to
generate leads through E-mail advertising. The cost of 100 leads would be
$8,385. Now, let’s look at the actual conversion rate of those 100 leads. 2
people bought the product/service which means it cost $4,192.50 to acquire each
new client. Was it worth it?
Experts have discovered there are two main
sources for the majority of wasted advertising. Advertising the wrong message
accounts for $30 Billion annually, and having the wrong timing accounts for an
additional $20 Billion.
Reason #3
Ineffective Brand
Strategy
Industry experts have identified the top three
branding mistakes as follows: Inconsistent Corporate Identity, Poor Visuals,
and Lack of Brand Controls.
When trying to manage a brand, companies often
focus more on their intentions for the brand without adopting the
consumer’s viewpoint.
For example: Cadbury spent over $32 Million
rolling out a new campaign with the intention of promoting the rich smooth
qualities of their chocolate bars. Customers came into contact with huge stacks
of candy bars in the stores. The Cadbury logo was emblazoned everywhere and customers
bought candy bars at 2 for 1 pricing during the promotion.
Rather than receive the message that the
chocolate bars were uniquely smooth and rich, customers viewed the product as a
mere commodity. Although there was a huge surge in demand during the promotion,
there was a sudden drop once the promotion ended. The message did not get
through!
Many companies confuse their audience by using
different logos and taglines. Constant change leaves people unsure of who they
are dealing with and what type of service they will receive.
No branding control is costly and
irresponsible! By allowing every department to make branding decisions you
jeopardize the integrity of your brand and create additional expense for the
company. The choices made by unqualified buyers may be putting your company at
risk.
Brand Managers need to govern the use of your
logo and advertising messages and approve all purchases in order to: ensure
branding success, maintain brand integrity and minimize the risk for the
company.
Reason #4
Public Relations
Disasters
The number of incidents reported to the
Consumer Products Safety Commission has been increasing at a rapid rate. Despite
the risk of litigations and bad PR, companies continue to source their
promotional product needs to overseas third party vendors they know little
about.
Consumer safety incidents that involve
promotional products can lead to a lack of trust from clients as well as
litigation. The following examples show companies that thought their
promotional advertising campaigns were on track.
- The
California State Health Department gave away promotional lunch boxes in a
campaign to promote healthy eating. The lunch boxes were found to contain
high levels of lead. This prompted an embarrassing recall of nearly
300,000 lunch boxes.
- In a
promotion for the movie Shrek Forever After, McDonald’s sold collectible
glasses for $2 each. They were forced to recall and refund 12 Million
glasses. The glasses contained cadmium, a poisonous metal that can cause
kidney and liver failure.
- Nissan
recalled nearly 87,000 coffee mugs that it had given to customers in Japan
as part of a promotion. The mugs contained lead-laced paint that exceeded
the legal limits by 30 %. Nissan did not even know the identity of the
manufacturer in China.
- As a
promotion Reebok gave a charm bracelet with the purchase of every pair of
children's shoes. Sadly, a child swallowed part of a bracelet and later
died of lead poisoning. Reebok settled with the family of the child for an
undisclosed amount and had to recall 500,000 bracelets.
According to US
health officials the bracelets were 99% lead. Reebok said they were
manufactured by a contractor in China, and they did not know how the bracelets
reached the market with such high risk levels.
There are a number of reasons why public
relations disasters occur in promotional advertising, but topping the list are
these 7 reasons:
1.
Focusing on the promotion and not
on the consumer relationship
2.
Cutting cost in the wrong places
3.
Not building safety management
into contracts
4.
Using multiple disjoined vendors
5.
Not knowing the supplier
6.
Using Vendors that don’t know their suppliers
7.
Purchasing items online and not investigating their overseas
manufacturers
Even financially capable companies that have
the resources to manage things properly, often don’t
The result of these challenges…
•
Businesses
are not connecting with their targets
•
Billions
of dollars are being wasted
•
Brands
are being forgotten
•
Liabilities
are ruining brand reputations
•
Businesses
need to rethink their strategies before it’s too late
