Claude Hopkins Would Have Loved Bittorrent

There are many second-best books about advertising. Ogilvy on Advertising will tell you all about how Ogilvy would have sold it; The Book of Gossage can tell you how Gossage would have scolded you for selling too hard; but only Scientific Advertising tells you how to think about advertising.

Even if you don’t sell things for a living, being a good judge of advertising is a pretty useful talent. With that in mind, I’ve reread Hopkins’ book every year or two, just to stay sharp. And this year, I noticed something startling: Hopkins, writing in 1923, would have loved software piracy.

Hopkins was the ultimate numbers guy. If he would have loved Bittorrent, he would have had a pretty dangerous fetish for Google Analytics.

His technique was something like this: when he created an ad, he’d throw in some coupons. The coupons would have a code. When a coupon was used, the retailer who got the coupon would send it to Hopkins, and he’d use the codes to keep track of which ads sold. Do that enough times with enough products, and you know everything there is to know about what sells and what doesn’t. Which is probably why his salary was $4.3 million in today’s dollars.

At one point in his book—which, again, you should read, unless you never plan on selling anything or being sold to—Hopkins discusses free samples. He loves them. They establish a relationship, they make your potential customer feel like he owes you a favor, and if your product is good enough, they do your selling for you.

He even advocates offering coupons that can be immediately redeemed for a sample product. His clients naturally worried that if, for example, it costs a nickel to buy a newspaper, and the newspaper has a coupon that saves someone a dollar, people will prefer to spend their nickels and not their dollars, leaving the client a customer short and a dollar poorer. But Hopkins explains:

“Say to the woman, “Only one sample to a home,” and few women will try to get more of them. And the few who cheat you are not generally the people who would buy. So you are not losing purchasers, but the samples only.”

Keep in mind that he’s referring to products that have to be built, shipped, stocked, and distributed. And he’s saying it’s better to manufacture it, move it, warehouse it, and give it away—for absolutely no money—than to spend any time converting a mooch into a customer. Samples create so many customers that it’s not worth trying to stop people who game the system.

When it comes to music, movies, and software, the marginal cost is zero. And yet these companies go after free-sample users far more vigorously than Hopkins’ clients did.

Perhaps the low cost of exploiting free downloads changes the equation. Perhaps free samples have lost their psychological impact. Or perhaps the greatest advertiser of all time had a point.

(You can download a pdf of Scientific Advertising, which, ironically, has some fairly trivial anti-piracy measures in place, which will make it inconvenient to copy/paste, among other things.)

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| September 6th, 2009 | Posted in Advertising |