Does Marketing Pay Off? - James Altucher and Stephen J. Dubner. Question of the Day
The podcast for listeners who are short on time and long on curiosity. Hosted by James Altucher and Stephen J. Dubner of Freakonomics
A quick resume of episode #36 from the blue-eyed barbarian.
The was a great story: a bunch of scientists did a study, where they put up a bunch of products on Ebay, and sold them. Ebay has an auction system, when the auction determines the price. And then they put up the same products, but the put up a story. Like: "this knife was used by my grandfather in China, and survived all these wars". Just the story itself did triple the price.
Marketing is storytelling.
So the song "I'd like to buy a world a coke" not only was just a powerful commercial for Coke in the 70s, but it even closed a TV show Mad Men, which was a hard show to end. That's clearly a marketing success story.
But those tipes of success stories are ending because just having a flashy ad is not where people are consuming their content. They are consuming their content on the internet, where storytelling becomes even increasingly more important.
So successful stories now is almost a lack of marketing.
For instance, the best way to market a book right now is to write another book. And to have a social proof. And to have other people to say your book is great. My guess is books with more reviews on Amazon tend to sell better. Just because there's a lot of social proof. Books that have scientific facts backing them tend to sell better because there's scientific proof. And this is what happenes in direct responce marketing, where you are not alowed to do a commercial, you have to immediately say - "this is the greatest thing I've ever used", or "4 our of 5 dentists say this works". So, social proof, scientific proof, and finally doing it again. So the best romance authors don't just put out one romance book, they put out ten romance books. The best youtube video stars, the ones who make millions of dollars a year in Youtube, didn't just put one video, they'd out a lot.
Michelle Phan is a great example. She does make-up videos. She put up 54 videos that had no views, and then the 54th video was her doing makeup how Lady Gaga does makeup, which became a huge video. Now Michelle Phan's business is worth like a 100 million dollars.
There are two good books your can read on this kind of topic. First is Robert Chialdini's "Influence", another is Michael Masterson's "Power & Persuasion" and he writes about copywriting - so how can you write to make your content be more direct responce oriented.
Also study Kevin Harrington's infomercials because infomercials are about you right then, picking up the phone and calling. He knows what exactly what takes people to pick up the phone and make a buy.
And then finally, the best marketing is good content. If you write the next book, and the next book, and the next book, eventually people are going to hear about you, and that's the best you can do. People always ask me how to I market my novel - writing another novel.
A report of the institute of practitioners of advertising. You might make some interesting conclusions from it:
"The way is which long-term effects are generated is fundamentally different from how short-term effects are produced. Although long-term effects always produce some short-term effects the reverce is not true. And long-term effects are not simply an accumulation of short-term effects."
Let's explain that a little further. An advertisement like the Coke commercial in the 70s produced this long-term effect that Coke instills itself in our cultural imagination, but might not be able to measure the short-term effects. Whereas if I were to write an article about Coke saying it cures these 5 diseases, that might have a short-term effect and that week somebody might buy it, but then eventually that short-term effect wears off and doesn't create itself in our cultural consoisness the way the Coke commercial did, the Mac 1984 commercial did and so on.
"A succession of short-term responce focused campaings, including promotional driven ones (like a coupon or special offers) will not succeed as strongly over the longer term, as the single brand-building campaign, designed to achieved year-on-year improvement and business success."
But direct responce marketing always drive amazing results if its is written by professional who've read the book we previously said. But that effectiveness does not mean that for the firm or for the product that's the right move for the long-term.
"Emotional campaigns, in a particular those, that are highly creative and generate powerful fame/buzz effects, produce considerably more powerfull long term business effects, than rational persuation campaigns."
The profit and a market share are basically to different aims.
"Strategies that maximise short-term volume growth are different from those that minimise price elasticity over the longer term."
If I try to manipulate or increase demand by lowering myprice, that will work for me in a likelyhood, because people will respond to price. But in terms of creating our brand larger and longer it can work against that goal.