The errors of efficiency

Introduction

We live in the era of efficiency.

The advertising industry is infatuated with it. Intoxicated by it. Enamoured and enthralled by it. We want our teams to be lean. Our processes to be agile. And our output to be optimised. 

Instead of focussing on making our work bigger, we focus on making it work harder. Instead of aiming to maximise our impact, we aim to minimise our waste.

A century ago, American industrialist John Wanamaker is claimed to have said: 

“Half the money I spend on advertising is wasted; the trouble is I don't know which half.” 

 Today, marketing strives to resolve this riddle. It aims to not only identify Wanamaker’s waste, but to eradicate it.

According to Ebiquity, the world leader in media investment analysis, our relentless search to remove the redundant manifests itself in three different ways:

 “Advertisers perceive paid social media and online video to deliver ROI because they are relatively cheap, can reach defined audiences and provide a measurable response.” 

In short, we prioritise cheap channels to improve our ROI. We invest in touchpoints which can target those most likely to convert. And we avoid advertising on media that commands low levels of attention.

At the same time, traditional broadcast communications are increasingly thought to be an inconceivable indulgence. They are mass. They are ignored. And they are expensive.

I believe, however, that these three critiques are fundamentally flawed.

This article argues that efficient doesn’t necessarily mean effective. It argues that more productive doesn’t necessarily mean more powerful. And it argues that being mass, ignored and expensive are not points of weakness but, in fact, points of strength.

Let’s run through the three errors of efficiency one at a time.

Error 01: Mass media is wasteful because it is untargeted

In his book ‘Free: The Future of a Radical Price’, Chris Anderson makes the case against mass communications:

“The nature of the advertisement is different online. The old broadcast model was, in essence, this: Annoy the 90 percent of your audience that’s not interested in your product to reach the 10 percent who might be (…). The Google model is just the opposite: Use software to show the ad only to the people for whom it’s most relevant. Annoy just the 10 Percent of the audience who isn’t interested to reach the 90 percent who might be.” 

Anderson’s argument is a well-worn one in modern marketing circles: using technology to target specific segments reduces waste.

At first glance this makes sense. When you communicate on mass media, whether it’s a 30 second spot on prime-time TV, a press ad in a National newspaper, or a 6 sheet in a city centre, you will reach a large number of those who are in your target market. But you will also reach a large number of those who are not. 

Imagine, for example, that you’re advertising a luxury car. Broadcast communications will inevitably reach those who are too young to drive, those who are too old, those who don’t have a driver’s license, those who rely on public transport, those who are banned from driving and those who can’t afford a premium vehicle. 

But considering these segments to be ‘waste’ ignores one the most foundational roles that brands perform. It ignores the idea that brands not only provide functional and emotional benefits, but self-expressive ones.

According to David Aaker in his book ‘Building Strong Brands’:

“Russel Belk, a prominent consumer behaviour researcher, once wrote, “That we are what we have is perhaps the most basic and powerful fact of consumer behaviour.” What Belk meant was that brands and products can become symbols of a person’s self-concept. A brand can thus provide a self-expressive benefit by providing a way for a person to communicate his or her self-image.”

In our example, by driving an expensive brand of car, the owner communicates their financial status. The car’s design might communicate their sense of style. And its provenance might communicate their sensibilities.

The fact that everybody understands what the brand represents makes it a more effective signal of what the buyer represents. Advertising to those who cannot afford the brand makes the product more appealing to those who can. For a potential audience to buy the brand, they have to know that a much wider audience aspires to do the same.

As the great philosopher of advertising, Jeremy Bullmore, once put it:

“If a luxury car only ever advertised to people in the market for a luxury car in the next 6 months then soon, nobody would be in the market for that car, as you mainly buy one to be the envy of the people who can’t afford it.”

Over decades we have all been exposed to Mercedes, Porsche and BMW’s brand building activities. We have seen Ferrari and McLaren’s endeavours in F1. We have witnessed celebrities, sport stars and members of the royal family being chauffeur driven in Range Rovers, Bentleys and Rolls Royces.

We may never be in the market for these motors. We may never drive one from the forecourt. But our collective understanding of these brands makes them valuable status symbols for those who are and those that will.  

Sir John Hegarty, founder of BBH:

“A brand is made not just by the people who buy it, but also by the people who know about it. That is so important, and we've forgotten that lesson. Take Rolls Royce. I'm sure neither you or I will ever buy a Rolls Royce. But we know who they are. We know what they stand for. We know what values they have. Therefore, it adds to their value and their desirability. We've forgotten that.”

Through this lens it becomes clear that reaching a large audience is not wasteful. It’s valuable. 

But it doesn’t stop there.

Traditional broadcast communications not only reach a large audience, they reach that audience publicly. In mass media, not only do many people see your advert, but they see many other people see your advert as well. When you broadcast your brand, everybody knows that everybody else knows what you stand for. 

When you go beyond an audience and establish your brand within a culture, you become part of the public consciousness. You become common knowledge. Kevin Simler refers to this effect as “Cultural Imprinting”: 

“Cultural imprinting relies on the principle of common knowledge. For a fact to be common knowledge among a group, it's not enough for everyone to know it. Everyone must also know that everyone else knows it — and know that they know that they know it... and so on. So for an ad to work by cultural imprinting, it's not enough for it to be seen by a single person, or even by many people individually. It has to be broadcast publicly, in front of a large audience. I have to see the ad, but I also have to know (or suspect) that most of my friends have seen the ad too." 

Simler goes on to explain how it is the inefficient communications channels, the channels which Anderson derides as the "old broadcast model", which seem most effective at achieving cultural imprinting. These channels reach a large audience, and more importantly they reach a large audience who all know that a large audience has been reached.  

"Expect to find imprinting ads on billboards, bus stops, subways, stadiums, and any other public location, and also in popular magazines and TV shows — in other words, in broadcast media. But we would not expect to find cultural imprinting ads on flyers, door tags, or direct mail. Similarly, internet search ads and banner ads are inimical to cultural imprinting because the internet is so fragmented. Everyone lives in his or her own little online bubble. When I see a Google search ad, I have no idea whether the rest of my peers have seen that ad or not.” 

Cultural imprinting makes sense in theory. But does it work in practice? Do people think that their online activity exists within a bubble? Or do they assume their friends see the same digital ads that they do? 

To find out the behavioural scientist Richard Shotton asked 257 people to imagine that they had seen an ad for a chocolate bar online. Shotton then asked his panel how many other people they would have expected to have also seen that ad. The results were surprising. Only 46% thought that more than a million people would have seen it. That figure increased to 71% when he told the respondents that they had seen the ad on TV. People, it seems, intuitively believe that public broadcast media reaches a larger audience than private, targeted media.

To summarise, yes traditional communications are mass, but that does not make them wasteful. Mass media reaches a large audience, imprinting brands on culture and imbuing them with self-expressive benefits.

In an article for Campaign Dave Trott captures this neatly:

“With online’s precise targeting, no one but you sees the ad. It’s like a salesman knocking on your front door and delivering a sales pitch. No one hears it but you, it’s a private conversation. But in mass media (TV, posters, press) everyone else is watching and listening in. So you know everyone will have an opinion about your purchase. It isn’t a discreet transaction, your choice now says something about you. What you choose now sends out a message to everyone else. Just by virtue of the fact that everyone else is exposed to the message at the same moment you are.” 

But this isn't the only error or efficiency. Broadcast communications are also criticised for using low-involvement media. This is the topic we'll look at next.

Error 02: Mass media is wasteful because it is ignored 

In November 2020, Professor Karen Nelson-Field of Amplified Intelligence gave a presentation titled Not all Attention is Equal. 

The research found that video ads on Instagram received active attention for 89% of their duration. Facebook ads garnered considerably less at 48%. YouTube and Broadcast Video on Demand (BVOD) faired even worse with just 38% and 37% respectively. Bottom of the pile was the one traditional media channel that was tested. During ads on live, linear TV viewers only paid attention for 35% of their play time.

Professor Mark Ritson summarises the problem rather poetically:

“Advertising is a low-involvement medium. It is unwelcomed, unwanted and it interrupts the high-involvement content we chose to consume. That makes advertising often partially seen, actively avoided or only aurally consumed. TV advertising works from the cracks of quotidian existence, somewhere between making a coffee and an argument with your dad about the cat.” 

It’s easy to see how low-attention communication channels could be seen to be inefficient. If two-thirds of each TV ad doesn’t receive active attention, isn’t that two-thirds of spend that is wasted? 

A group of contrarian researchers believes that the answer is no. The academics argue that when it comes to brand building, low-attention equals high value. 

To understand the argument let’s look back to the turn of the 20th century. Here’s Paul Feldwick, writing in his essay ‘Exploding the Messaging Myth’: 

“Back in 1903 (…) Walter Dill Scott published a book called The Psychology of Advertising. Scott thought that advertising works by creating the right kind of associations for the brand. Scott also knew that advertising can influence people's attitudes to brands without them being able to consciously recall seeing the advertising itself. (…) One young lady asserted that she had never looked at any of the cards in the streetcars in which she had been riding for years. When questioned further, it appeared that she knew by heart every advertisement appearing on the line and the goods advertised won her highest esteem. She was not aware of the fact that she had been studying the advertisements and flatly resented the suggestion that she had been influenced by them.” 

Scott’s subject did not pay any active attention to the streetcar adverts. Yet they still influenced her attitudes.

Admittedly, Scott’s story isn’t all that scientific. It’s anecdotal. It’s a single participant. There’s no attempt to quantify the number of ads, levels of attention or frequency of exposure. For more rigorous research, we have to fast forward 60 years to an experiment conducted by one of the 20th Century’s most famed social psychologists. 

In 1964, Leon Festinger partnered with his colleague Nathan Maccoby to understand how people process messages during periods of distraction. A summary of the experiment appears in the book, ‘The Choice Factory’:

“Festinger and Nathan Maccoby, academics at Stanford University, recruited members of college fraternities. They played those students an audio argument about why fraternities were morally wrong. The recording was played in two different scenarios: students either heard it on its own or they watched a silent film at the same time. After the students had heard the recording, the Stanford psychologists questioned them as to how far their views had shifted. Those who had heard the argument at the same time as the silent film were more likely to have changed their opinion."

The silent film provided a distraction which reduced the level of attention that was applied to the audio argument. But rather than decrease the argument’s potency, it increased its power.

The psychologists hypothesised that participants in the undistracted, high-attention group were able to generate counter-arguments that maintained their existing opinions and avoided the discomfort of experiencing cognitive dissonance. In the low-attention group, on the other hand, the participant's cognitive defences were not invoked and their ability to counter-argue hampered. 

Feldwick again summarises the argument beautifully:

"When we don’t notice we are being influenced, we cannot argue back."

The psychologist Daniel Gilbert found that counter-argument was an operation of System 2 - our slow, effortful, conscious mode of mental processing. On the contrary, he believed that System 1 – our fast, automatic, intuitive mode – is much more accepting of information.

The Nobel Prize winning Daniel Kahneman provides an overview of Gilbert's experiment in his book, ‘Thinking Fast and Slow’. 

“Participants saw nonsensical assertions, such as “a dinca is a flame,” followed after a few seconds by a single word, “true” or “false.” They were later tested for their memory of which sentences had been labeled “true”. In one condition of the experiment subjects were required to hold digits in memory during the task. The disruption of System 2 had a selective effect: it made it difficult for people to “unbelieve” false sentences. In a later test of memory, the depleted participants ended up thinking that many of the false sentences were true. The moral is significant: when System 2 is otherwise engaged, we will believe almost anything. System 1 is gullible and biased to believe, System 2 is in charge of doubting and unbelieving."

Festinger and Maccoby found that their audio arguments were adopted more readily when their participants were distracted. Similarly, Gilbert discovered that statements, even if explicitly false, were accepted as truth when his subjects' conscious cognitive faculties were otherwise engaged. 

But what does all of this mean for brand communications? Can advertising really be more influential when it is paid less attention. Kahnman starts to hint at an answer: 

“There is evidence that people are more likely to be influenced by empty persuasive messages, such as commercials, when they are tired and depleted.”

Dr. Robert Heath is perhaps the individual to have provided the deepest analysis of how levels of attention impact advertising effectiveness. Heath's work weaves many of the above findings together into a single theory that he calls Subconscious Seduction.

To greatly simplify, Heath suggests that ads that receive active attention, are consciously processed, deeply analysed, counter-argued and deprioritised to short-term memory. On the contrary, ads that receive passive attention, are sub-consciously processed, shallowly analysed and stored in our long-term memory. 

Heath summarises his case in his book, ‘Seducing the Subconscious’:

“My theory is that the most successful advertising campaigns in the world are not those we love or those we hate, or those with messages that are new or interesting. They are those (…) that are able to effortlessly slip things under our radar and influence our behaviour without us ever really knowing that they have done so. And the way in which these apparently inoffensive ad campaigns work is by “seducing” our subconscious.” 

Together the work of Scott, Festinger, Maccoby and Heath indicates that brand building advertising doesn't work by communicating persuasive messages to an attentive audience. Instead, it works by consistently exposing an inattentive audience to images, music and emotional triggers that lodge themselves in a consumer’s subconscious. 

In his book, ‘Advertising: The Uneasy Persuasion’, Michael Shudson provides a nice conclusion to this chapter.

“Ads may be more powerful precisely because people pay them so little heed that they do not call critical defences into play.”

But this isn't the only error or efficiency. Broadcast communications are also criticised for being overly expensive. This is the topic we'll look at next. 

Error 03: Mass media is wasteful because it is expensive  

On January 30th 2019, four days before the New England Patriots faced off against the Los Angeles Rams at the Super Bowl, Digiday published an article asking a simple question. What could the five-million-dollar cost of a Super Bowl ad buy in more modern media channels?

The publication calculated that, for the cost of a single 30 second spot, you could buy 2.5 billion impressions on Snapchat, 1.7 billion impressions on Instagram, Facebook, Pinterest or Reddit, or 625 million impressions on LinkedIn.

The message is clear. The Super Bowl ad is inordinately expensive and its contemporary counterparts offer far greater efficiency and far greater value for money.

However, as you might expect by now, the truth is not quite so simple.

Tom Goodwin explains how banks use inefficient, expensive architecture to build trust:

“When you walk the Main Streets of the USA and High Streets of the UK, virtually without exception the largest, most grand and demonstrably expensive buildings are banks. This wasn't because Banks liked to throw away money, or that they had more than enough, it was because the architecture of solidity and trust was a vital brand asset to convey, it's all Banks had. Granite doors, Roman Portico's, even battlements and iron grids became purposefully wasteful manifestations of confidence. This was a company with money, with conviction in their own future, this was a place worth leaving your money.” 

So, what’s happening here? 

Work from a series of evolutionary biologists suggests that the cost of a piece of communication can, itself, communicate. To understand this idea, we must look back to the 19th Century. We must look back to Charles Darwin. 

Darwin’s theory of evolution stated that small mutations made individual animals more or less suited to their environment. Those whose traits benefited them would be more likely to survive, whilst those whose variations hindered them would fall foul of the opposite fate. Over time, species would evolve, converging towards an optimal set of natural abilities.

But one thing puzzled Darwin. Why have some animals evolved with attributes that seem to have no functional utility? Why do some, even, have attributes that seem to hinder, not help, their survival.

Rory Sutherland writing in his book Alchemy:

“In a letter to a friend, Darwin remarked that ‘the sight of a feather in a peacock’s tail’ made him ‘physically sick’. The reason for this strange aversion was that the male peacock seemed a living refutation of the theory of evolution through natural selection – the idea that something so beautiful and yet so ostensibly pointless sat more easily with the idea of a divine creator than with the idea of natural selection. After all, a decorative tail in no way enhances fitness or survival and rather makes the peacock conspicuous to predators, and is an encumbrance when it needs to evade them. The ability to lurk unobtrusively in the shadows is an advantage both to predators and prey, but being highly visible seems to be a disadvantage to both.”

Why would Peacocks have such seemingly unnecessary plumage? Why would the male bowerbird spend thousands of hours building such extravagant nests? Why would deer benefit from such cumbersome antlers? 

Darwin soon found his answer. He realised that evolution relied not just on which animals survived, but also on those which reproduced. Darwin deduced that the traits that he had perceived to be impediments to survival, were actually advantages when it came to sexual selection. Those who prospered despite their physical encumbrances, he believed, must be stronger, and thus more attractive mates. Or to put it another way, sexual partners deduce that the animals who waste resources must have enough resources to waste.

Shane Parrish, at the fantastic Farnam Street, explains:

“Animals don’t just need to survive; they also need to pass on their genes. This means they need ways of signalling their worthiness to members of the opposite sex that are costly enough to be meaningful. A peacock’s tail is exactly that. To survive with such unwieldy plumage, a bird must be strong, healthy and smart—a good mate. The grander its feathers, the more desirable it is. The same is true for many other seemingly illogical features animals possess. Biologist Amotz Zahavi christened this the handicap principle, based on the idea that animals signal through features that are not beneficial for their physical survival, just their genetic survival.”

But how does the field of biology relate to the world of business?

In 2004 the marketing icon Tim Ambler published a landmark paper in The Journal of Advertising Research that drew a direct connection between the way that animals and brands signal their strength. Both, he argued, communicated through conspicuous waste: 

“Evidently, just as a female peacocks are drawn to meet with the largest, most spectacular tail feathers because the display signals superior biological fitness, consumers are attracted to brands that invest in lavish displays like Super Bowl commercials because such extravagance signals a high-quality, successful brand.” 

Ambler hypothesised that just as animals signalled their strength through unnecessary adornment, brands signalled their strength through unnecessary spend. 

The cost of the 5-million-dollar Super Bowl commercial communicates the advertiser’s financial health in a way that 1.7 billion Facebook impressions never could. The extravagant spend is to the brand what the plumage is to the peacock. It is its very inefficiency that makes it effective.

Sir John Kay, the British Economist who has held chairs at the London School of Economics, the University of Oxford and London Business School, takes this argument even further.

In 2001, Kay wrote an article in Business Strategy Review titled ‘Is Advertising Rational?’. The paper made the case that the cost of an advert is a more reliable piece of communication than the message that it delivers.

“Advertising is not a process by which gullible consumers are persuaded to buy things they don’t want (…). Instead, it furnishes consumers with some useful information. It is not so much the claims made by advertisers that are helpful, but the fact that they are willing to spend extravagant amounts of money on a product that is informative.”

Kay continues:

“Consumers would be silly to respond to direct messages proclaiming that one brand of product is superior to another, for the advertiser would have an incentive to proclaim that whether it was true or not. But, the consumer would be silly to ignore the fact that the advertiser is willing to ostentatiously spend a large amount of money advertising. The existence of the advertising itself provides information which the rational consumer can use.”

In short, where you communicate is as important as what you communicate.

Expensive media signals brand strength. Inefficient communication carries a “costly signal” that the brand being advertised is of high quality, that it is in strong financial shape, and that it is likely to continue being strong and successful for the foreseeable future. 

To test this theory, Thinkbox asked over 3,500 people if they perceived brands to be “high quality”, “financially strong” and “confident” when seeing them advertised in various media channels. TV, the archetypal expensive media channel, scored 43%, 50% and 58% respectively. Social media, on the other hand, scored significantly lower at 19%, 21% and 40%. 

The research suggests a broader truth. On every single metric expensive, traditional media (TV, newspapers, magazines and radio) outperformed cost-efficient digital channels (social media and video sharing sites).

I’ll close this chapter by re-referencing Alchemy, in which Rory Sutherland sums up the principle of “costly signalling” succinctly: 

“The potency and meaningfulness of communication is in direct proportion to the costliness of its creation (…). This may be inefficient – but it’s what makes it work.”

Just as a peacock’s plumage signals strength, and the battlements of British banks signal trustworthiness, expensive media signals the same for brands. 

Conclusion

So there we have it. In the era of efficiency mass media is criticised for being woefully wasteful. It is derided as not being targeted, not attracting attention and not being cost effective. But these arguments fall for three fundamental flaws. 

Broadcast communications cannot target specific segments. But they can imprint brands on culture and imbue them with self-expressive benefits. Mass media cannot command the most attention. But it can bypass an audiences’ cognitive defences and lodge a brand in the audience’s long-term memory. Traditional channels cannot compete when it comes to cost. But they can use expensive media to signal the strength, security and stability of the brands that advertise on them.

What’s more, the theories of cultural imprinting, subconscious seduction and costly signalling are not mutually exclusive. A single piece of communication can benefit from two, or even three, of them simultaneously. A single ad can imprint a brand on culture and it can imprint a brand on an audience’s subconscious. It can help a consumer signal their self-image and it can help a brand signal it’s strength.

There is space in our communications plans for channels which provide broad reach brand building and there is space for narrowly targeted sales activation. There is room for those that exploit both passive and active attention. There is a place for the expensive yet effective and a place for the inexpensive yet efficient. These should be complementary, not competing, platforms. One approach does not have to win at the expense of the other. We can, as marketers, celebrate and capitalise on the relative benefits of both.

So let’s stop criticising broadcast advertising for being inefficient. Let’s stop worrying about it being wasteful. Over a century of research suggests the exact opposite. The very things that make mass media less efficient are also the very things that make them more effective.

Or as Tim Ambler famously put it:

“The waste in advertising is the part that works.”

Notes

• As I write this, I’m very aware that the vast majority of my sources are white males. I believe this is a reflection of a bias that has existed within advertising research over the last century, and not within my selection of the sources. However, having said that, I’m always open to being proven wrong. If I have missed any major contributors from the fields I have covered, please don’t hesitate to share them with me. You can email by clicking the envelope in the title bar.

• This article won the vote for Post of the Month for September 2021 on Only Dead Fish. Thank you Neil.

• This article was featured in a Farnam Street newsletter in October 2021. Thank you Shane.

• I discussed this article on an episode of the Call To Action podcast. Thank you Giles.

• A 1500 word summary of this article was published on WARC. Thank you Lena.