Understand the changes in advertising and marketing over the past century in one article!

On the day JWT was merged with digital marketing company Wunderman, advertising leaders mourned collectively on social media, singing a dirge for the death of an era.

JWT was once the symbol of 4A and a beacon for countless advertisers. The tower collapsed, but the fate had been foretold. Al Ries, co-author of Positioning, was the first to predict the "death of advertising."

In 2002, he wrote in his new book, Public Relations First, Advertising Second: "Successful brands are built by public relations rather than advertising. Brands are first deeply rooted in people's hearts through public relations, and then defended by advertising."

Previously, century-old advertising companies were being acquired by international advertising groups around the world, and public relations was the favorite darling of capital at the time. After 2002, taking mainland China as an example, advertising groups not only grabbed land in the public relations media field, but international public relations companies also entered the mainland one after another to grab the market.

The public relations industry has entered a glorious 20 years, but the scientific system and artistic ideas of advertising and marketing that have evolved over a century seem to have come to an abrupt halt. At least in China, the distinctive personality and culture of advertising companies are becoming increasingly homogenized, the methodology of marketing companies seems to have lost its vitality, and outdated theories are being put in new bottles or repeated.

In 2009, in the book "Obvious: Ending the Chaos in Marketing", Trout also discovered the truth that the marketing world was falling apart and the theories were in chaos. He blamed: "Advertisers are only looking for creativity, not the truth of marketing. Marketers are suffering from big business hubris and are unable to extricate themselves from the complexity of the scheme."

In January 2011, the American magazine Fast Company published a feature article titled "The Murdered Madison Avenue", predicting that advertising was dead. In 2018, before the JWT flag collapsed, Young & Rubicam merged with the digital marketing company VML. As for the future, advertisers already had the answer in their hearts.

JWT seemed to be a victim of the profit-oriented nature of international advertising groups, and the Internet and digital technology became the last straw that broke the camel's back for the century-old company. It is even more difficult for an elephant to turn around, but we can still go back to the beginning - to seek answers in that prosperous era of a hundred schools of thought. It's time to do a comprehensive review of the "concept".

1. Marketing: The marketing mix is ​​developing towards 4Ps

In 1953, after Harvard University professor Neil Borden proposed the concept of marketing mix and its 12 influencing factors, marketers realized for the first time that market demand was affected by "marketing variables" or "marketing elements."

After entering the 1960s, the US market shifted from a seller's market to a buyer's market. Under the broad marketing concept of combination marketing, some marketing masters with different talents and skills have led the industry into different branches with their theoretical innovations.

Horizontally, based on the goal of increasing product market share, combination marketing theory starts with the 4Ps combination and expands along the development path of "product strategy". Vertically, with the introduction of positioning theory, marketers began to pay attention to "consumer mind" for the first time, from service to loyalty, getting closer and closer to consumers.

1. 4Ps theory, based on the horizontal derivation of products

Professor Richard Klein first summarized the 12 elements of the "marketing mix" into product, pricing, channel, and promotion . In 1960, McCarthy summarized it into the famous 4Ps and added the strategy factor, collectively known as the 4Ps combination.

The marketing mix has moved from the academic field to commercial application, and 4Ps is the beginning. Philip Kotler popularized the 4Ps combination in his best-selling book, further establishing the theory's position in the marketing field. At the same time, following the development of the times, Kotler horizontally supplemented and expanded the 4Ps theory.

In 1986, three years after the milestone concept of "global marketing" was proposed, Philip Kotler proposed the concept of "big marketing" based on the globalized environment of American trade and to supplement the marketing factors that affect market share. He also improved the 4Ps combination, that is, on the basis of the original 4P combination, he added two Ps: "political power" and "public relations". The 4Ps then developed into 6Ps.

In the same year, Kotler further developed 6ps into 10ps. He called the existing 6Ps the tactical marketing mix, and the newly proposed 4Ps: exploration, segmentation, priority, and positioning the strategic marketing 4Ps, forming a relatively complete 10Ps marketing mix theory.

The concept of 10Ps combines the positioning theory of the 1970s with the market segmentation concept proposed by American marketer Wendell Smith in the mid-1950s, with the aim of finding new market growth in the local market. The 6Ps combination is mainly used in specific markets that practice trade protectionism and is based on international market development.

In general, the 4Ps combination system and its derivatives are product-centric and aim to increase market share.

2. Positioning, in-depth development with consumers at the center

In the 1970s, Al Ries and Jack Trout proposed the positioning theory. Similar to the meaning of "global marketing", positioning theory expands the vision and pattern, allowing marketing scientists to shift their focus from "the product itself" to consumer services and consumer psychology.

At that time, intensified competition in the US market led to product supply shortage, forcing consumers to choose among homogeneous products. Therefore, the core of positioning theory is not to do marketing around the product, but to first find the differentiation of the product and then position it in the minds of potential customers. It is a "consumer-centric" marketing approach.

In the following 20 years, with positioning as the symbol, the application scope of combination marketing has been further strengthened, from user service relationship to user loyalty.

In 1981, Booms and Bittner believed that if companies focused their marketing strategies on sales and advertising, they would inevitably neglect consumer services and the establishment of long-term relationships. They then suggested adding three "service Ps" to the traditional 4Ps of marketing theory, namely: people, process, and tangible display, which is the 7Ps marketing model.

The 7Ps model inspires marketers to explore marketing services. In 1994, Harvard University professors Richard and Seth studied the relationship between a company's market share and profits and found that customer satisfaction and loyalty were the main factors that truly determined profits. They then proposed the 3R+4PS combination, where the 3Rs are customer retention, related sales, and customer recommendation indicators.

As a result, the quality of market share, marked by customer loyalty, replaced the size of market share and became the company's primary goal. The concept of "service marketing" was born and widely spread in business practice.

2. The era of creative revolution in advertising

Unlike the marketing industry, advertising was more inclined towards "salesmanship" in its early stages of development.

There is little information available on the methodologies used by century-old companies such as JWT and Young & Rubicam in the early 20th century. What we can probably understand is that they were the first to introduce a strategy department and advertising effectiveness testing, which led to the advertising industry being clearly divided into the soft-selling faction (emotional atmosphere faction) and the hard-selling faction (cause investigation faction).

The former advocates that advertising should be based on the satisfaction obtained by consumers, while the latter advocates that advertising must provide a practical reason for sales. Whether it is rational or emotional marketing, advertising is either science or art. The characteristic of advertising at this stage is that it is salesperson-centered, and the role of advertising is to serve the salesperson.

It was not until the 1950s, when Rosser Reeves, chairman of Bates Advertising, proposed the USP theory, that the misplaced role playing in advertising began to change. The USP theory holds that there must be a unique selling proposition in a product. This proposition is a unique and powerful benefit promise, and advertising begins to truly serve the product.

After entering the 1960s, when marketers were thinking about how to sell excess products to consumers, a group of advertisers took advantage of the popularity of popular culture and spiritual culture, and the advertising industry entered a period of unprecedented prosperity. The advertising goal at this stage is still to sell products, but the advertising creativity has been maximized.

1. The three advertising leaders set off a creative revolution

The 1960s was also known as the "Era of Creative Revolution", which was divided into three creative schools represented by the three flagships of advertising. Leo Burnett is a representative of the Chicago School. He believes that "the product is the hero" and that advertising should tap into the "innate drama" of the product.

The iconic case is an advertisement about "meat". In this advertisement, Leo Burnett did not mention the selling point of the product, but instead explored the appetite behind the color of the meat and the sizzling sound of frying meat, and the "interest point" in the USP theory was derived.

Leo Burnett

David Ogilvy is a representative of the advertising science school. He proposed the BI (Brand Image) theory. He advocated "establishing a clear and definite brand personality" to shape a good "brand image." As product functional benefits become smaller and smaller, Ogilvy's image theory holds that consumers value the sum of substantial and psychological benefits when making purchases, all of which are included in the image of the brand.

William Bernbach, one of the founders of DDB, represents the artistic school of advertising and emphasizes the emotional impact of consumers on advertising. The ROI theory, which best represents Bernbach's ideas, points out that a good advertisement should have three basic qualities: relevance, originality, and shock. From the perspective of later generations, many well-known advertising cases at that time can actually be summarized under "brand image", such as the advertisement shot by Leo Burnett for Marlboro.

Therefore, some scholars also call this period the era of "brand image". In the 1980s, the American Grey Advertising Company proposed the famous new concept of "brand personality", which has had a wide influence to this day. The USP theory initially emphasized that advertising should highlight the selling points of products, and after the 1990s it was also extended to a brand creative value proposition. At this point, branding has become the hottest topic in advertising theory.

2. Advertising creativity measurement enters a new stage

In 1898, Elmo Lewis first proposed the "AIDA" marketing theory, which means attracting attention, generating interest, cultivating desire, forming memory, and promoting action. Strong introduced it into the evaluation of advertising effectiveness, and it became the first advertising measurement model. Later, some scholars added M (memory) or S (post-purchase satisfaction) factors to the model, and AIDA became AIDMA or AIDAS.

This path is consistent with the direction of change of the 4Ps theory, and is a horizontal and complementary development. With the measurement theory, advertising effectiveness research also had a development outline and entered a stage of comprehensive development after the 1960s. In 1961, American advertising expert R.H. Colley launched the DAGMAR model and 6M method.

Coley believes that the process of advertising's impact on consumers goes through four stages: awareness, understanding, conviction, and action . The measurement of advertising effectiveness must be carried out step by step from the six goals of product, market, motivation, message, media, and measurement. There are basic principles and methods for measuring advertising effectiveness.

In the same year, Robert J. Levitz and Gary A. Steiner proposed the L&S model, which consists of three parts: cognitive response, emotional response and intentional response. This theory believes that measuring advertising effectiveness by communication effect is the basis, and establishes a hierarchical model of advertising communication effects.

The Dagmar model focuses on the psychological state of consumers at different stages, but it cannot accurately measure the effectiveness of a single advertisement. However, each stage of the L&S model can be measured, and the advertising dissemination process can be better evaluated.

Theoretical research in the academic field has guided the commercial development of advertising measurement. After 1968, Hakuhodo, Dentsu, Mannensha and others set up advertising effectiveness evaluation laboratories. Hakuhodo has HAAP, Dentsu has CSP, and Leo Burnett has CAPP model measurement. Except that CAPP adds brand and post-purchase satisfaction factors, these models are similar.

Taking the CSP model as an example, after Dentsu publishes an article, it will first calculate the advertising effect based on the media reach, average number of reach times, and total media reach, and then deduce the relevant advertising data. Finally, DAGMAR is used to calculate consumer psychological changes and action effects.

Except for media reach, which has data indicators, each stage is measured manually, which is a huge workload. From the 1970s to the 1980s, with the development of the computer industry, advertising companies began systematic research on advertising effectiveness.

From the beginning, the factors used to judge advertising effectiveness mainly focused on reading rate, viewing rate, etc., but later it evolved into a comprehensive assessment of the entire instantaneous and long-term effects of the advertising sales effect, with more emphasis on long-term brand effects or consumer attitudes.

3. Different paths to the same destination in the era of great integration

In fact, before the 1960s, the main body of both marketing and advertising services was "product". If there is a surplus of products, we can increase product services and enhance added value.

After the 1960s, when products and services gradually lost their differentiation, manufacturers began to give their products personality and spirit in order to gain consumer recognition, all for the purpose of product sales.

This situation is changed by a completely new variable, which exists neither in the service nor in the user's mind. It cannot be touched or seen, but it subtly influences consumers' shopping decisions - a brand is born, although it still has no clear definition.

In the early 1990s, David Aaker first recognized the value of brands in his book Managing Brand Equity. Just like when humans first became aware of gravity, a brand is no longer an image or personality that increases product value, but a tangible asset and intangible product. The era of great integration has arrived!

1. “Integration of Brand and Effect” in Integrated Marketing

In 1990, Robert Lauterborn challenged the 4P theory and proposed the 4C theory. He believes that marketing should be customer-centric, focus on and meet customers' needs in terms of cost and convenience and strengthen communication with customers. It should not be "Consumers please pay attention" but "Please pay attention consumers".

There is no doubt that the 4C theory inspired Professor Don Schultz who teaches at Northwestern University in the United States. At the end of the 20th century, it proposed the concept of integrated marketing communications (IMC), believing that 4C and 5R should replace 4P. Similar to the 4C theory, the 5R theory is also customer-centric, proposing to establish long-term interactive relationships with customers in terms of connection, feeling, reaction, and return .

Professor Don Schultz

Regarding the difference between clients and consumers, we can understand it as follows: consumers are the end users and beneficiaries of a company's products and services, while customers refer to people or groups who have direct business dealings with the company. To use the popular term today, it means all individuals who are empowered.

At that time, there were many discussions about IMC, with many different viewpoints on marketing model and strategic model. But Schultz believes that IMC should represent a broader concept, that is, to use all the information that companies and brands can reach to attract consumers. Therefore, the initial promise of IMC is actually to establish a unified corporate image by building a comprehensive structure.

The image Schultz mentioned is the brand. The so-called unification refers to the effective unification of the brand image, that is, "brand and effect integration". This concept is very different from what we now call "brand promotion and effect conversion".

Schultz further added that IMC is a system driven by customer information, an understanding of customer perception and connection to the brand, and most importantly, it provides a fundamental method through which all communication investment strategies can be evaluated because its end point is to estimate the realized and potential value of customers and consumers.

In short, the current mainstream view is that the main problems that IMC integrated marketing solves are, first, to assist in brand building, and second, to solve the problem of return on investment, or ROI.

One more thing to mention is that for a long time after the introduction of integrated marketing, we forgot the word ROI. It was mentioned again in the past few years, and 2019 was even called the first year of brand and effect integration, which actually proves in disguise that the effect of integrated marketing is not as good as before.

2. Brand integration in the advertising industry

In the 1990s, academic research on brands reached its peak, with new concepts such as “brand iceberg”, “brand cluster” and “brand ecological environment” emerging one after another. Foreign advertising groups also started to embrace the "brand trend" in the 1990s and replanned their operating concepts and procedures.

Ogilvy proposed the concept of "brand steward" and further proposed the "360 brand" theoretical model in the late 1990s; Saatchi proposed the "global brand strategy"; Dentsu proposed the "brand communication"; Bates re-planned USP advertising based on the "brand essence" and proposed the "brand wheel"; JWT changed from the previous "Thompson method" to "full brand communication", and so on.

In addition to management models, advertising companies have also carried out quite in-depth practices in the field of advertising measurement. For example, Leo Burnett has specially established the "Leo Burnett Consumer Interview Group" across China's six major first-tier cities to conduct continuous research to deeply reveal human insights.

Hakuhodo has the famous "Life Research Institute" whose main mission is to observe consumers across Japan and help gain insight into needs and desires; Jan Rubicam has developed a brand asset evaluation tool; and Grey has developed SPARC, a tool for monitoring TV advertising to find the best media planning solutions.

Around 2002, after a wave of acquisitions and mergers by international advertising groups, these advertising groups placed greater emphasis on using technology to build their core capabilities, and increasingly attached importance to the deployment of R&D capabilities and the development of proprietary tools as the company's intangible assets. Therefore, we are left with the illusion that we lack theory and methodology.

After the 1990s, the marketing and advertising industries all took the same path towards branding, and as a new species, brands flourished under the strategy of integrated marketing. Therefore, it is not an exaggeration to call the period after 1990s the era of “integrated marketing”.

3. What went wrong after 2000?

After entering 2000, with the increasing popularity of integrated marketing concepts and under the influence of new Internet technologies, capital globalization and other factors, the theoretical environment of advertising marketing has become increasingly complex and increasingly difficult to summarize.

For example, in integrated marketing, some people combined brand concepts to summarize a set of BIMC theory (Brand Integrated Marketing), and some people added the concept of network marketing to develop E-IMC (Network Integrated Marketing)...

Philip Kotler proposed a new model of value marketing, CCDVTP. Schultz believed that the traditional 4P marketing theory should be replaced by the new SIVA concept. Trout repositioned himself after the new positioning. Dentsu Group proposed the AISAS consumer behavior analysis model for the Internet era, which was later updated to SIPS. Some self-media have also proposed new thinking on link marketing based on the perspective of digital marketing...

The application of psychology in advertising is becoming more and more widespread. People will not only add the AIDA formula to PPT, but also mention the primacy effect, halo effect, social stereotypes, empathy effect, psychological set... Ogilvy initially emphasized big creativity and brand integration in "Ogilvy's Viewpoint", and then promoted digital marketing in "Ogilvy's Digital Marketing Viewpoint" in 2009. In the field of digital marketing and advertising, almost every platform has its own set of models.

There are many concepts and methodologies, but they do not seem to have changed the overall weak trend of the traditional advertising industry. What went wrong?

Author: Community Marketing Research Institute

Source: Community Marketing Research Institute