Internet advertising exists because it works.
Just because there are a minority (or even majority it doesn't matter ) that block Ads and never click on them doesn't mean it doesn't create a ROI. Businesses are in the business of making money and if there was not ROI they would not carry out that activity.
You know there are people that never watch a TV advert, but still businesses by TV adverts.
An interesting comment and not without merit.
I do realise that what I am saying amounts to heresy in some circles, but I would even go as far as to say that a huge chunk of TV advertising is pointless and sometimes even can have a negative effect on sales.
I worked in TV in Germany, where the advertising was largely a perfunctory exercise in box-ticking - even more so than here in the UK. That is to say, the advertiser has a budget for marketing, of which, X goes on packaging, Y goes on display and POS and Z goes on advertising. Whether any of that works or not is irrelevant. Nobody in the marketing department is going to shout up to the boardroom, "Hey, Guys! You can do away with advertising and all that goes with it and fire the lot of us! This whole malarkey is pointless!"
Let's be clear about it -
good advertising does work!
"Sounds like a Golf!" was brilliant and helped to sell lots of VW cars. It underlined the quality of the Golf and told the viewer that VW cars were just that bit better than the competition.
"Compare the Meerkat!" is not only inspired and witty, but transformed the fortunes of Compare the Market.
But these are golden exceptions in a sea of generic, lifeless, pointless and insultingly stupid adverts for services we don't want and cars we don't like. If the best you can say about your boring and rather tatty hatchback is that it wiggles its bottom, drives past paint-bombs or can be seen in the deserts of Utah, then what you are implying, is that is the best you have to say about your car!
You are actually telling me,
"Hey, it's not as good as a Golf, so we've just thrown some image-building footage together, so that we can tick that box labelled 'TV Ads!' If we didn't, we'd have to find new jobs!"
"Yes, but you have to buy advertising, to make customers aware of your product and to want to own it!" is what my marketing friends all say!
Oh yer? Let's look at a market where (rather by accident) two products that have either never bought any advertising whatsoever or very little, compete head-to-head with two products that advertise their nuts off! Audio software -
Traditionally,
audio software was always a marketing battle. You had to have the biggest fair stands, the biggest ads in the trade press, the sexiest brochures and the best celebrity endorsements.
Like soap powder in the 60s, most of the costs were in marketing. You got your software onto the Macs and PCs of recording studios, TV and radio stations, producers and musicians, by battering the doors down with millions and millions of dollars worth of marketing.
And it worked!
Twelve years ago, there were two games in town in audio SW - ProTools (from Avid) for the professional and CuBase (from Yamaha) for the amateur. Miles below them were all kinds of bits and bobs, such as Audition from Adobe and a PC programme called Logic and a few others. None of these were much cop and none had any significant market share.
ProTools and CuBase advertised their butts off. Every musicians mag had one or the other and every pro-audio and broadcast industry mag had to have a few pages of ProTools adverting. Trade fairs always featured giant stands for both.
Apple bought Logic, tidied it up and ported it to Macs and sold it at a far lower price than ProTools or CuBase. At the same time, in 2004, a college drop-out who had just sold a company called Nullsoft to AOL for over $200m, got bored and started building his own audio software. And because he thought it was a killer app, he called it Reaper.
Apple bought some advertising for Logic and, because the programme was a cheaper and better alternative to CuBase and ProTools, it soon drew level in market share, mostly at the cost of ProTools. Last year, the user base for Logic and CuBase were at about 18% each.
But here's the kicker - Reaper (with absolutely no adverting at all, nothing, not a brochure, fair stand or workshop - nothing! Not even a promo video or a modest PR effort!) pushed ProTools (the absolute industry standard for professionals) off the third spot and into fourth (14% and 12%). From Bjork to the BBC, all sorts of users are picking up on this new software.
And because all the revenues coming in are spent on R&D, the package just keeps getting better and better. Also, not having investors and shareholders breathing down his neck and freed form the need to spend millions on marketing, the young owner of Reaper (who in younger years looked just like 'Shaggy' from Scooby-Doo) can charge very little compared to the competition.
Watching this young, hippy-dippy guy who breeds lamas, plays guitar and drums (badly) and programmes in C++ brilliantly, head up a handful of like-minded developers and over 12 years move from nowhere to third largest installed user base in a market that is fought over like trench warfare, has taught me a lesson.
It is a complete clash of cultures. The received wisdom of Wall Street and corporate America, armed with hundreds of millions in marketing budgets, versus
five or six goofy guys, who ignore all that received wisdom completely and utterly and have carved out a huge market share for themselves with zero marketing effort.
And hey, Dude! Lamas are like seriously kewl!
