Frenemies: The Epic Disruption of the Ad Business (and Everything Else) (20 page)

The year 2015 seemed to be the year mobile phones captured the full attention of the marketing industry. Speaking before the Mobile World Congress in Barcelona in early 2016, Martin Sorrell castigated big agencies and big advertisers for being late to comprehend the mobile upheaval. Mobile is not just “an extension of digital, just a way to reach consumers,” he said. It is perhaps the most important channel to consumers “that has been developed, and it changes the way you live your life, by virtue of the fact that it is always on, it's 24/7, and we've never
had this.” In her much-anticipated annual presentation on “The State of the Web,” Mary Meeker of Kleiner Perkins Caufield Byers reported that mobile phone users had rocketed from 80 million worldwide in 1995 to 5.2 billion in 2014, or three quarters of the earth's population. “We have never in history adopted a technology faster,” Carolyn Everson told a CES audience in January 2016, noting that it took radio thirty-eight years to reach 50 million people and television only thirteen years. Mobile phones reached 7.2 billion people in just thirty years.
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Perhaps the most significant reaction to the mobile revolution came from Facebook. When Facebook went public in May 2012, its IPO filing said it did not “generate any meaningful revenue” from mobile. Yet founder Mark Zuckerberg knew his users were switching from desktop to mobile, and Facebook's mobile product, Carolyn Everson says, “was not good.” Zuckerberg had to turn his ocean liner as sharply as a speedboat. Twice annually he holds an all-hands meeting with the staff, and he abruptly ended a 2011 meeting when members of a product team came in with a product markup for a desktop computer. He insisted that he wanted mobile markups. “If you come in and try to show me a desktop product, I'm going to kick you out,” he said. Over the next two weeks, Everson says, everyone canceled their product meetings with Zuckerberg, frantically seeking to devise a mobile strategy. Over the next eight weeks, all Facebook engineers were retrained. By the end of 2012, one quarter of Facebook's revenues came from mobile; by the following year, it was half. By 2016, 80 percent of Facebook's revenues came from mobile phone marketing. By 2019, the research firm eMarketer projected, ad spending on mobile would reach $65.4 billion and dominate 70 percent of all digital
ad spending. Mark Zuckerberg knew Facebook was doomed if it could not reach its young audience on mobile.

The two younger generations were such a disruptive force because they are a prime audience targeted by advertisers since they are thought to shape future buying habits. They consist of millennials, those age twenty-one to thirty-four,
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and of Generation Z, those twenty-one and younger, with teenagers being the heart of this generation. Of the two, we know less about Generation Z.

One Monday afternoon in early 2016, MediaLink invited to its conference room a client, AwesomenessTV, to share what they know of Generation Z. AwesomenessTV is a Santa Monica digital TV production company with its own YouTube channel that is wildly popular with this generation. To better understand Generation Z, they formed a youth marketing firm, Wildness. The chief strategy officer of Wildness, Margaret Czeisler, a former vice president at the digital ad agency Razorfish, was introduced by Wenda Millard.

Czeisler discussed what she said was the largest study of Generation Z ever conducted, a survey of 3,000 members of this generation, as well as in-depth interviews. She described Generation Z this way: It represents 34 percent of the world's population, and they see themselves as “culture creators,” not passive receivers of information. Every 60 seconds they upload 500,000 hours of video to YouTube and 528,000 photos to Snapchat. They prize “authenticity” above all. “Ninety-four percent,” the vast majority, “told us their highest social value is to be true to themselves.” While surveys reveal that becoming wealthy is the second most-valued goal of millennials, she said, “It's not even in the top twenty of this generation. The opportunity for brands is to get real and to be consistent.” By way of illustration, she reported that
70 percent prefer video streamed over the Internet to TV or cable. Why? “They don't want to be interrupted. They hate ads.” They like YouTube because “people are real and authentic.” They would prefer to subscribe to ad-free services, assuming they could afford to. “They also have the shortest attention span of any generation,” she warned.

Although there are real differences between millennials and Generation Z, for marketers the similarities are meaningful, she said. Both share an aversion to being interrupted by ad messages. Both spend less time in front of television sets, get more news from Facebook than newspapers, multitask on multiple devices, tend to have attenuated attention spans, and are devoted to their smartphones. If a marketer wishes to capture the attention of both with a mobile ad, it has to be done in a second or two.

Whatever the obstacles, Czeisler said marketers can reach younger consumers. Their pitches have to be shorter, maybe using pictures and emojis and messages like six-second Vine videos rather than words. “The real challenge for brands is to create experiences” that are powerful and to understand their quest for “authenticity.” Czeisler did not have to tell them that this is a reason brand advertisers increasingly emphasize in their marketing messages the services they perform, the social good they do, the “brand values” they share, as if makers of sugary drinks and fatty hamburgers are public servants. This generation, she said, is willing to hear from brands, and 91 percent said they would be willing to share their views with brands. “They like branded content because it is much more real,” which is the same reason they like YouTube videos—they are “not overly polished.”

The MediaLink staff perked up at the news that Generation Z was reachable, but in nontraditional ways. Just to be sure, Wenda Millard asked, “They really don't like ads?”

“Eighty-four percent told us they don't like advertising,” Czeisler responded.

“That could be a problem!” Millard cracked.

“They like branded,” Czeisler said. “They don't like to be interrupted.”

The takeaway, Millard concluded: “They don't like advertising as we know it.” The consumer was a frenemy.

Not liking advertising
has a long history, certainly in America. Both in the Progressive era when the muckrakers exposed false marketing claims, and again during the Depression, when corporations and advertisers were in bad odor, federal agencies were forged to police false advertising.

Perhaps the most renowned critique of advertising and its manipulative powers was a book written by Vance Packard, previously an author of such fluff magazine pieces as “How I Lost 15 Pounds in One Month.” Moved by a genuine sense of outrage, Packard published
The Hidden Persuaders
in 1957, and it quickly shot up to number one on best-seller lists. He lambasted advertisers for treating consumers as gullible children. The heart of Packard's thesis was this:

This book is an attempt to explore a strange and rather exotic new area of American life. It is about the large-scale efforts being made, often with impressive success, to channel our unthinking habits, our purchasing decisions, and our thought processes by the use of insights gleaned from psychiatry and the social sciences. Typically these efforts take place beneath our level of awareness; so that the appeals which move us are often, in a sense, “hidden.” The result is that many of us are being influenced and manipulated, far more than we realize, in the patterns of our everyday lives.

David Ogilvy granted ammunition to critics of advertising when in a 1955 speech to the American Association of Advertising Agencies he admitted, “There really isn't any significant difference between the various brands of whiskey, or the various cigarettes, or the various brands of beer. They are all about the same. And so are the cake mixes and the detergents and the margarines and the automobiles. And, I might add, the different brands of salt.” The difference, he said, is found in the advertising and the emotion it creates. Or as MediaLink's Wenda Millard says, “At its heart, advertising is about creating desire.”

Creating desire is what alarms James Steyer, founder and CEO of Common Sense Media, a children's advocacy organization focused on the harm media can afflict on children. He worries about advertising that promotes unhealthy sugary drinks or fast food, but he said his fear could be defined more broadly: “The ubiquity of advertising can turn little children into overly commercial human beings. They think of being defined by material things. Little kids don't know the difference between ads and programming. My twelve-year-old son constantly wants new sneakers.”

Wanton consumerism has forever been blamed on advertising. Michael Schudson, who taught a course at the University of Chicago called Mass Media and Society, says he would freely assert in class that advertising was usually ineffective. He was inspired to study the impact of advertising because “I did not have an adequate response” to students who asked why companies would spend so much on ads if they got little return. In the book he would write about the industry,
Advertising, The Uneasy Persuasion
,
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Schudson explored advertising's sins. He compared advertising to the art of socialist realism because
“it does not claim to picture reality as it is but reality as it should be.” He labeled it “capitalist realism” and said ads are designed, whether successful or not, to “subordinate” messy reality in order to spike sales of a product.

Among the hidden efforts of advertisers, critics most often latch on to how marketing manipulates our emotions. Industry leaders don't deny this, they extol it. Jack Haber, who retired as CMO of Colgate in 2017, says, “I'm a believer that consumers make decisions emotionally.” As proof he cites Daniel Kahneman's esteemed best-selling book,
Thinking, Fast and Slow
, to demonstrate that most human decisions pivot on emotion. “If you look at how people make decisions to buy things, people make decisions emotionally. That's why we try to build an emotional connection to a brand.” Colgate spent $5 million for a thirty-second spot in the 2016 Super Bowl that didn't mention toothpaste but instead urged viewers to save water by not leaving the water running. “Colgate is the most trusted brand in the world,” he says, and he believes this Super Bowl ad reinforced the emotional connection people have with Colgate. One of the most celebrated ads ever was the Coca-Cola commercial that was the final scene of
Mad Men
. It featured children of all colors from around the world giving viewers goose bumps as they harmonized on a hilltop:

I'd like to teach the world to sing

In perfect harmony

I'd like to buy the world a Coke

And keep it company

That's the real thing

The ad tells nothing of the product, or its ingredients, or why it's “the real thing.” Keith Reinhard defends the ad and the emotions it evoked because “the ad is part of the brand experience,” whatever that
means. “We have always known, intuitively,” he explains, “that people make their brand decisions—by the way, the same way they make their political decisions—emotionally, with that lizard part of the brain, the reptilian part.” Marc Pritchard, chief brand officer of Procter & Gamble, tersely explained to an Advertising Week audience why his product, Old Spice, had rebounded: The advertising for “Old Spice is about ridiculous masculinity. And it works!”

It certainly worked for CBS, owner of broadcast rights for the February 2016 Super Bowl. The annual event offers the biggest audience of the year to advertisers, which is why CBS was able to charge up to $5 million for each spot. It was not exactly edifying fare. Bud Light had comedians Amy Schumer and Seth Rogen paired up to disagree whether the nation was divided this presidential year and to agree to canvas America to promote the “Bud Light Party.” Audi was praised for its storytelling in their ad, “Commander,” in which an elderly, utterly depressed former astronaut will not eat or talk and just stares ahead. His son enters the room, takes his hand, they walk outside, and in the driveway is an Audi R8 sports car that can reach 205 miles per hour. The father takes the keys, to the sound of David Bowie's “Starman,” and he magically smiles. “There is no way for an Alzheimer's family to watch this without gasping” in shock, wrote
MediaPost
columnist Bob Garfield.

One explanation for advertising's constant stretch to transfix audiences is that advertising is really a form of show business. Randall Rothenberg, CEO of the Interactive Advertising Bureau and a long-time student of advertising, suggests as much: “Contemporary advertising is based on the deliberate, playful, wink-wink of P. T. Barnum. It's based on the idea that if you shout loud enough, tell clever enough stories, you can get people to do anything.” No question, many marketing pitches are brilliant, and more than a few advance a social good, as P&G's Ariel detergent ads did in India, Unilever's Vaseline did for
Syrian refugees, Nike's “If You Let Me Play” ads did in promoting Title IX and girls participating in team sports, and as R/GA's inspiring antibias public service ad, “Love Has No Labels,” did. But if one acknowledges that many marketing pitches are hyperbolic, then one holds hands with “truthful hyperbole,” the phrase Donald Trump described in his book
The Art of the Deal
as “an innocent form of exaggeration—and a very effective form of promotion.” From here, the distance to “alternative facts” is a mere step or two.

So as is often the case, two opposing things are true at once: the social mobile data revolution has made consumers more skeptical of advertising, even as ever more immersive and intimate technologies have given advertising more and better purchase over our emotions. And we've barely glimpsed the impact of virtual reality on the world of marketing. As Daniel J. Boorstin famously wrote in his 1961 book
The Image: A Guide to Pseudo-Events in America
, “We risk being the first people in history to have been able to make their illusions so vivid, so persuasive, so ‘realistic' that they can live in them.” More than fifty years later, this is still not a comforting thought.