Facebook’s Slow Burn

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Facebook has been plagued by negative publicity for the past couple of years but according to this article from AdAge, they don’t appear to be losing any advertising dollars.  From all appearances, Facebook seems immune to issues resulting from high-profile hacks, Russian political interference, privacy issues, negative press, and more.  Perhaps Facebook’s plethora of problems stems from their long-time motto:  Move Fast, Break Things.

The lack of impact in advertising dollars to Facebook seems to fly in the face of a consumer society (primarily millennials) who value transparency and social responsibility.  According to the AdAge article, many industry executives are urging caution and suggesting the tide might turn against Facebook if they can’t get a handle on their business.

I find the situation interesting, especially considering the fact that Facebook is now considered “old person social media” (at least according to my students).  Perhaps the millennial desire for social responsibility won’t have an impact if advertisers aren’t focusing on that demographic.

As a side note, the article also talks about efforts made by a firm with ties to the Republican party that have tried to push lawmakers off of Facebook and onto Google and Apple.  This can provide a good example for students of how the political/legal environment can potentially influence the business environment.

Measuring Endorser Effectiveness

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Students understand the concept behind celebrity endorsers but if you ask them whether an endorsement was a good idea or not they typically answer anecdotally.  When pressed on how to measure the effectiveness they generally struggle.

In September, Hilton Hotels launched an ad campaign featuring Anna Kendrick.  YouGov recently published the article “Hilton has a hit with Anna Kendrick” that does a great job of showing the impact that her endorsement has had on Hilton’s share of voice and brand preference.  The article also talks about the effect celebrity endorsement has on their purchase behaviors as compared to consumers 35 years old or older.

If you wanted to take this discussion to the next step you could build an exercise that models the number of increased stays required for Hilton to have a positive ROI from the campaign.

TV Advertising with Guaranteed Results

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One of the biggest challenges in marketing is the difficulty in measuring a discrete ROI for your campaigns.  This is especially problematic when you have multiple campaigns running concurrently and when there’s no specific way to tie a sale to a marketing impression.  TV advertising has always been plagued by this issue – when you spend thousands or millions on an ad, how do you prove you gained incremental sales?  TV has also struggled with inefficient advertising – you buy spots in shows and times that fit your target demographics but you pay for all impressions, not just impressions that hit your target market.

Turner and Chipotle (through their marketing agency Mediahub) are aiming to tie results to effort with their “For Real” campaign.  Chipotle will focus on addressable ads rather than broadcast ads using Turner’s new platform and Turner is guaranteeing a sales lift from audiences exposed to Chipotle’s advertising compared to non-exposed viewers.  This is just another example of technology transforming blurring the line between mass selling and personalized sales.  If the effort is successful, it could be a big boost for TV networks who are struggling for ad revenue as more and more firms shift their spending to online marketing.  You can read more about the collaboration here.

Sears – Stuck in the 20th Century – RIP

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Sears, Roebuck and Company was founded in 1892 and one of the most iconic retailers in US history filed for bankruptcy protection in October.  The Sears catalog was a staple in many households during much of the 20th century.  Unfortunately they never seemed to really move beyond the catalog.  The retailer has been on a steady decline for over a decade and this analysis by Adthena suggests their inability to adapt played a strong role in their ultimate demise.  It’s no surprise that Amazon has been taking market share away from brick-and-mortar retailers but the Adthena analysis clearly illustrates how poorly Sears competed in the digital marketing age.  During the year leading up to Sears’ bankruptcy, Amazon and Walmart took 44% of paid clicks.  Sears share was 0.7%.  Also interesting, on the search terms that Sears were advertising on, Amazon had a 169% impression share (meaning shoppers were more likely to find Amazon when making searches on terms Sears were advertising on).  In addition, Amazon had nearly 100% overlap on search terms used by Sears.  The article goes on to share additional data points but all clearly show that Sears clearly missed the digital revolution.  Rest in peace.

Halloween Marketing – Behind the Scenes

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Americans are crazy about Halloween and that works out great for costume companies, candy manufacturers, decoration providers, and of course the retailers that carry those goods.  In fact, according to this report from the National Retail Foundation, Halloween represents a ~$9B sales opportunity.  $2.6B of that is spent on candy (if you want to give your students an interesting exercise, have them try to calculate/forecast how many individual pieces of candy that represents).

With that much money on the line you can bet candy companies give the event special attention.  The Mars Wrigley company even created a job position specifically for the event – Chief Halloween Officer.  The current Chief Halloween Officer, Victor Mehren, was recently interviewed regarding the role and it’s unique challenges and opportunities.  Students often appreciate the creativity delivered in commercials but they don’t often think about everything that goes on behind the scenes.  In the interview, Mehren talks about Halloween’s rise in popularity outside North America, he talks about the planning timeline for Halloween (it starts roughly 6 months before the event!), and he talks about challenges from consumer trends toward more health-conscious consumption.  He also talks about some of the marketing campaigns put together including a link to the first new M&M commercial in 11 years.  It’s a great interview with many different topics that could fit a good post-Halloween discussion.