We were in an advertising bubble

In 1984 Salli Rasberry and I published the first edition of Marketing Without Advertising, we are now working on the seventh edition. Chapter one says something that had never before been publicly stated and with fact that had never been said by anyone else since: Advertising doesn't work. The $150 billion spent annually on advertising in the U.S. is part of an hysterical bubble that is based on no reality.

A major part of the current collapse of many businesses is due to the slow understanding of what we said in 1984.

First I have to explain what advertising is and why it doesn't work. I make a distinction between advertising and listing.  A listing is placing marketing information where a potential customer is looking for it.  Examples are: Yellow Pages, click-throughs on Google, signs on stores, Wednesday newspaper ads for food and Macys' sales and giveaway maps. Almost everything else, placed where potential customers have to ignore the marketing material is advertising.

Advertising is somewhat effective (1) when directed at tourists who had few other good sources of information (before the Internet), (2) children who are fairly gullible and (3) employees of the advertiser who learn from the advertising message what their company is directing at the public.

Small businesses, 98% of the time, find advertising useless, which is what I learned early on and led me to first teach the course Marketing Without Advertising and then to write the book.

Back to the bursting advertising bubble.  I think Google and click-through Internet listings have raised the question in the minds of all business people about the ineffectiveness of advertising.  That has led to a rapid decline in advertising in magazines and newspapers and a decline in advertising overall. 

On the other-hand click-through Internet listings work miracles for many businesses, so does good Google placement and effective websites. Craigslist works because it is broken down into tiny geographic neighborhoods where you know whether you can drive over and pick up the object for sale.

I've had over two thousand clients in my long consulting career...I haven't made any of this up.  The advertising doesn't work and the advertising bubble has burst.

Added related note: 73 million people have and use TIVO...mostly to avoid the intrusive advertising that destroys most TV programs.

Comments

[Online Marketer]

Good points. I think there needs to be a distinction made between advertising and promotion. The internet is great for promotion, but not so much for advertising. Traditional media it is harder to get free promotion spots, so sometimes it is required to buy an ad. Either way, one has to examine the time and cost involved to see if it is worth it.