"How the Mad Men lost the plot", or the best op-ed on ads ever written

"How the Mad Men lost the plot", or the best op-ed on ads ever written

I can't get enough of this article/op-ed. I've read it five times now, and its conclusion goes against a tidal wave of advice I've heard in the past decade. It is backed by hard facts, however, and I can't get over how wrong we've all been for so long.

This is the highlight (but you really should read it all):

How Brands Grow (OUP, 2010), is by Professor Byron Sharp, of the Ehrenberg-Bass Institute at the University of South Australia. Most marketing books are long on airy assertion and short on rigour. How Brands Grow is the opposite. It is empirical, closely argued and, in its sober way, incendiary. Sharp marshals a vast array of evidence from many different categories — soft drinks, motorbikes, concrete mixers — and identifies universal laws of brand purchasing. To date, nobody has seriously challenged his findings, though plenty have ignored them.

Sharp’s first law is that brands can’t get bigger on the back of loyal customers. Applying a statistical analysis to sales data, he demonstrates that the majority of any successful brand’s sales comes from “light buyers”: people who buy it relatively infrequently. Coca-Cola’s business is not built on a hardcore of Coke lovers who drink it daily, but on the millions of people who buy it once or twice a year. You, for instance, may not think of yourself as a Coke buyer, but if you’ve bought it once in the last 12 months, you’re actually a typical Coke consumer. This pattern recurs across brands, categories, countries and time. Whether it’s toothpaste or computers, French cars or Australian banks, brands depend on large numbers of people — that’s to say, the masses — who buy them only occasionally, leave long gaps between purchases and buy competing brands in between.

If you work for a brand owner, the implications are profound. First, you will never increase your brand’s market share by targeting existing users — the task that digital media performs so efficiently. The effort and expense marketers put into targeting their own customers with emails and web banners is largely wasted; loyalty programmes, says Sharp, “do practically nothing to drive growth”. What seems like a prudent use of funds — focusing on people who have already proved they like the brand — is actually just spinning wheels.

For big brands (and I guess a good bunch of medium-sized ones too, on both national and international levels), your biggest fans, your core audience, they really don't matter. It's the people who stand in line and see a pack of whatever you're selling and then decides to go for it; those are the ones you want to get.

How do you get them? By making sure your brand is at the top of their mind all the time. You get there by applying heavy duty marketing on big platforms.

You can still go small, I'm sure. We all love the idea of 1000 true fans providing you with enough leverage to get by. It's just not the way it works for big brands.

I'd love to see where the tipping point between the two is. Where does it break between depending on 1000 true fans who are loyal and write love letters about your product, and when it's all just about making big Nike/Levi's/Coke-style ads?