Monday, February 7, 2011

Advertising for IndyCar Nation 101: Lesson 1

An interesting debate began to wage earlier today when Paul at More Front Wing publically pondered at his site whether $9M would be better spent on three Super Bowl ads or Sponsoring a couple cars in the IICS. Then on twitter broke out a flurry of tweets about situational pondering whether this was better than that and whether bigger was better and what exactly happened back in the Chevy tent back in the day and then someone bum rushed the scene with their new buzzword ROI and all hell broke loose.

The most famous quote in advertising goes like this “I know that 80% of my advertising budget is wasted, the problem is I don’t know which 80% it is…” and even though that was said over 80 years ago it is a truth that remains. I personally think that rule applies to Super Bowl advertising as well as it does IndyCar sponsorship. But I am not really interested in joining the fight as far as who is right who is wrong nor what is a waste and what isn’t (but in the end I do, Hypocrite!). I have some exerience here and I just thought I’d spend a few posts talking about some key concepts and then perhaps you all can decide what you think about the effectiveness of various marketing investments the next time a new sponsorship package is announced or the big game is played. And word to the wise - I got sleepy and wandered quite a bit at the end of this first installment....I'll try to do better next time.

Lesson 1 – The Purchase Funnel.

Back when advertising and marketing research began, it was initially populated by a posse of seemingly out of work Psychological researchers. At the time Psychology seemed to posit that rationality carried sway in people’s lives and that every decision made was the result of some overly painful rational decision chain that governed personal behavior. When it came to a consumer’s decision to purchase a product the decision was mapped out into a series of cognitive consideration levels, hence the Purchase Funnel was created. Since the advent of neuroscience, pretty much most everything that was ever thought about decision processes pre 1980’s has been debunked, rationality tossed to the curb and now subconscious Emotions rule the day in psychology and advertising. But the Purchase funnel remains and provides a workable, if occasionally flawed, guide to understanding human decision making and how marketing and advertising can strategically target portions of the decision chain.

Step 1 – Awareness. No one will buy a brand if they are completely unaware of its existence. The first step than any brand must do to sell anything is make sure that consumers know they exist and are an option for fulfilling a need the consumer may have.

Step 2 – Consideration. Consumers may have a list of brands that they know offer products or services for needs they are aiming to fulfill, But they will only consider a subset of these brands to actually purchase from. This trimming of options is based on whatever information they have available to them about each brand. Marketing messages, WOM, prior trial or external reviews.

Step 3 – Trial. Consumers take their consideration list and make a selection as to which brand or product they will actually purchase. The relative value of the products in the consideration set have been evaluated across the benefits, features and costs and a decision is made. For higher priced products, this tends to be a hands on decision that requires some touching, feeling, discussion with another human being or elaborate fact finding research. For products with little financial or relationship commitment … not so much … whims can rule the day here.

Step 4 – Repeat Purchase. They like it the first time so they do it again. Enough said.

I have spent most of my career working the last two levels of the funnel, though in recent times I am spending more time at the front. Admitting a personal Bias here…I think most companies waste money in the top half of the funnel that would be better spent on the bottom half, but the advertising industrial complex and its posse of mini skirted sassy mouthed ad execs are a powerful force against which many a corporate victim has succumbed.

Lets take a look at the steps of the funnel and how ad placement at the Super Bowl or IndyCar might fit in.

Awareness – if no knows who the hell you are and either you intend to sell to everyone or you cannot tell the people you want to sell to from those you don’t (gotta be carefull not to jump the shark on lesson two: targeting) then size matters. The biggest audience is the best audience. There is no audience bigger than the SuperBowl and unlike other events that might pull a big number, the audience is strangely fixated on the ads as much as the content. No other event can claim that half it’s audience watches the ads and pees during the content.

SO if you are trying to introduce yourself to as many people as possible, then the big game is the way to go. A classic example was the initial “Go Daddy” commercial from 5 years ago where a buxom bimbo revealed her artificial assets to an artificial courtroom. Wham, 130M viewers sat speechless asking themselves “what the hell is a GoDaddy?” Awareness achieved, mission accomplished. A more Subtle yet effective example from this year’s crop of ads was the Motorola ad for its new Android powered Xoom tablet device. Until the moment the 1984 ad ran, the majority of the country believed the only tablet device in existence was the iPad.

So if awareness is your goal, and not having the benefit of our next lesson, do you think advertising in IndyCar is a good idea to raise awareness?

Consideration – Consideration can build from marketing efforts by informing you about a brand or by creating an affiliation with a brand that leads people to consider a brand they may have previously excluded from their consideration set. These ads can work at a rational or emotional level, extolling the virtues of features and benefits, or appealing to a subconscious emotional need that a consumer may have.

The ad that many thought “won” the Super Bowl was the Chrysler 300 spot. It was an a powerful montage of images from Detroit serving to represent the image of a bygone era of American greatness. It featured spoken prose that appealed to a countries' pride in its own craftsmanship, not just a blind empty mantra of patriotic patronage. Then it revealed its star, Detroit’s own Eninem, to the audience and wham, an entire generation for whom Chrysler was “dad’s” car was now thinking about a brand they never would have considered before. The ad worked in both the ways a consideration ad can work.

Now thinking of IndyCar and how effective it might be in moving consumers towards consideration. Would you consider a Honda if in five years of running the Indy 500 no Honda engine ever had a mechanical failure? Would you make sure that the tire garage priced out a set of Firestone “Magic Rings” before you made your final decision???

Purchase – As we have discussed prior, an important determinant in this portion of the Funnel is the price and relationship commitment. If the price is small and lingering commitment minimal, an ad might work on a subliminal level where staring at a store shelve the recency of an ad might break a tie between equals. But for big ticket items where touching, trial and experience are necessary a television ad won’t cut it.

If more beer is sold for consumption during the Super Bowl than any other televised event, then isn’t advertising beer during the Super Bowl akin to closing the corral after the Clydesdale got away? And Yes Paul I do think Bud wasted money here, not that they could have put the same money to use on the side pod of a car, rather for pennies on the $9M they could be the official beer of the 500, or Long Beach and had captive audiences of 350k or 140k sampling their product.

Guys – I am starting to doze off – humor me and my meandering lack of focus here…

In person events can also be an opportunity for people to “kick the tires” on products that consumers need exposure to in order to close the deal on purchase. If the IndyCar series could build its portfolio of events to a list of 20 events each averaging 100,000 people do you suppose that investing in a marketing tent at IndyCar events would be a viable marketing investment?

As far as repeat purchase goes…Experience trumps advertising. Period. Which gets me to what I consider to be the biggest waster of $ at the Super Bowl the past couple of years, and yes they are widely considered to be among the wittiest ads and everyone loves the spots. But I found myself craving a candy bar during the game. Afterwards I drove out and got myself a Reece’s Dark Chocolate.

1 comment:

  1. Two quick things:

    1) One correction: The Chrysler ad was for the 200, not the 300. Personally, even though that was my favorite ad by far (made me wistful for my days in the Detroit area, to be sure), it's laughable to think of Eminem driving what is basically a refreshed Sebring (the worst car I ever sat in at the Detroit Auto Show, bar none). They'd have been better off having him drive the next generation 300 and then showing Chrysler's full lineup of cars at the end. Otherwise, great ad.

    2) Very interesting thoughts from you on the entire scope of marketing. I'm not in marketing, so a lot of this is 100% new to me, but that you wrote all makes sense. Like you, when I heard about Paul's Tweet, I wondered if he could at least be on to something a little bit. Obviously, for Anheuser-Busch to drop $15 million or whatever for 5 Super Bowl ads seems like a good idea to them, and farbeit from me to tell them they're wrong. It probably is a good idea. However, I do wonder if the better idea might be to spend $9-12 million on Super Bowl ads and then the other $3-6 million on something else, like for instance, an IndyCar program or being the Official Beer of Whatever. People likely won't remember 2 or 3 of those Super Bowl ads in a week, but getting your name all over IMS for a month or all over a couple of IndyCars for 9 months sounds like it could be a more sustained presence than 2 30-second spots that get lost in the shuffle.

    Anyway, great post, JP.

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