The Internet sucks you in but doesn't give you the results you want.

The Internet sucks you in

Roy Williams in his weekly memo wrote about Pepsi’s online bet that ended in a 5% decline in market share. Even though some of you subscribe to his memo I think it pays to discuss this again.

So many companies that I’ve spoken to lately have bet their advertising dollars on Social or search marketing. It always seems to pay off at the beginning but then the effectiveness dulls over time.

Roy wrote:

“Pepsi has been a household word since before we were born, so why do they keep advertising? Couldn't they reduce their mass media spending and still maintain their sales volume?

In a word, no.

We know this because Pepsi tried it.

Bob Hoffman was the keynote speaker at the 2014 European conference of AdvertisingWeek:

"In 2010, Pepsi cancelled all its TV advertising and its Superbowl advertising to great fanfare and bet BIG on the largest experiment in social media marketing ever attempted, 'The Pepsi Refresh Project." TIME magazine quoted the CEO of a New York brand consultancy, 'This is exactly where Pepsi needs to be. These days brands need to become a movement.' Well, they became a movement all right. I estimate The Refresh Project cost them between 50 and 100 million dollars. It got them 3.5 million Facebook likes and a 5% loss in market share, which they seem to have never recovered. That year, they dropped from the second best-selling soft drink in the US to third. Pepsi's marketing director said, 'The success has been overwhelming. We have more than doubled our Facebook fans. We have more than 24,000 Twitter fans.' The L.A.Times didn't seem to agree. They called it 'a stunning fall from grace.'"

Hoffman went on to say that TV and Radio are best at creating demand, while the web is terrific at fulfilling demand. The interviewer then challenged Hoffman by saying, "But it is changing. And it's changing fast. Ten years ago 93 percent of the public got their news from television and only 7 percent got their news online. Today it's 26 percent online."

Hoffman's response reflected his 40 years of experience directing ad campaigns for McDonald’s, Toyota, Shell, Nestle, Blue Cross, Chevrolet and Bank of America. 

"What we often confuse is the use of digital media with its power as a marketing or advertising entity. The fact that more people are using online for news is not a de facto proof that it's a good advertising medium. Let me give you an example of that: the old-fashioned telephone. Everyone in the world had a telephone. It was a hugely popular means of communication. That didn't make it a good advertising medium. It was a lousy advertising medium. The fact that people us it for communication or to get information or to have conversations doesn't necessarily make something a good advertising medium."

I’ve seen this time and time again. Companies advertise online, get some initial results but never gain sales momentum. Their sales never quite get to where their initial projections promised.

This is because initial results don’t always equal long-term results.

We are all excited about the possibilities of what the Internet can accomplish but we don’t realize that the Internet rarely helps to develop demand for what you are selling. The Internet is the new age Yellow pages, it’s where you go when you have an immediate need, and this is an important part of the process. The Internet won’t, however, help build your brand and make you the Brand customers think of first. It won’t develop a momentum that will continue to grow your topline.

Your results will flatline.

This is because once you’ve weeded out the initial people with the immediate need you’re left with far fewer buyers than you thought.

If you want to grow your business you need to work on some traditional marketing campaigns.

Where will you be spending your marketing efforts?

 

Morty Silber, CEO

Mad Strategies Inc.

a Wizard of Ads Partner