The Continuing Power of Mass Advertising

It’s getting harder for marketers to reach a broad audience. People are increasingly tired of what they see as an unending stream of advertising that is unconnected to their lives or interests. In one recent survey, for example, two-thirds of the respondents said they felt constantly bombarded by ads, and more than half said the ads they saw had little or no relevance to their lives.1 Fed up with this meaningless glut of messages, consumers are using technology to fight back.

Some television viewers are using digital video recorders and on-demand technologies to fast-forward through advertisements or to skip them altogether. Others are using their personal mobile devices to download commercial-free versions of popular shows. These technological advances are rocking the industry: In a recent survey of the members of the Association of National Advertisers, 70% responded that these advances will ultimately lead to the downfall of 30-second television ads.2 And television is not the only medium affected. Internet users are taking advantage of new software to block spam and pop-up ads. Telemarketers are having a harder time getting through as people use answering machines, caller ID and the “Do Not Call” registry to avoid unsolicited interruptions at home. And consumers are hungry for more: In an Accenture Ltd. survey, more than 60% of respondents said they looked forward to new technologies that would block advertising, while only about 10% were not looking forward to those technologies.3

What’s the solution? For several years, marketers have been urged to embrace one-to-one marketing and to offer micro-segmented consumers customized products and services through targeted outreach. While the “market of one” approach can pay off, it requires a significant upfront investment, including: implementing customer relationship management software applications; filtering, enhancing and cleaning customer data; and personalizing interactions (e-mail, billing, offers and so on). These activities take time and coordination of multiple parts of the organization (marketing, customer service, sales, information technology), which, for companies that are trying to be highly reactive to a changing environment, can be daunting. In addition, those activities have often produced disappointing results because their use was not well integrated with corporate strategy.4

A micro-marketing strategy, on its own, is too narrow. Companies still need to reach broad groups of people with messages that are not dependent on an individual’s decision to open an envelope (whether virtual or physical), pick up the phone or click on a box. Indeed, marketing executives understand this need, which is why they continue to devote 40% of ad dollars to television advertising — even though recall of such ads was only 6% in 2003, down from 40% in 1960.5

Fortunately, there are alternative solutions that stand between the extremes of one-to-one targeting and the broadcasting of 30-second television spots. Through our research on trends in marketing spending and consumer attitudes about advertising, we have discerned four strategies available to companies that want to reach broad groups of people without breaking their marketing budget. (See “About the Research.”)

The first is to find consumers in “the bottlenecks,” the places where even the busiest of people can’t help being stopped for a while: riding in an elevator, flying from one city to another, even using a restroom. The second strategy is to use a “Trojan horse” approach, placing advertisements on such frequently encountered materials as coffee cups and paycheck stubs. The third is to get the attention of consumers at play outside of their homes — for example, by placing advertisments on global positioning systems on golf carts. The fourth strategy extends the third: It seeks to get people to play along, using interactive technology in public spaces. These four strategies comprise a wide range of specific marketing tactics that are emerging today, but they have several things in common: They each cost-effectively target broad groups of people with messages that cannot be turned off. (For a comparison of these new strategies with four older ones that marketers have used for decades, see “Mass Advertising Evolves.”)

A decade ago, two seasoned observers argued that we had entered a “post mass-media era.”6 They further contended that advertisers at the time rarely used “alternative media” to build brands. Times have changed, however. While it’s true that the mass-advertising Golden Age is over — families no longer gather around the electronic hearth to watch a popular show on one of only three TV networks — alternative ways of reaching the masses are proliferating.7 It’s time for marketing executives to make sure that their advertising budgets reflect this reality.

Catch People in the Bottlenecks

While people are increasingly taking control of the ads they choose to encounter in their private spaces — homes, cars and even offices — they still spend time in public spaces where they lack such control. That is particularly true when they are in transit — for example, on an airplane or in a taxi or elevator. In these bottlenecks of life, advertisers can reach consumers with acceptable, effective messages. One survey found that consumers deem advertising in such unusual or unexpected places to be far more attention getting than other forms of advertising.8

Consider the possibilities in escalators and elevators, those inescapable features of airports, shopping malls, hotels and office buildings. People tend to stare off into space during the time it takes to complete a trip on one of these conveyances. But some enterprising companies are changing this scenario and getting strong results for their clients.

London-based Escasite, for instance, installs ads on the revolving stairs of escalators at sites throughout the world. At a shopping mall, consumers might be directed by an ad toward a new store, or they might see one encouraging them to try out a new food item at one of the mall’s restaurants. Independent research commissioned by the company found that people had consistently high recall rates of the advertised brands. In one test, Escasite created the name of a fictional beer company, and more than a third of those who saw the ad could later recall the brand name unaided — a figure that jumped to two-thirds with prompting. In addition, 60% of those who saw an ad for Animal Planet on an escalator said they were very or quite likely to watch shows on that network in the future, and more than one-fourth of those who saw an ad for Estée Lauder Inc. indicated that they were very or quite likely to purchase that company’s products in the future. As an Estée Lauder manager put it, the ads helped the company reach consumers “when it mattered most — at the heart of the retail environment, right at the point of purchase.”9

Elevators have also become a new hot spot for advertisements. Captivate Network, located in Westford, Massachusetts, has installed more than 7,000 wireless, digital screens in the elevators of office towers in 21 of North America’s top markets. Through its own network, the company broadcasts short news and enter- ainment programs along with advertising from Nike, Microsoft, UBS, Lexus, Fidelity Investments and British Airways, among many others. According to survey data, 88% of people watch the network every time they ride the elevator, and the average advertising recall rate among this targeted demographic is 37%.10

Airplanes are another place where people are in a bottleneck. A good portion of those on board will be seeking to relax for a few hours. Stella Artois capitalizes on this desire by advertising its beer on Virgin Atlantic Airway Ltd.’s in-flight movie channel; travelers can then buy the product from flight attendants. Whether they are relaxing or working, many of the air travelers will be frequent-flyer road warriors. Sony Corp. works with Delta Air Lines Inc. to reach this group, advertising its Vaio notebook through Delta’s movie channel and its in-flight magazine and providing laptops for Delta Crown Room Club lounges. Using a more indirect strategy, MasterCard International recognized that travelers, especially those flying coach, might like a break from no-frills flights. During the 2005 holiday season, MasterCard provided complimentary snacks, movie headphones, puzzles and games on some 600 flights on American Airlines; flight attendants publicized these benefits.11 Finally, companies like Verizon, Microsoft and Saab are experimenting with ads wrapped on airline tray tables, a tactic that leads to high recall rates since nine out of 10 passengers on flights of an hour or longer have their tray tables down for 15 minutes or more.12

In some cities, when travelers touch down and need ground transportation, they may find themselves in a taxi with a video screen in the back seat. Cabvision Ltd. runs a service in London’s black cabs, which provides a mix of television channels that offer news, entertainment and advertising. In Las Vegas, ClearChannel Communications offers TaxiTV service, which allows advertisers to reach consumers right before they are about to decide where to eat, what show they want to see or where they want to shop. In New York City, ads on the roofs of some taxis are lined with global positioning system sensors that allow the messages to rotate as the cab drives from one part of the city to another. People on the street see ads only for stores and restaurants in that vicinity.13

Finally, people in convention hotels, at large entertainment centers and at other venues sooner or later have to use a restroom. They are thus captive audiences for a few minutes. Procter & Gamble Co. recognized these locations as useful places to advertise certain products in the late 1990s, when it placed ads for the skin cream Noxzema in 115 restaurants, bars and clubs in exclusive parts of Manhattan.14 And while certain companies would naturally target young people enjoying the nightlife — think makers of breath mints and liquor — others have taken a more adventurous path. An example is Tourism Victoria’s attempt to encourage young people in Melbourne, Australia, to visit the Grampians National Park. In the ad campaign, toilet stalls in six Melbourne movie theaters were wrapped in creative images of the Grampians Mountains.15 Lest this appear to be stretching the point too thin, consider that 18% of respondents in a recent survey reported having seen advertising in a bathroom at some point.16

The strategy of catching people in life’s bottlenecks isn’t about saturating every spot on the planet with a potentially annoying ad. It’s precisely because consumers find television and Internet advertising frustrating (and, more important, avoidable with the help of technology) that marketers need to seek out ways of reaching people with ads that are acceptable and even agreeable (not to mention uninterruptible). Ads in elevators, airplanes, taxis and restrooms fit this description. Further, while such ads are not customized to the individual, they are more targeted, less expensive and more effective than simple mass-market appeals.

Use a Trojan Horse

Few companies would sell advertisers space in their corporate offices or conference rooms. Similarly, no affluent neighborhood would allow a company to put up a billboard in some corner of its cul-de-sac. But both places are susceptible to the strategy we call Trojan horse advertising.

The concept of “sneaking” ads into unexpected places is familiar, of course, in the guise of “product placement” in films, television programs and, today, video games. While this strategy has been around at least since 1951, when Katharine Hepburn tossed a bottle of Gordon’s gin overboard inThe African Queen, it has more recently become a relatively crowded and expensive way to get noticed. For example, the top 10 cable networks alone ran nearly 20,000 placements in just one month, January 2006.17 Marketers should consider cheaper, more innovative ways of getting their brands noticed.

Consider the lowly coffee cup. Millions of people pick up a cup, usually in an insulated-paper container, every day on the way to work, and most of those cups have nothing more than the coffee maker’s name on them, if anything. But that’s a missed opportunity, because it’s possible literally to put ads into the hands of coffee drinkers — ads that can then be transported into offices and conference rooms. PromoMedia Concepts, for example, has placed ads on millions of coffee cups since 1994 for companies such as Citibank, Nextel and Clarinex. In 2002, when Washington Mutual Bank opened its first branches in New York City, the bank made its presence known to the people working in lower Manhattan’s financial district through ads on the cups of thousands of coffee vendors in the area.18 A similar campaign in 2003 for Scotland’s national tourist board, in conjunction with advertising in other media, helped triple Web site traffic to VisitScotland.com.

A similar philosophy lies behind pizza-box advertising. Whether delivered to the home or office, pizza boxes offer another way for companies to take a Trojan horse approach to get their messages across. Mangia Media Inc., for example, has placed ads on more than 30 million pizza boxes since opening in 2000, for clients such as Citibank, Snapple, Paramount Pictures and a variety of television networks — HBO, Showtime, ABC and others.19 One of the company’s founders, Joyce Shulman, points out that these ads are particularly effective for advertising television programs because most people buy pizza for dinner and eat it right before they decide what they want to watch that evening.20 It seems that advertising on takeout food containers is being noticed by the public, as more than a quarter of respondents to a recent survey said they had encountered such advertising in the past.21

Advertising on paychecks and direct deposit slips is another way to reach consumers stealthily. These documents do not go into the trash unopened; everyone opens the envelopes they come in and scans the contents, and many save the slips. Chek Solutions Advertising Inc., of Columbus, Ohio, puts ads or coupons on the backs of payroll checks for local and national businesses in several Midwestern U.S. cities. A recent example that was used on more than 2 million paychecks in Cleveland, for example, included ads for Honda and Wendy’s and coupons for Meineke services and a local pizzeria.22

Garbage truck advertising is perhaps the ultimate Trojan horse approach. Trucks go up and down the streets of just about every neighborhood in the country, after all. While a few cities have debated the merits of selling ads on their fleets, this idea appears to be largely still under consideration. Perhaps the world isn’t quite ready for ads on garbage trucks. Nevertheless, it is certainly feasible. Companies are increasingly working with businesses like Bumper2Bumper Media, of Greenville, South Carolina, to wrap their vans and trucks with their logos and brand messages.23

Target People at Play

People generally don’t want to be bothered by advertising when they are “at play” — on vacation, golfing and so on. But as with the other approaches outlined here, there are ways of reaching people in these situations without turning them off. Giving people something they can use is a more thoughtful approach to brand building than the tactic of pushing more and more messages while they are staring at the television or computer. In addition, because this approach doesn’t literally interrupt people during their activities, it is less apt to be considered a time-consuming nuisance, according to survey results.24

For example, golf carts are increasingly being outfitted with global positioning systems that give golfers precise distances from tee to green, including distances to water hazards and sand traps. A company called LinkServ Golf, in Apple Valley, Minnesota, is helping golf courses pay for the systems by adding advertising. The company offers two approaches: In the first, the GPS monitor shows a full-screen ad as the players approach the green and no longer need the system; as they finish the hole and drive to the next tee, the ad disappears and is replaced with information about that hole. In the second, a banner ad fills part of the screen for nine holes. In a survey of 12,000 golfers conducted by the company, about three-quarters of golfers said they prefer to ride in carts that have a GPS system, and 90% had no objection to advertising as part of the package. The company also notes that ad recall rates can be as high as 70%.25 In addition to displaying ads for products that would have obvious and immediate appeal to a foursome (like beer), the screens can also be used for pricier products, such as a mosquito-killing system — a device likely to appeal to golfers on a warm summer’s day, especially in the land of 10,000 lakes (and 10 million mosquitoes).

People on vacation are also good targets for sophisticated advertising approaches. Brand Connections LLC, in Montclair, New Jersey, helps companies reach people when they are “getting away from it all” for a day or a week — on cruise ships, at amusement parks, even at hotels invaded by college students on spring break. One of Brand Connections’ chief ways of building brand awareness is by making product samples available — the company distributes more than 150 million samples per year.26 Over spring break in 2006, the company distributed “survival packs” with toothpaste, body wash, razors and medicine for upset stomachs to the arriving hordes. The key, points out CEO Brian Martin, is to work with hotels to get those products into places where they will actually be used: hotel bathrooms. “The days of putting a branded tent on a beach and then handing out stuff [are] just dead,” he says.27 Such tactics help the company achieve a trial rate of more than 70%, double the industry average.28

Get People to Play Games

Although reaching people while they are at play can be an effective advertising tactic, getting people to play along is also one to consider. New technologies are enabling marketers to interact with consumers in public spaces without employing massive sales teams.

For example, when Nokia Corp. launched its 3300 mobile phone in the United Kingdom in 2003, it contributed more than a quarter of its advertising budget to interactive posters. The posters were positioned in shopping malls, along streets, in subway stations, in bus shelters and in fitness clubs. People could test the MP3 player, the radio and the ring tones that the phone would include. The goal was to target young people, some of whom might already be listening to music on a portable device, and to get them to go straight to a retailer.29

More recently, Reactrix Inc., a company in Redwood City, California, has developed a “poster” in the form of a six-foot-by-eight-foot image that is projected onto the floor of shopping malls, office building lobbies and other public areas. When people step on the images, they can interact with the ads. For example, an ad for Adidas featured the image of a soccer field. When passersby stepped on the image, they were able to kick a virtual ball to one another. An ad for Visa encouraged shoppers to “stomp out bad gifts,” like fruitcake and garden gnomes. When anyone “crushed” a bad gift, a Visa gift card was revealed.30

According to Arbitron Inc. research commissioned by Reactrix, more than half of those surveyed could recall seven of 10 advertised brands, with no appreciable drop in recall after 72 hours. (Other research indicates that most ads appearing during the Super Bowl are recalled by less than one-fourth of viewers.) Most reported that they had fun with the displays, and more than half said they planned to tell others about their experiences. In addition, of those who came within six to eight feet of a display, roughly half either looked directly at it or interacted with it, while only 13% looked at nearby plasma screens and only 4% looked at printed posters in the same area.31

The Happy Medium

Marketers, clearly, are searching for new ways of reaching consumers that hit a sweet spot between the monolithic television audience of yesteryear and the individual digitally wired consumer of today. While television remains an attractive outlet, companies are allocating smaller portions of their ad budgets to that medium. Between 1999 and 2004, for example, McDonald’s Corp. cut the portion of its U.S. marketing budget devoted to television advertising from two-thirds to one-third.32

Many are arguing that digital advertising represents the biggest area of untapped opportunity; that it is, in essence, the new television advertising.33 While Web sites like MySpace, online video channels like ESPN Motion and online games like World of Warcraft are growing targets of advertisers’ dollars (as they should be), they all still suffer from the same problem that afflicts television advertisers: You can turn them off (or never turn them on). Meanwhile, the cost per click for advertisers buying the top placement on major search engines is increasing rapidly — it went up 13% from 2004 to 2005. This phenomenon is logically leading some online companies to spend more of their ad budgets offline, much of it on traditional mass-media targets such as billboards. For example, 1-800-Flowers.com Inc. spent 70% of its $55 million budget on offline ads in 2005, up from 50% three years earlier.34

The alternative to broadcast advertising, micro-marketing, has not yet delivered the miraculous results that have been promised in its name. Privacy concerns are one part of the problem, as individual consumers resist divulging personal information and companies must be careful not to betray customers’ trust. The cost of micro-marketing is an even bigger concern. One major advertising firm, Grey Worldwide New York, has conducted more than 100,000 interviews to obtain information about consumers’ attitudes, and that level of research doesn’t come cheap. Many brand managers still find the idea of paying a higher cost per thousand to reach a smaller audience “dauntingly counterintuitive.”35

Finding otherwise bored people in the bottlenecks of life, grabbing their attention with a Trojan horse, giving them something useful while they are at play and coaxing them to join in the play — these are four approaches that companies are increasingly employing to reach the masses with creative and relatively inexpensive advertising. In a world where the choices for “the spend” are seemingly endless, the key for marketing executives is to develop a coherent strategy that helps them decide rationally where they will get the biggest returns on their investment.