The Real Reason Advertising Doesn't Work

There’s been much talk recently about the growing disconnect between advertisers and consumers. We are bombarded with more and more ad messages every day. Why? Because they are increasingly less and less effective. Consumers are building up an immunity, and advertisers’ only solution seems to be to just give us more and more of the same in order for us to “get high” on their drug.

A new study from J. Walter Thompson, offers more insight:

Americans do not have a particularly kind view of the advertising profession, according to a study from J. Walter Thompson. When asked about respect for the profession for the “Ad Industry Perception Survey,” only 14% of respondents say their fellow Americans respect ad people, a fraction of the 79% garnered by members of the armed forces, the 75% who respect doctors and the 71% who respect teachers.

On the plus side, ad pros are seen as a “necessary good” by 31% percent of the population, beating out politicians and car salesmen. Among the study’s other findings are that 84% percent agree strongly or somewhat that “too many things are over-hyped now” and 72% feel “there’s too much advertising [and would] support stricter limits.” A further 47% regard advertising as “background noise,” although 42% think it has improved in recent years.

“The study significantly uncovers a basic disconnect between the ad industry’s world view and that of its audience,” says the JWT report.

Cluetrain in action. It’s not that we don’t want to buy things, or that we don’t want to be marketed to at all — it’s that we don’t want to buy hype and we don’t want to be marketed “at”. We want authentic engagement.

Social networking enables authentic engagement. What does authentic engagement mean? It doesn’t mean posting slick ads. It does mean going and participating in the communities where your customers are already engaged and giving them the information that they want in order to be informed consumers. You can’t “sell” them — you can only “help them buy”.

Heather Hopkins presented a great case study on the Hitwise blog earlier this year, showing how two UK fashion retailers have been boosting their business with authentic engagement in MySpace:

When I first noticed this, I was told it was likely a result of the recent London Fashion Week. But the growth has been steady over the past 52-weeks, as the charts above illustrate.

It is also not solely a result of demographics. Miss Selfridge and New Look attract a similar demographic profile of young women, but do not enjoy the same volume of traffic from MySpace. The success seems a result of participation in the community and targeted offers. TopShop has a profile on MySpace with a blog that includes special offers and discounts. ASOS and TopShop are mentioned on several profile pages.

This offers a great example of creative brands that are engaging with their audience on the terms – and turf – of their audience.

This is what so many companies don’t get about Web 2.0: it’s not just about technology enabling social interaction around commerce. It’s a fundamental shift that purchasing and marketing is now centered on the consumer, not the producer/manufacturer.

P.S. – I’ll be talking about this next Monday at the Electronic Retailers Association Annual Convention. If you’re attending, be sure to come to the ” Increase Your ROI with New Technologies Education Session” Monday morning at 10am.