Phil Hawthorne's Blog

I’ve always been pretty sus on advertising, and always take everything that’s offered with a grain of salt. After all, the purpose of advertising has one aim, to take the money out of my pocket, and put it into the advertisers.

Caption reads: Forget that ethics shit, let's make some money

In the past couple of years, in Australia at least, we’ve seen the introduction of multi-buy specials in our supermarkets. Buy in bulk, and save. Well at least that’s what we’re supposed to think. Everyday we’re bombarded with marketing and special promotions. From the latest specials at the supermarket, to the latest and greatest vehicle technology. But how dumb do companies really think we are?

One thing I’ve come to learn recently, is that information is power. And this is especially true for marketing and advertising. It’s amazing how in this digital age, how free we are to give out our personal interests, what we buy, where we go, all for free to advertisers.

I think a lot of people are naive, or plainly just don’t care. But perhaps if they knew how much a company or advertiser knows about you, they’d be scared. Facebook, something which almost anyone online now uses, is a massive marketing engine. People hear how much money Facebook is worth, but I honestly don’t think people make the connection as to why Facebook is worth so much. Most people would say it’s because everyone uses it. Others would say it’s because the people who created it are smart, and not everyone can create Facebook (true – but not the reason). The fact is Facebook is worth billions if not trillions of dollars because of the information and access to the people that use it (you and me), and the ability for advertisers to market to the people they exactly want to.

Facebook makes its money from advertising. It’s no secret. But every bit of information you share on Facebook is used to serve you advertising that you would find appealing (and make Facebook money of course), and most of all take the credit card out of your pocket, and hand over your cash to. Even the basic details. from your age, sex, location, are valuable bits of information advertisers can use. Say I wanted to advertise an awesome poker championship coming up, I could advertise it on Facebook to males between a certain age, and within a kilometer radius of the venue. But what if there’s gonna be heaps of strippers, married guys won’t be allowed to go to that, so I can even choose to only advertise to males that are single.

Now this can all be done using standard loyalty cards and rewards programs, if they had a strong marketing focus. But Facebook takes it one step further for advertisers. You know all those pages you keep ‘Liking’? Maybe you’ve put your profession down as a cheese lover, who also checks out lolcats everyday. Facebook uses that too. All of a sudden, when I have my totally awesome poker night with pussy (of both furry kinds), and free cheese and biscuits, I’ll be able to make sure my ads reach YOU and only sick people like you.

Google works on a similar basis. Google’s new social network Google+ will undoubtedly be another information harvesting farm for them, to which they’ll use your information to serve you ads in search results. If you use Gmail (ps if you’re still using hotmail – get on gmail and feel the freedom – and if you use Hotmail and Internet Explorer – stop reading my blog, come back when you’ve finally woken up from the awfulness of Microsofts web technology), Google will scan your e-mail messages for keywords, and based on those, build a profile about you and serve advertising based on that.

To me, it all sounds a bit like Big Brother(s) watching us. Keeping tabs on us. Of course Google and Facebook don’t give out your details to advertisers, but at the end of the day, we’re paying for our use of their services with our information, which they make a mint off.

Loyalty cards, like your FlyBuys cards are just another way for advertisers to encourage you to buy a certain product, and promote loyalty to a store. I think the major loyalty cards really have a good model, because not only can they do this, and offer rewards like store credits, blenders etc for points that would cost thousands of dollars to earn, they can also sell the data they collect. This information can be very powerful for companies to find out their demographic market – who’s buying their products. This can turn a no name brand into a household name if marketed correctly, all based on the type of people mostly buy their products.

If you sold some new product, and you wanted to get the most money from consumers, what would you do? First you’d find out who’s buying your products. Walk-in FlyBuys, with its huge user base, you can see from their data that mostly elderly women and men from “lower class” areas purchase your product. Whereas the more wealthy younger professionals don’t buy your product at all. How can you target their money? Well now you know who to target, you change your branding, maybe put a fancy name on it (“Selections”, “Select”, “Finest”, take your pick), some fancy wrapping, put the same product inside, and bump the price up by 75%, and watch profits increase.

Seems a bit ridiculous doesn’t it? I mean how can people fall for that? You’d be surprised. Ask anyone that works in retail – especially supermarket employees. How many times does someone hold up the queue to make their bill $30 so they get 4c off a litre of Petrol? Happens daily. And the stupid thing about those people, the maximum you can save on those dockets (assuming you’ve got a 4×4 or a 150 litre supercar tank) is $6.00. That’s the maximum you’re allowed to save on petrol from those dockets, and as I mentioned you’ve got to have a very big tank. I always laughed (and got pissed off) at the customers that would run off and buy a chocolate or two to make their bill over $30. At the end of the day, they’re losing money – the supermarket is getting that money – and all because their marketing works brilliantly at expoloiting humanities flaws.

There’s dodgey tactics like this everywhere though. But the most absurd and ridiculous I’ve ever seen would have to be the latest promotion from Mc Donals, to celebrate their birthday in Australia.

Who’s seen the TV ads, or heard the radio ads, or even the billboards around town, advertising $1 cheeseburgers? A really great price, but as always there’s a catch. It’s only available for 1 hour everyday! That’s right, the offer is only valid for 1 hour, after that, they’re full price. Why would maccas do such a thing? Simple. Marketing. Not only do they have an excuse to put billboards of the maccas logo up everywhere, advertise Maccas on TV and radio so your kids pester you to have it for dinner, they also get to charge the people who don’t read the fine print full price when they come in.

Now the offer only lasts for 40 days, so their cheeseburgers will be $1 for 40 hours. Not even 2 days! And what do we have to pay for this?  Well we’ll have over a months worth of advertising this deal to sit through and of course the hour when the cheeseburgers are on special is in the middle of the day, when most people are at work.

To show how stupid this campaign is, I thought I’d do some rough calculations. Let’s assume the following, very modest figures.

1. Mc Donald’s will run six 30 second adverts on, 3 commercial stations every night, in each capital city. That’s 63 minutes of TV adverts every day.
2. They’ll also run three 15 second radio adverts, on the top five commercial radio stations in every capital city. That’s just over 26 minutes of airtime.
3. Combine those two figures (so in total 152 minutes per day) times the number of days of the promotion (40).

The grand total of advertising airtime is over 100 hours, for a special that will only be valid for 40% of that time! Now remember the figures I used are very basic, and don’t include rural areas.  I think they’re very modest. The actual advertising time would probably be much greater.

So today’s lesson: The human race overall is dumb, and we are all just like sheep being herded and persuaded to give over our money.