I just listened to a pair of podcasts (Freakonomics link here and here) that present some academic research trying to answer the question, Does advertising work? Or would companies be better off just saving their money? The verdict: it doesn’t really work, there may be a bubble, but probably we’ll all continue doing it anyway.

(Full disclosure; I spent a number of years in graduate school studying for a PhD in Accounting, and taking way too many psychology and economics classes. I have both a love and a hate for academic research of this kind.)

The most interesting research finding for me was this: for incremental TV advertising, a 100% increase in ads result in 0.1% increase in sales. So, should you continue with TV advertising? Maybe. Maybe not. But at least it should be purchased extremely judiciously.

Moving over to the internet, (which seems to exist in large part as a result of advertising in many cases,) brand keyword advertising seems to be a waste of money for the individual advertiser. According to the podcast, experiments suggest other keyword searches are also basically useless, unless you can reach people who are not already your customers. So if you already have customers or communities, the communications are not particularly effective. Kind of like preaching to the choir, but that is who the algorithms think you want to reach. But for someone who doesn’t know you, paid outreach can be useful. They likely won’t be seeing it though.

As to volume and location of advertising placements, it seems that beyond generating basic brand awareness, TV and online advertising has very limited impacts on sales.

Another piece of information discussed included this book. Tim Hwang believes there is a digital advertising bubble because of all sorts of limitations of cookies, over-exposure, and people’s general tendency to ignore all online ads. (It reminded me of how my 85 year old father hits mute every time a commercial comes on the television because he ‘hates the noise’.) He finds similarities between the internet advertising processes and the sub-prime situation prior to 2008, hence his conclusion that it is all set for a meltdown any day now.

Perhaps there is a bubble. Maybe it will burst. Maybe brand development requires advertising even if it doesn’t translate into sales in any sort of linear fashion. Maybe marketing companies are just good at selling ads to companies and it really is all snake oil.

Let’s assume that people are intelligent, complex people that are subject to all sorts of pressures and influences. People do buy things and believe things and donate to causes because it brings them satisfaction or solves a need, at least in the moment if not in the longer term. (Listen to this podcast about Tiktok influencers if you really want to get blown away about where people put their dollars.)

So where does this leave all of us trying to communicate with our communities? Or trying to make social change, as many of Sunshine Creative Agency’s clients are? In my opinion, advertising targeted to trigger emotions (sadly often insecurity, fear and self-doubt in the mainstream) might trigger action initially, but the manipulative and inauthentic messages are quickly seen through, resulting in buyers’ remorse, disengagement and rejection. We are all sufficiently sophisticated to allow us to ignore media built on insincerity and shallow consumerism, at least once you’re past the age of 25 or so.

Sunshine Creative works to unlock the feelings and emotions driving an organization, because we believe that is where the energy lies. We also believe that anyone who can identify and share their core story in an honest and genuine manner will become an organization their community can identify with and want to support.  It is only by sharing this honest energy that authentic, meaningful connections can be made. We then showcase this energy in our communications and products, translating the authentic, meaningful connections into action and engagement.

How does the research above shape our activities? The purpose of our work is not to ‘sell’ a product or service, but to make the connection in the minds of people between yourself, your organization and the product and/or issue and/or environment that you naturally occupy. Anything less will be quickly identified as insincere and ignored, and anything more is a waste of resources. (Of course this gets into channel and distribution and so on, but more about that elsewhere.)

In the meantime, try to identify those times when you feel energy and authentic emotion as a result of what you’re experiencing with your eyes and ears. This is when a connection is being made that is significant and memorable. It feels so much better than the alternative.

Thanks and take care,

Linda