The Advertising Equation Isn’t Broken; It’s Incomplete
By Jonathan David Lewis
Advertising Remains a Powerful Tool for Growth, but Something’s Missing
Einstein’s equations (like E = MC2) simply and beautifully describe the complex world of physics.
When Einstein published his theories in the early 20th century, physicists thought they were getting close to the holy grail of physics — a hypothetical “theory of everything” that would comprehensively describe all laws of nature.
But breakthroughs in quantum mechanics raised questions about Einstein’s theories. Soon, physicists realized that the math behind Einstein’s theories and the math behind quantum physics didn’t work together. Einstein’s math was incomplete. A new approach was needed to comprehensively describe physics.
Similarly, by the middle of the 20th century, the advertising industry developed a simple and powerful equation for mass marketing:
Growth = Message x Media
If a company’s research and positioning were insightful enough, its message creative enough and its media plan smart (and funded) enough, mass marketing would reliably result in growth.
But by the turn of the century, the internet called the effectiveness of the advertising equation into question. Media fragmentation and empowered consumers permanently diminished the “mass” in mass marketing. Mass media, mass marketing and even mass culture were fading. A new equation was needed to drive growth.
Over half a century since advertising giants like Bill Bernbach and David Ogilvy showed us how to use the advertising equation to make brands famous, we’re finally able to articulate the next iteration of the marketing equation:
Growth = (Health x Creativity)Impact
The modern marketing equation my firm developed recognizes the diminishing returns of mass marketing and focuses on something more akin to “quantum marketing.” It starts with an appreciation of the power of organizational health, has a multiplying effect as you elevate creativity above its old domain of promotion and becomes exponential as you embrace the modern concept of impact.
Growth Is Governed By Health: G = H
My firm has spent 20 years researching the connection between internal health and business growth. After two national studies, three books and countless case studies, we have learned that internal attitudes and relationships can impact growth just as much as external factors.
Four internal factors, including alignment, focus, nerve and consistency, are proven to affect growth. A loss of nerve makes organizations make bad decisions, like defining their target too broadly or neglecting to invest in R&D, training or marketing. That fear then translates into a loss of focus as organizations drift from their core identity. A loss of focus turns into inconsistency as impatient companies seek silver bullet solutions and easy answers. And inconsistency turns into a lack of alignment as leadership ultimately turns on each other in frustration.
These four factors act like a governor on your marketing efforts. An unhealthy organization can undermine the smartest, best-funded marketing effort just as much as a healthy organization can make up for mediocre marketing.
The pivotal role of organizational health in marketing has led my firm to revamp our client onboarding process. Every client engagement begins with a formal assessment of the internal health of the organization. We utilize proprietary tools to gauge organizational health among the four factors above. The results are then used to deal with internal issues and improve the marketing recommendations.
Ignoring the impact of organizational health on your growth goals is a lot like never flossing. You can get away with it for a while, but eventually it will catch up with you.
Growth Is Powered By Creativity: G = HC
As I wrote about previously, media fragmentation, consumer empowerment, the freelance economy, easy access to knowledge and more have industrialized advertising and diminished the power of mass marketing. It’s not that advertising doesn’t work anymore, it’s that advertising is often a component of a much broader effort.
Businesses today must elevate the understanding of creativity above promotion to the other three Ps of marketing and acknowledge the obvious: Consumers control the circumstances of the transaction and make buying decisions based on every aspect of a business.
This means a business’s brand must be integrated not just in its promotional efforts, but throughout its pricing strategy, the place in which the transaction occurs and its product. It also means that the answer to your growth problem might be just as much in product innovation or a redefinition of “place” as a new advertising campaign.
John Legere’s unlikely turnaround of T-Mobile is a case study in the redefined power of creativity. Legere’s strategy was to reposition the company as the “Un-Carrier” to distance itself from an industry with a bad reputation. But T-Mobile’s turnaround efforts didn’t just include a major advertising effort.
Instead, T-Mobile simultaneously eliminated service contracts, provided cost transparency, redesigned the in-store experience and featured a series of PR-generating stunts by the CEO himself. The advertising played an important role, but it was just part of a much larger plan.
Growth Is Unleashed By Impact: G = HCI
The fragmentation of mass media is restricting the effectiveness of media tools historically used to achieve reach and frequency. An expanded approach to marketing-led growth is needed.
My firm calls this new approach “Impact.” By seeking leverage, relevance and emotional depth, Impact has the power to lead to exponential growth, but it requires marketers to rethink closely-held assumptions about effectiveness.
Instead of maximum reach, Impact seeks, as Seth Godin put it, a “minimum viable audience.”
Instead of interruption, Impact seeks fewer meaningful interactions that leave a lasting impression.
Instead of unsolicited messages, Impact seeks to be relevant on-demand.
And instead of brute force, Impact seeks to do the most with the least by acting on opportunities discovered at the intersection of culture, industry and business.
The math behind quantum physics challenged our understanding of Einstein’s work, but it didn’t invalidate it. In the same way, advertising remains a powerful tool for growth. But we’ve learned it’s incomplete.
Through three tumultuous decades, the advertising community has bumped and stumbled its way to discover that organizational health, elevated creativity and new principles of impact make the marketing equation deeper, broader and more human than ever thought possible.
Jonathan David Lewis
President and author, Jonathan specializes in the spirit of the matter. Call Jonathan when problems feel ambiguous and morale is low. He’ll know what to do.
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