Why Do Companies Run Ads If There's No Certainty People Will Buy?

Why should a company spend money to advertise when there’s no certainty of the outcome? For the same reason a person wears a nice suit or outfit to a job interview, the same reason you smile at people when you are introduced to them, and the same reason you tell people about a product you sell if you actually want them to buy that product. There is no certainty that you will get the job. There is no certainty the individual you are meeting will like you (and vice versa). And there is no certainly people will buy your product. But it has been proven that making a good impression on people and giving them relevant information makes all of those prospects much more likely.

The same is true of purchasing ads. Good ads, that is. We once created a billboard ad for a health insurance company that yielded 27 calls (that we heard about) by 10 o’clock the first morning it went up. Eight of those calls were from employees who all said, without being asked, that it made them feel better about working for that company. That may not sound like much, but at the time, the company was trying to overcome some very bad news in that marketplace, so having employees feel better about being there – which was not even the point of the ad – was a real win.

The other nineteen calls all went into the sales department for follow-through and more calls came in later. The billboard also caught the attention of local media and both a newspaper and a television station did stories about it. The company was able to overcome its bad news within six months – not just because of that billboard, of course, but we know based on further customer research that it helped. That proved to be a very good investment, despite there being no certainty beforehand about what the outcome would be.

We’ve had similar experiences with radio commercials, TV spots, newspaper ads, and other media. Not long ago, a client asked us to create a B2B direct mail package + email + website landing page campaign that cost them around $150,000 – with zero certainty of making even one sale. But it did exactly the job they needed it to, piquing new interest and getting them in the doors of over 30 high value prospects that had not responded well to past efforts. They closed over $70 million in new contracts that summer, and they started new relationships with prospects who hadn’t known anything about them before.

Again, the ads, direct mail, and emails have to be very good to be effective, which we emphasize because too many companies have told us, “We’ve run ads before and they didn’t work.” Which does not surprise us at all, because there are A LOT of very poorly conceived, poorly executed ads put out into the marketplace every day, and no…bad ads do not work.

Look at it this way: Ads are not just sales tools. They are part of the sales process, but they are much more. They can do a lot to help a brand tell its side of who they are, what they stand for, and what they hope to achieve (or have achieved) for their customers. Ads are an investment just as a nice headquarters is an investment, a good web site is an investment, and hiring smart and talented people is an investment. And just like your people (or the web site or offices), if the ads don’t work out, you change them. But you don’t stop advertising, unless and until you are ready to go out of business.

How can Marketers Avoid Culturally or Racially Offensive Advertising?

If your product or your approach even hints at being culturally or racially offensive, it’s worth the time and expense to see how people in the real world react to it with focus groups, online surveys, or other exposure to limited audiences. We don’t recommend that every marketing idea or ad campaign undergo focus group review, but the world is a diverse and litigious place and people’s life experience, sense of humor, education level, exposure to new ideas, and so on all affect how they are likely to react to the ads, ideas, turns of phrase, imagery, etc. that a brand puts out. Having developed creative advertising and materials for many consumer packaged goods (CPG), health plans, hospitals, utilities, automobiles, electronics, retailers, and more for over 35 years, we can assure you that a little extra insight into how your target audiences will react to your concepts is never a bad thing.

With that said, it’s also our long-held belief that advertisers should not do every single thing that any focus group says to do. That’s one of the fastest ways to end up with the most boring, milquetoast, nondescript advertising on the planet. It would be like giving small children approval over what goes on the menu at your favorite French cafe or seafood restaurant. Unless you want the equivalent of chicken fingers and mac & cheese for the next few years, you will listen, but pick your own solutions. It can be constructive to hear how a focus group or other feedback provider responds — especially if some of those responses are gasps or shrieks at points in the ad that are unexpected by your team. That’s a sign of a pending, “Crap, why would anyone think we meant THAT?” moment.

Another option that marketers can take is to have 2–3 lawyers review and comment on the ad. In fact, most large corporations insist that their legal team see ads before there are broadcast or published. We actually recommend attorneys from outside the company, though, because you are more likely to get honest feedback from parties who don’t think their job is on the line if they deliver unwelcome feedback. Of course, you also will never create breakthrough ads by doing exactly what a lawyer tells you to – it’s their job to play it safe – but even if you intend to push the outer envelope of good (or bad) taste with an edgy ad, it’s smart to know where things stand before you go on air or to press.

Thankfully, most U.S. examples of culturally tone deaf or racially cringe-worthy ads that come to mind quickly for us are from many, many years ago. One of the worst was a laundry detergent ad where of course the owners of a laundry service were Chinese. Quite recently, though, an ad where a black woman becomes a white woman caused a stir, and should have. Many people today comment that “everyone is so oversensitive” as a broad whine about why today isn’t as good as “the old days.” But if more people are, in fact, overly sensitive today, perhaps that’s because too many were so blithely and insultingly insensitive in the past.

In the end, how far you decide to push before going “over the line” into truly offensive ideas or language is a judgement call, but your gut should “just say no” to the use of 99.9% of ethnic, gender-specific, or cultural stereotyping and other jabs. Because even if you are being light-hearted or sarcastic – and you think they know that – it’s rarely worth risking a lawsuit or high exodus of customers just to prove your point.

What Exactly is a Brand?

There are a few ways to define the term “brand,” starting with a symbol used by a person, company, or other organization to assert ownership of something. In the livestock industry, of course, a ranch burns its brand – its symbol – into the hides or horns of livestock it owns, including horses, cattle, sheep, etc. to signify ownership. It’s a strategic, clearly defined process that protects both the animals and the owners, with origins traceable as far back as ancient Greece.

Today, that tradition has been extended to packaged products, trademarked systems, and companies in every industry being offered with a brand now executed as a logo and brand position to signify its ownership, including ownership of any proprietary processes or ingredients that go into creating that product. Executing it with a red-hot iron is less frequent in non-livestock situations, but is…an option.

A brand, however, goes well beyond that physical claim. It’s bigger in that your brand is also what people think of the moment they hear the name or see the symbol representing a particular product, company, country, or person. That is, your brand is what you are known for in the world – part reputation, part expertise, part factual history, part public claims, and more. For that reason, you can influence what your brand is in the world, but you can’t actually control it. Even those ranches that literally burn their symbol onto calves’ hips can’t control what their brand is in the minds of people with whom they interact, but they can influence it.   

For example, companies spend heavily on advertising to influence what people think of their branded consumer goods, whether the product is toothpaste, beer, a car, a cell phone, paper towels, and so on. Ultimately, though, a product’s true brand – what people think of when they think of it – is formed based on a combination of user experiences, ads, product reviews, price, customer service, availability in the marketplace, and even real-world events like the Tylenol poisonings or the gas tank explosions of a very popular U.S. automobile.

It’s also notable that how a company or person responds to real-world events also influences what the brand will be. Tylenol is still popular today – and has even expanded its product line – because when those poisonings happened, the makers of Tylenol showed empathy from day one, cooperated with investigators, was cleared of wrongdoing, and changed its packaging to prevent future occurrences. The automaker, on the other hand, tried to downplay the explosions, lied about when designers knew about the problem, and blamed the drivers who rear-ended the exploding cars. As a result, that company’s brand – and sales – were hurt badly, they had to defend against lawsuits, and the model’s brand name became so toxic it had to be dropped from the line-up and hasn’t been revived even decades later.

In the end, a solid, trustworthy brand is usually the result of a good, dependable product design or honorable provision of services, telling the truth, being as helpful as possible under current conditions, and advertising its story with a positive attitude. Of course, any of these elements can come undone in many ways, and some people and companies don’t want their brand to be “solid and trustworthy,” but more like adventurous, care-free, sexy, fashionable, fun, affordable, crafty, super-patriotic, financially smart, religious, etcetera. While you can’t control what your brand will be to everyone, the first step in influencing what that will become is to decide what you want it to be.

Why Do Insurance Companies Use Lame Humor in Their TV Ads?

As it happens, we have written and produced a number of insurance company TV and radio commercials, as well as print, outdoor, and web ads. Ours were for health insurance, and largely not humor-driven, but we suspect you are thinking more of home and auto insurance. Still, w get where they are coming from.

There are actually several solid reasons why many insurance companies use humor – lame or otherwise – in their TV commercials instead of focusing on their product attributes.

1. Humor sells. It’s been proven time after time, year after year, and it really comes down to this: People buy from companies they like…and people generally like you more if you make them smile or laugh. Of course, that right there is the hardest part – knowing how to be genuinely funny, yet not do so in a way that insults your prospect or is interpreted as a “cheap shot.” The fact that you asked your question in the way you did shows that some insurance companies are NOT very good at being funny.

2. Insurance “facts” can be elusive. A friend of mine has been an insurance agent for many years, and when he is asked questions about what is covered and when, MOST of the time his answer starts with, “That depends…” Why? Because insurance is about risk and most insurance is personalized to fit the person, family, property, or company being insured. In ads, then, the insurance company needs to be relatively general about what they promise, because they always reserve the right to NOT insure you if they don’t want to risk it. Thus, it’s easier to use humor and avoid promising too much.

3. U.S. insurance laws vary from state to state. We’re not sure how car and home work in other countries, but in a country where the insurance laws can be 50 kinds of different based on geography alone, it’s often easier to make a few apropos jokes in your ads and leave the details to individual conversations between sales reps and their prospects.

4. Being forced to buy insurance rubs some people the wrong way. In most U.S. states – maybe all by now – anyone who owns a car is required to buy car insurance. Why? A car can do real damage real easily, so it protects us all. Likewise, mortgage lenders require anyone who buys a house to have home insurance. And many companies require contractors to have business insurance to do work for them. It’s good to have, but can be expensive, especially to someone who is barely getting by…thus, the resentment. So, humor can be an effective way to take the edge off of talking about something that people resent having to discuss at all.

5. Done well, humor makes you more memorable. We have good reasons for not choosing GEICO car insurance, but their use of the gecko as a “spokesperson” is brilliant. Some of those commercials fall flat, but most of them over the years have been great, and few would notice or remember the GEICO name without the gecko. In fact, the few times that I’ve seen competing insurance companies do ads insulting the gecko, the ads fail because readers remember the gecko, not whatever sales points the other guy was pushing.

As you suggested in your question, humor is not always the right tool to use, and it’s often done badly. When it’s done right, however, a humorous TV commercial can be very effective and incredibly memorable, especially for topics and products that are hard to be specific about. And effective commercials are never lame.

Do a Lot of Large Companies Advertise Their Brand Instead of Their Product? If So, Why?

The short answer to this is, “Yes!” It is literally called Brand Advertising. Yes, many companies absolutely do focus their ads on promoting their corporate brand instead of individual products, and in most cases they should. Why?

1. Most large companies create and/or sell multiple products. Those products may all be related, and may even be focused around one core product, or they can be a range of very different products. They can be physical products, like different types of canned fruit, or they can be a service-related product, like mutual funds. What these products all have in common, however, is that they all come from one corporate brand name, so by promoting that one brand name aggressively, the company imbues its entire line of separate products with the perception of possessing the same quality – accuracy, toughness, innovation, flavor, or whatever the brand is known for – even though the amount of those qualities each product possesses will typically vary.
   
   For example, the Apple corporation often promotes the Apple brand as innovative, stylish, high quality, popular, and slightly exclusive parts of a great lifestyle. That leads people to expect those qualities in ALL Apple products, from iPhones to MacBook Pros and from Apple Watches to Apple TV+ productions. And because they have spent most of their marketing dollars creating their immensely strong brand perception for Apple overall, new products and services they introduce usually sell well almost immediately, which lowers long-term marketing/sales costs while enhancing customer satisfaction.

2. Brand advertising costs less than product advertising. Think about the Colgate brand for a moment. The toothpaste people. Every national ad they put out is either mostly or completely about the Colgate brand, not an individual product. That’s because they know that, when you go to the store, the Colgate name – not the product name – will be one of the first things you see on the dental care aisle. And whatever type of toothpaste you want, Colgate will have an option – known as a sub-brand – there for you. You will also see Colgate mouthwash, Colgate floss, Colgate tooth whiteners, Colgate toothbrushes, and more. So, although they do advertise distinct products via promotions, point-of-sale (POS), dental practices, and narrowly targeted media, their ad dollars go a lot farther by focusing their major ad buys on primarily promoting the Colgate brand, which in turn shies a light on ALL of their individual products.

3. Brand advertising is essential to Direct-to-Consumer (DTC) brands – Allbirds footwear, Saatva matresses, Harry’s shaving products, Chewy pet supplies, Stitch Fix clothing, Warby Parker eyewear, and more. Many DTC brands launch as start-ups and start-ups need to be ready to alter their product offerings in their first few years as they work to establish a niche following. Focusing on the brand, not the products, in advertising does that.

4. Brand advertising supports sell-in to distributors and retailers. For large brands to sell their products to consumers, traditionally they first need to sell-in their corporate branding message to and through sales channels. It’s easier to get a retailer to carry your products, for example, if you are Proctor & Gamble or Clorox than it is if you are a small company that few people have ever heard of. That’s a vast generalization, but it’s still true. Thus, although consumer packaged goods (CPG) companies do a lot of marketing of their individual consumer products, in business-to-business venues, they are at least as likely to promote their corporate brand first in the hope that more and faster broad recognition will get them a chance to sell-in their branded product lines.

5. Most large companies are public companies, so by advertising their brand more than their individual products, they also support their stock price. This is a good practice overall, of course, but also helps protect the company during times when one of their products starts to lag in popularity or has a crisis. For example, a packaged foods company could have a product that is popular for years, then loses marketshare because societal tastes change or there is a “health scare” in the industry – even if that specific product isn’t involved. By consistently supporting the corporate brand, the company can survive a hit to one of its product brands until it can re-formulate, make some other shift to the brand, or shut it down and put resources into a different product.

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   There are also times and places when a company may want to focus its ads and other resources on products rather than on a core brand name. This is especially true if the corporate brand is already strong and positive enough to give its product lines a beneficial “glow.” But advertising your brand always has more benefits than liabilities.