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How Does Advertising Work?

If you ever want to strike terror into the heart of your advertising agency, just ask them, "How does advertising actually work for me?"

John Wanamaker, 19th century entrepreneur, clearly didn't know when he said, "I know that half of my advertising is wasted, I just don't know which half." Unfortunately, not much has changed. At MediaPost's 2006 Forecast, a speaker speculated that up to 80% of advertising budgets are wasted— for a variety of reasons— not understanding who and how many people buy or what their purchase decision process is, messages which are irrelevant to the majority of the audience or media plans which do not help to engage the audience, and more.

Today's Detroit News (August 14, 2006)reinforced the point in its story evaluating the success of Chrysler's new "Ask Dr. Z" campaign featuring Dieter Zetsche, chairman and CEO of Daimler Chrysler, as spokesman. The News reported, "So far, results are mixed. Among consumers and marketing experts, the ads…are a bit like sauerkraut: some love 'em, some hate 'em. And Chrysler's still wating for a big sales spike…"

Not only has Chrysler's sales spike not arrived,Chrysler's sales were down 40% in July, the first month of the Dr. Z campaign.

A marketing professor chimed in, "…if it doesn't translate in purchased cars, then at least some of the money has been wasted." On the other hand, Chrysler spokeswoman, Eileen Wunderlich said the Dr. Z ads were never intended to be a quick fix. And Chrysler'survey of 149 people in the market for a new cars within 90 days found very high ad awareness (86%), belief that the ads were enjoyable (78%) and memorable (74%), improved perceptions vehicle safety (70%), and other high scores. Also, nearly 500,000 visitors clicked on the Dr. Z web site asking 3.1 million questions about Chrysler products.

In contrast to the research findings, Bob Garfield, a columnist for Advertising Age, panned the commercials, labling them as CHEESY.

The problem is, people inside and outside of DaimlerChrysler have different ideas about what advertising is supposed to do for this car company— for example, get sales now or build awareness and attitudes, maybe for sales tomorrow. And the prognosticators were at odds with consumers (who are the only ones who matter, right?).