Another article title with blasphemy in it, I know.
My new boss, Max, likes to treat me really well - partly because he's a very nice guy and partly because he probably believes that investing in me will result in more Marketing Qualified Leads for Silverbird.
One of the early treats I received was a trip to Warsaw for a workshop led by Harvard Professor Frank Cespedes. As you can expect with a professor from Harvard, the delivery of the workshop was captivating (very hands-on and practical, too).
At some point in the workshop, he suggested that we read "Confessions of an Advertising Man" by David Ogilvy, saying that the Don Draper character was influenced by him. I love me a Mad Men reference so I instantly tapped away at my phone and ordered it before he even finished his sentence.
Later on, we were discussing Customer Acquisition for one of the startups featured in the case studies, when he said that "the tech community likes to take longstanding concepts, slap a new title on them and treat them like brand new. We always talked about how much we spend to acquire a customer, but now we say CAC (customer acquisition cost) to try and sound cool".
I've found the above concept to be true on numerous occasions, but I did not expect it to be validated from an advertising book written in 1962. “Confessions of An Advertising Man” is surprisingly relevant to today's client-agency relationships and attitudes inside advertising as a whole.
The thing that really surprised me though, was Ogilvy's performance marketing mindset. Sounds crazy? Read on.
13 Quotes that prove that David Ogilvy was, in fact, a performance marketer
Ogilvy was heavily influenced by Direct Response Copywriting - and criticised the lack of performance accountability in the advertising industry. While he was in the business of building great brands, he was firm in his belief that advertisements should drive action. In other words, he was observing a false dichotomy between great advertising and advertising that sells:
"The curious thing is that the techniques which work best in "direct" advertisements are seldom used in ordinary advertising - like giving factual information about the product. If all advertisers were to follow the example of their direct response brethren, they would sell more. Every copywriter should start his or her career by spending two years in direct response."
"The problem is that advertising agencies, notably in Britain, France, and the United States, are now infested with people who regard advertising as an avant-garde art form. They have never sold anything in their lives. Their ambition is to win awards at the Cannes Festival. At best they are mere entertainers, and rather feeble ones at that."
"I have produced my share of advertisements which have been remembered by the advertising world as "admirable pieces of work" but I belong to the third school, which holds that a good advertisement is one which sells the product without drawing attention to itself. It should rivet the reader's attention on the product. Instead of saying, "What a clever advertisement," the reader says, "I never knew that before. I must try this product".
He deeply understood acquisition mechanics. He knew discounts work for the short-term and recognised the danger of brands getting addicted to them.
"Andrew Ehrenberg of London Business School reports that a cut-price offer can induce people to try a brand, but they return to their habitual brands as if nothing had happened."
"Why are so many brand managers addicted to price-cutting deals? Because the people who employ them are only interested in next quarter's profit."
"Price-off deals are a drug. Ask a drug-addicted brand manager what happened to his share of the market after the delirium of the deal subsided. He will change the subject. Ask them if the deal increased his profit. Again, he will change the subject."
Even though Ogilvy created great ads, he would state that the core conversion pillar was the product's promise, and that creative followed suit, not the opposite. That’s the same concept as us considering the offer as the cornerstone of performance, ranking it as the most important factor above the creative and landing page:
"What really decides consumers to buy or not to buy is the content of your advertising, not its form. Your most important job is to decide what you are going to say about your product, what benefit you are going to promise. The selection of the right promise is so vitally important that you should never rely on guesswork to decide it. At Ogilvy, Benson & Mather, we use five research techniques to find out which is the most powerful.”
He was actually advocating for and practicing testing! Actually scratch that - he even said TEST EVERYTHING. Given the constraints and the sophistication needed to set them up, it's fair to say he'd put his contemporary counterparts to shame with his testing prowess.
"The most important word in the vocabulary of advertising is TEST. If you pretest your product with consumers, and pretest your advertising, you will do well in the marketplace. Twenty-four out of twenty-five new products never get out of test markets. Manufacturers who don't test-market their products incur the colossal cost (and disgrace) of having their products fail on national scale, instead of dying inconspicuously and economically in test markets.”
(The case of Tropicana losing $30M in sales on a packaging redesign back in 2009 failing to test is enlightening)
“Test your promise. Test your media. Test your headlines and your illustrations. Test the size of your advertisements. Test your frequency. Test your level of expenditure. Test your commercials. Never stop testing, and your advertising will never stop improving."
He’s even going exactly into the “how” he conducted those tests:
“Another technique is to prepare a series of advertisements, each built around a different promise. We then mail the advertisements to matched samples and count the number of orders procured by each promise.”
“Another technique is to run pairs of advertisements in the same position in the same issue of a newspaper, with an offer or a sample buried in the copy. We used this artful dodge to select the strongest promise for Dove toilet bar. "Creams Your Skin While You Wash? pulled 63 per cent more orders than the next best promise.”
Just like your typical performance marketer, he would never pause a winning ad before it stopped performing.
"If you are lucky enough to write a good advertisement, repeat it until it stops pulling. You aren't advertising to a standing army; you are advertising to a moving parade. Three million consumers get married every year. The advertisement which sold a refrigerator to those who got married last year will probably be just as successful with those who get married next year."
He’d allocate budgets based on performance - and keep the efficiency of the spend top of mind:
“If your brand generates less than $2,000,000 a year for advertising, do not attempt continuous national advertising. Pull in your horns. Concentrate what money you have in your most lucrative markets, or confine your advertising to one income group. Or give up advertising completely. I hate to admit it, but there are other roads to fortune.”
Why does this matter to us?
Obviously, the marvel of David Ogilvy’s work far exceeds the term “performance marketing”. The fascinating thing, and the true learning here is that Ogilvy’s clients benefitted from an approach that was results-oriented, with terms like efficiency of the spend being central to the client-agency relationship. That’s how he helped build the amazing brands he did - he didn’t achieve it despite that focus.
Indeed, he was in the business of playing long-term games for his clients’ brands. He built commercial outcomes that were reflected on their earnings and market share:
“Every advertisement should be thought of as a contribution to the complex symbol that is the brand image.”
(Cody Plofker, CMO of Jones Road Beauty calls that brand-first performance marketing).
So why is this all relevant to us today?
1) It’s an important refresher of the fact that while our habits have changed, the way we consume media has changed, the human brain and therefore the marketing fundamentals haven’t. Next time you hear about the next “revolution” in marketing or the “new approach that changes marketing forever”, take a step back and question what you’ are hearing.
We’ve seen this play out a few times the past decade. My favourite one is arguably the “Marketing is over, it’s now all about Growth”. As if marketing historically was about… stagnation.
2) It’s a nice wake-up call about branding vs performance advertising being, indeed, a false dichotomy. There are brand marketers who are resistant to any hint of sales copy - thinking that it’s a compromise they make for the short term and that it’s actually harmful to the brand. Knowing that David Ogilvy, out of all people, said that most advertisers should start their career in Direct Response to understand how to sell in order to apply the learnings in their campaigns, should be enough to dispel that myth. Imagine shifting your thinking towards ensuring your performance advertising is effective so that it powers your brand building.
We, as an industry, need to stay away from Shiny Object Syndrome, and focus our efforts on building value that has long-term potential. It was always true, but the overreliance on tracking had masked this. The iOS14 developments and the future of the industry in that regard are making it obvious again.
As for me, I’ll be following up my reading with “How Brands Grow” by Byron Sharp and “The Long and The Short of it” by Binet & Field to further improve my understanding around this topic. Oh, and catch up on the Vexpower.com courses to better understand Marketing Mix Modelling. Thank you, Professor Cespedes, for the inspiration.
Thank you for sharing Michael. We need more of your essays
Great piece, thanks for sharing. Beside this brilliant analogy, do you recommend reading the book?