Has Adtech Bamboozled Marketers?

Has Adtech Bamboozled Marketers?

Adtech Companies Have Blinded Marketers With Complexity and Techno-babble. It’s Time for a Reality Check.

NEW YORK, NY — Have marketers lost touch with reality? According to Bob Hoffman, author of Marketers Are From Mars, Consumers Are From New Jersey: Digital Advertising and Other Delusions, they’re operating under some highly questionable assumptions.

Mr. Hoffman believes that marketers should be more skeptical and question everything that the ad business has come to accept as fact because people, masquerading as “experts,” have led us down the garden path. The problem with experts is that they get a free pass, according to Hoffman. They go to conferences, talk to the press, write books and articles, make profound and confident statements—but no one ever goes back and follows up on them.

“I’ve stopped believing advertising and marketing experts. I don’t care what their credentials are, and I don’t care how many awards they’ve won. If they don’t have the facts, and they can’t explain them to me simply, in jargon-free English, I’m skeptical,” said Mr. Hoffman at Advertising Week in New York in September.

Before working in advertising, Mr. Hoffman spent time as a science teacher, including one year as the special assistant to the executive director of the California Academy of Sciences. “One of the things that being around science and scientist taught me was a healthy respect for scientific method. Scientists have to go through years of experimentation and peer review before an idea of theirs is accepted. After years of scrutiny, if their results hold up, they can say they actually know something. Knowing something, it turns out, is completely different from thinking you know something.”

Marketers today have been blinded by complexity and techno-babble, and according to Mr. Hoffman, they’re confusing complexity with diligence. Technology is changing the advertising business, but despite all of the hype generated by adtech companies, technological change has not affected the purchasing habits of the average consumer.

According to Hoffman, we have largely overstated the value of mobile and social media, and grossly underestimated people’s attachment to traditional purchasing behavior. For example, if you believe all of the hype pumped out by the mobile marketing industry, you would think that everyone is buying goods and services on their smartphones, but nothing could be further from the truth. Only 1.6% of consumer purchases were made on a smartphone, according to the latest data from the U.S. Department of Commerce. The same data revealed that only 6.5% of retail purchases occurred online, the other 93.5% happened inside physical retail locations.

Consumers are basically simple creatures with straightforward needs and easily observed behaviors, says Hoffman, but complexity has disconnected marketers from the behavior of average people. For example, most people still go to the grocery store a few times a week, we still go out to eat, and we still buy cars from car dealers. But marketers have been trained to not think in simple terms because they’re afraid they won’t be taken seriously.

“Thinking simply has been beaten out of us. You can’t be taken seriously in any marketing or advertising organization if you suggest that the bulk of consumer behavior is perfectly obvious. You can’t advance your career by speaking plainly and asserting that the reason most people buy most stuff is simply because it’s tastier, prettier, cheaper, works better, or is more readily available. That kind of thinking just won’t cut it in today’s world of professional complexity,” says Hoffman.

The Three Delusions

Blinded by complexity, brands continue to march forward under the delusion that they understand consumer behavior. Mr. Hoffman calls these the three delusions: The brand delusion, the digital delusion, and the age delusion.

“Many people in our business believe that consumers are in love with brands, that consumers have “brand experiences and relationships,” and they’re personally engaged and want to do some form of storytelling and co-create with brands. It’s very touching, but unfortunately it’s a bunch of bullshit,” say Hoffman.

Marketers have spent billions of dollars encouraging people to join the conversation about their brands, but if you go on social media you will see that no one is having conversations about brands. Only 7 in 10,000 (.07%) of Facebook users ever engage with a brand, according to Forester Research, and on Twitter the number is even lower, only 3 in 10,000. Even worse, these numbers reflect social media users who have self-identified as brand followers, not the general population.

According to a new study by Nielsen, consumers are not clicking on online banner ad or engaging with brand on social media. Only one-10th of those participating in Nielsen’s study said they have clicked an online ad, and even fewer said they have liked, tweeted, or commented about a product or store on social media.

We’ve all heard how the digital revolution was going to change everything, and on some levels it has. The advertising business has gone digital, our work is digital, our communications are digital, and our expertise is also digital, but according to Hoffman, we also assume that everyone else is living on the same digital plane that we are, and this has led marketers to the digital delusion.

There have been several headlines recently about the decline of television viewing, but consumers are watching just as much television as ever. Digital media is supplementing, not supplanting, traditional television. “In the first quarter of 2015, 96% of all video viewed in the US was done on a television, only 4% was done on a mobile device. People spend far more time with traditional TV than they do online or on a mobile device, and despite all the hysterical headlines about cord cutting a study released this month by Leichtman Research Group reported that 83% of US households still subscribe to pay TV. Viewing patterns are changing, but TV isn’t dying, and Millennials are watching just as much TV as ever,” says Hoffman.

Interactive online advertising was also supposed to change everything, but according to Hoffman that too hasn’t happened either. Consumers have no interest in interacting with advertising.

“The only time they interact with advertising is when they’re searching for something, other than that, they run away from it. Online display ads have a click-through rate somewhere around 8 in 10,000. This is not interactivity; this is the absence of interactivity. The idea that this same consumer, who is frantically clicking her TV remote to escape from advertising, is going to gleefully click her mouse to interact with a display ad? This is going to go down as one of the biggest marketing delusions of all time. What’s just as bad, among the few online interactions that do occur, an alarming number are fraudulent,” said Hoffman.

Tracking and micromarketing by adtech companies has stolen our privacy, spied on our every move, lied about our security, and wasted our data plans. Advertising technology has slowed down the Internet, people are fed up, and according to Hoffman, the ad business is in for a big change. Adtech is heading toward a big ugly crash, and it’s going to take a lot of publishers down with it.

“I wrote the following in 2013 on The Ad Contrarian: As far as I’m concerned it’s a house of cards. I never make predictions, but online advertising is a train wreck waiting to happen. Sadly it’s starting to look as if I may have stumbled on the truth. Through a combination of greed and arrogance, the online advertising industry is facing the greatest crisis of its young life. Consumers are in revolt. A lot of hardworking, well meaning people are likely to be hurt by the venal, greedy behavior of a part of our industry that’s out of control,” says Hoffman.

Everyone believed in the potential of online advertising, but potential has nothing to do reality. Online advertising hasn’t created any actual value. To prove this point, Mr. Hoffman suggests that every marketer should walk up and down the aisles of their local supermarket and note how many brands were built using only online advertising. You would have a very short list.

“Where are the big consumer-facing brands that have been built by online advertising? Sure, there are some big web-native brands such as Amazon, Netflix, and Google that online advertising has built, but how about the vast majority of brands that don’t live on the Web? Where are the beers, and the soda, and the appliances, and where are the food and snacks that were built by online advertising? Traditional mainstream media such as outdoor, television, and radio have built thousands of successful, consumer-facing brands across hundreds of categories,” says Hoffman.

Finally, marketers need to examine their beliefs about age. Marketers are youth obsessed and neglecting older consumers. According to Hoffman, this is nothing but narcissism disguised as strategy. People over 50 are the most valuable generation in the history of marketing, according to Nielsen, and they are responsible for almost 50% of all consumer spending.

“People over 50 control about 70% of the wealth in the US. Do you really think it’s a good idea to ignore these people? And yet, people over 50 are the target for only 10% of marketing. We have invented all kinds of bullshit for why we ignore people over 50, but the real reason we ignore them is that we hate them. We like the excitement of youth, not the boredom of middle age. We can’t build ourselves a hot advertising career by talking to old farts, and consequently, we have invented all kinds of convenient baloney to justify our malpractice. The whole science of marketing is based on finding the most relevant message and delivering it to the most probable buyer, except when it comes to people over 50. Then all the rules are suspended because these people don’t count,” says Hoffman.

Now we have the facts. Technology didn’t kill advertising. Technology didn’t kill television. Interactivity hasn’t changed everything. “Why are we still living with these ridiculous ideas? Marketers should give themselves the freedom to be skeptical,” says Hoffman. “We have all been operating on unreliable principles and fanciful delusions that have been sold to us by people who have been wrong over and over. Go out and dig up the facts for yourself and draw your own conclusions. Nobody is smarter than the facts.”

 

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