The Fall of Advertisting & The Rise of PR: Chapter Summaries
Part 1: The Fall of Advertising.
Advertising has always suffered from a lack of credibility. An advertisement is the opinion of a company whose motives and judgment are not the same as those of a consumer. Advertising tries to make up for its limitations by massive media expenditures. The emphasis has been on impact rather than on communications.
Over the past few decades, three developments have seriously undermined the effectiveness of advertising in general. One is the increasing costs for any individual advertisement. The second is the increasing volume of advertising. And the third is the expansion of advertising media to include almost every available opportunity to influence a consumer. (From ball games to bathrooms to blimps).
This triple combination has seriously eroded the effectiveness of all advertising programs, including those of the largest spenders. For four years in a row, from 1997 to the year 2000, General Motors was the largest advertiser in America, spending $13.2 billion on advertising. In those four years, General Motors' share of the U.S. automobile market dropped from 32.1 percent to 28.1 percent.
Other big advertisers, including McDonald's, AT&T, Nike and Coca-Cola have had similar records. Big budget don't necessarily produce big sales or profit increases. In response to its critics, the advertising industry has tried to divorce itself from a focus on effectiveness to a focus on "creativity" and "awards."
The role of advertising, according to many of its defenders, is not to sell anything, but to capture the prospect's attention. No advertising has gotten as much attention as the Budweiser campaign, "Whassup?" The Whassup? campaign has won more awards than any other advertising program in advertising history, including the Grand Prix for TV and Cinema at Cannes.
Advertising Age reported the euphoria that erupted when the Cannes award was announced: "The half-dozen spots from DDB Worldwide, Chicago, for Anheuser-Busch's Budweiser beer were so widely popular with festival goers that during screening audience members were still shouting the infectious catchphrase two categories after alcoholic drinks ended."
"It was fresh and amusing, and everyone fell in love with it," said one TV judge. "It took about 5 minutes to decide and was almost 100%."
The following year, Budweiser won a Bronze Lion at Cannes for "What are you doing?" a yuppie spoof of the Whassup? campaign. And August Busch IV, Anheuser-Busch's vice president for marketing was named Advertiser of the Year for Budweiser campaigns' "outstanding and consistent quality Éover the past few years."
Wait a minute, did "Whassup?" or "What you are doing?" sell any Budweiser beer? As a matter of fact, U.S. sales of Budweiser beer (in barrels) have fallen every year for the last decade, from 50 million barrels in 1990 to less than 35 million barrels in the year 2000. Whassup, Budweiser?
Part 2: The Rise of PR.
Advertising builds brands is the claim of the advertising industry. The American Advertising Federation, for example, is running an ad campaign with the theme, "Advertising. The way great brands get to be great brands."
Yet virtually all of the new brands recently created have been PR successes, not advertising successes. To name a few: The Body Shop, Starbucks, Red Bull, Amazon.com, Yahoo!, eBay, Palm, PlayStation and BlackBerry. Anita Roddick built The Body Shop into a major worldwide brand without any advertising. Instead she traveled the world on a relentless quest for publicity.
Until recently Starbucks didn't spend a hill of beans on advertising either. In ten years, the company spent less that $10 million on advertising, a trivial amount for a brand that delivers annual sales of $1.3 billion today. Starbucks, on the other hand, received an enormous amount of favorable publicity.
Wal-Mart became the world's largest retailer, ringing...
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