Dear Reed,

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many of my creditors feel I lack respect and humility in the way I announced the separation between “Necessities” and “Luxuries” and my change to paying “Luxuries” creditors in Swiss Francs instead of U.S. Dollars. It was certainly not my intent to cause confusion and I offer my sincere apology. Let me explain what I am doing.

For the past five years, my greatest fear as a consumer is that I wouldn’t successfully make the leap from buying primarily “Necessities” to buying “Luxuries.” Most consumers who are focus primarily on paying their heating, water and electricity bills never become truly excellent at buying designer shoes, imported cured meats or fur-lined gloves. So I decided to solve this paying all of my “Luxury” bills in Swiss Francs. Of course many of you have noted that the Swiss Franc is worth less than the US Dollar and by paying you the same number of Swiss Francs that I was previously paying you of US Dollars I am effectively paying you less. I wouldn’t have changed that but letting you in a clearer manner would have been the right thing to do.

So here is what I am doing and why.

Many utilities love selling gas, electricity and water to me because I pay the exact bill that they send over. That is a great option for those companies who provide things that I absolutely cannot live without.

I also love luxuries because they really make life fun. They really are very different from those unfortunate things that I have to buy every month. I really need to focus on acquiring more luxuries as the economy improves without worrying so much about “Necessities”. To do that I need to pay less for “Luxuries”.

So I realized that since buying “Luxuries” and “Necessities” are really two completely different things, with very different values for me. I need to think separately about each type of purchase.

It’s hard to write this after more than 10 years of paying bills promptly and fully, but I think it is necessary: in a few weeks, I will acquire a new legal name “Johnny Warbucks” which I will use as the name I for “Luxuries,” which I will continue to pay in Swiss Francs. I will keep the same name “John Doe” for paying “Necessities”.

“Johnny Warbucks” is still me. I still reside at the same mailing address. In fact, once I change over I’ll make it even better for “Luxuries” creditors by paying bills online as well as with checks. You will get your Swiss Francs even quicker that way. Other improvements will follow. You probably know whether you’re a “Necessity” or “Luxury” but if you start receiving Swiss Franc payments from “Johnny Warbucks” you’ll know for sure. Please be sure to update my name in your database – I’m sure this will not be too much trouble. If you are one of those companies that sells both “Necessities” and “Luxuries” (and you know who you are), you’ll find both a U.S. Dollar payment from “John Doe” and a Swiss Franc payment from “Johnny Warbucks” in your mail. I’m sure that won’t be too confusing.

Paying bills has always been a source of Joy for me. Swiss Francs come in lovely pastel colors and I’m sure you will enjoy receiving them.

I want to acknowledge you creditors for still selling to me and to apologize again to those of you who feel my actions have been unnecessary and confusing. Of course paying you more would be better than talking about it, but this is all I’m prepared to do right now.

Respectfully Yours

John Doe
Aka “Johnny Warbucks”

In our last post, we raised the question of whether Adrant’s announcement that the Up Your Budget “contest itself will be promoted almost entirely within the blogosphere with sites Adrants, MarketingVOX and Boing Boing breaking the story” implied that there was some compensation to the bloggers breaking the story.

We are happy to report that the creator of the promotion, B.L. Ochman has assured us that there was no compensation and she simply followed standard PR practice in getting these sites to break the story (which we understand she is very good at).

BL has a number of other concerns about our comments which are worth reading. You can find them in the comments to our last post.

When journalistic opinion about your industry ranges all the way from “the End is Near” to “The End is Here,” and even your leading industry journal starts publishing doomsday warnings, it may be a good time to find a new profession.

That is exactly where advertising stands today. Network television commands increasingly high premiums but offers less and less to advertisers. The Internet and video games have grown to be huge distractions without yet offering the same opportunities to reach large audiences (at $4 billion, Internet advertising is just one tenth the size of network advertising). And most disturbingly, mammoth advertisers like Procter & Gamble are beginning to divert major dollars to new forms of marketing like word of mouth. It seems as if the world of Darren, the ad executive from the sitcom Bewitched is vanishing before our eyes.

Those who are still slogging it out on the networks fall into two camps –Traditionalists and Entertainers. Traditionalists measure advertising by the gram. A spots value is equal to its related recall plus the incremental sales it generates. If the ad builds the brand and sells product, it is good.

Entertainers believe that making a memorable commercial builds the brand. They are not as keen about the link between the commercial and the brand, believing that if they build a good advertisement, people will come to the brand. In its newest form, pioneered by Crispin Porter, this has taken the form of ads which seek to shock or surprise the audience and generate buzz. Dominating water cooler conversation has become the gold standard for a successful ad in this school.

At this blog we are all former brand managers and were all trained to be Traditionalists. Recently, we have been bombarded with irrelevant ads that seem to have no connection whatsoever to the core brand values, from the impenetrable Burger King “Coq Roq” spots to the mystifying American Express ‘Andy Roddick’s Mojo” fiasco. And we know that these ads were developed by smart people working for smart marketers who are watching consumers just as hard as we are. This has caused us to wonder what was missing in the Traditionalist formula that seemed to be pushing so many people to the Dark Side of entertainment advertising.

The answer is obvious. And it is the same thing that makes everyone think that advertising faces imminent demise. Consumers are fed up. And sooner or later, that has to hurt someone. Do you remember when there was only one phone company? We used to pay much, much more for our phone service then. And we didn’t love the phone company. But we didn’t have much of a choice. So when deregulation happened, we were only too happy to flock to the Baby Bells for cheaper calls. We were not just saving money, we were finally punishing an institution that punished us.

As advertisers, we have been punishing consumers for years. We interrupt programs they enjoy with our messages. If they listen and buy our products, we assume we have done a good job. After all, they got to watch the shows they viewed our ads on for free, didn’t they? So there must be a fair value exchange in the advertising, right?

Wrong. Most consumers never liked being interrupted by advertising. And they never liked most advertising. And if it worked, they resented us for it. And now the value proposition – if it ever worked as we believed – has changed. Most consumers pay a cable company for their TV signal, so it doesn’t feel free to them. And they have many other ways to divert themselves during commercials – from hundreds of other channels to the Internet and video games. Not to mention time-shifting devices like TiVo.

So where do we go as advertisers? If we don’t believe that pure entertainment drives sales or builds brands, should we abandon traditional advertising?

We believe there is a Third Way. To be effective, we suggest that advertising needs to be persuasive and build the brand. But we also believe that the consumer must benefit for the time spent on the ad. And we believe that product information is not a sufficient benefit for an entertainment media. We suggest that advertisers ought to be producing spots that entertain and build the brand.

There are good examples of this. Some of the best are being created by the networks themselves. We have blogged the marvelous ads by USA Networks which are both stories in themselves but also give USA Networks a coherent theme (‘unique characters’) and promote individual series. These are hardworking ads that also entertain. And they’re durable – you don’t mind watching them again. The SciFi network has also done some extremely creative spots that link right back to the brand.

So our proposal is that advertising must now do more than sell product to remain viable – it must entertain. The ad itself must be a worthy use of the consumer’s time if we expect her to watch. Along the way, we might also considering moving the ad blocks to where they belong – at the beginning and end of the program, and perhaps a single commercial break for 1 or 2 hour shows. Many will say that nobody would watch these ads, but we at ThirdWay have been to the cinema in the UK and seen patrons with reserved seats and published movie start times show up early in droves to watch the excellent advertising.

Art can be functional. The design world has long understood this. But in advertising we have driven a wedge between those trying to create art with advertisements and those trying to build brands. To survive, advertising must bridge the gap.

We have secured the URL: www.thirdwayblog.com for the ThirdWay Advertising Blog, so feel free to reach us there. The URL: www.brandtrainers.com/blog/blog.html will continue to work

The atom feed for the blog is: http://www.brandtrainers.com/blog/feed/atom.xml