There is only one interesting way to make money, in any field: develop and exploit a durable competitive advantage.1 Berkshire Hathaway wins because they are the buyer of first resort for good businesses that want to sell, and they can get cheap capital through superior underwriting; Facebook wins because to achieve parity with them, you have to recreate a 500 million-node social graph; the corner bodega turns a profit because that particular corner has a bodega and a half’s worth of foot traffic. In every one of these cases, it’s theoretically possible to compete with the incumbent, but there’s a better ROI in just letting them dominate the industry.
One thing these companies have in common is that their competitive advantage applies to the product or the process—either they can make the same thing for less money, or they can make something nobody else can make. What they don’t rely on is superior advertising. With good reason:
In the long term, the best advertising—the best creative, the best placement—will be sold to the high bidder. And the high bidder is whoever’s competitive advantage lets them earn more from a given customer. Read the rest of this entry »04.5.10
The Economics of Advertising: Why Advertising Agencies Used to Be the Best Business in the World (And Why They Never Will Be Again)
There’s only one notably successful business personality who made his money in the ad agency business. He’s an accountant, and that should tell you something. The ad business is simply not a great place for making money.10.2.09
I’m tired of people who pitch social media marketing as a way to make sales. Either they aren’t measuring the results they get for clients, or they don’t care. Every good case study is either about how someone used a famous friend’s endorsement to make new sales, or how they made a tiny number of low-profit transactions they probably would have made anyway.
I hate pitching social media marketing—but I still do it, because it does serve a purpose. But the most important part of the pitch is the warning: if you follow the convention wisdom, your social media presence is almost certainly costing you sales.09.22.09
It’s Not How Good You Are, Its How Good You Want to Be is another title that most people would naturally tune out (especially if they’d actually enjoy the book).
Arden’s book is short and tightly edited. The features big text, lots of whitespace, sudden pictures, emphatic headlines—it’s like a really, really good Tumblr.09.17.09
A week ago, I wrote an article about a fairly low-level SEO technique. As an experiment, I posted it to the SEO section of reddit.com. I was startled by what I learned. Even though I’ve been using reddit since a few months after it started, I didn’t realize until now why the site is like no other—how it encourages the best behavior from people who do their marketing through the site, and how it represents the real future of news.09.9.09
Amazon and Wikipedia own most of the world’s most valuable proper nouns. Try Googling any famous person, and you’ll get Wikipedia. Google any beloved book, and you’ll find Amazon—unless the book has been made into a movie, in which case you’ll end up with Amazon subsidiary IMDB. Read the rest of this entry »09.6.09
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. Read the rest of this entry »09.4.09
This is terribly offensive, unless you happen to think it’s true. If it is true, the only offensive bit is that anyone would think that Tsunami deaths are okay. The problem isn’t the content of the ad: the problem is who paid for it. Read the rest of this entry »09.2.09
Where the Suckers Moon is a story about trying to sell a decent product by turning it into a political movement. Or a hip trend. Or a trend-free anti-trend. Or beautifully-produced anti-art. It’s a story about finding roundabout ways not to get to the point.
In short, it’s a story about an award-winning ad agency that burned through millions of dollars trying to sell an attractively-priced, middle-of-the-road product as anything but that. If you’ve ever wanted to waste millions of dollars on someone’s flash of creative insight (or wished someone would waste millions on yours), you should read it. Read the rest of this entry »