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February 05, 2007

A Direct Response Radio Advertising Perspective on Super Bowl Commercials

Okay, I admit it's a bit of a jump on the bandwagon move to comment on super bowl commercials. But once in a while we're likely to do such a thing on this blog. Particularly when it addresses the question of "what works in radio advertising", which is a question Jeff and I hear very frequently.

First an observation: Very few of the ads that aired during the Super Bowl were effective in a loud sports bar. You simply couldn't hear the dialogue well. I don't have figures on what percentage of people watch the Big game from such an environment, but I still have to wonder whether it's not a significant portion of the audience.

Most often we're taken aback at the consistency of the wasteful advertising that airs during the Super Bowl. Few direct response advertisers place their money on the Super Bowl consistently. Godaddy.com is the one that that comes to mind from this year's super bowl. Do they thrive because of their Super Bowl advertising or survive in spite of it? The right question to ask is: Could that money be spent more effectively elsewhere? But that's another blog post.

There was, however, one commercial that provides particular insight and relevance to a point we've made many times about what works in direct response radio advertising. Believe it or not, that's the Pizza Hut ad. What? An ad for pizza? Relevant to direct response radio? Let me explain.

Consider the pizza business for a moment. Pizza is a ubiquitous product. It has been around forever, and it's so simple that nearly anyone can make it. In business-speak, "there are low barriers to entry" into the business of selling pizza. Of course, in reality it's much more difficult and complicated than that, but you often don't find that out until you're already in the business.

In considering the economics of such a category, there would be many entrants all competing for finite number of dollars. Many would fail. Some would survive - on the basis of some combination of competitive advantages derived from differentiation - to win the grand prize of... fighting the scrappier new entrants of the future. The economics seem unattractive in this light, but in reality this is not a lot different than most business categories. It is nearly impossible to establish one advantage that sustains for eternity. Continuous innovation (change) is required.

Pizza Hut is clearly one of the survivors. They've innovated in numerous ways over time to differentiate their product, and as a result they've been profitable. Their Super Bowl commercial shows their latest twist on their track record of innovating with the pizza crust, which is ... Cheesy Buns! Yes, Pizza Hut has gone and made the pizza crust into something that looks like pieces of cheese-stuffed bread bites. Now you get pizza, plus cheese-stuffed bread pieces, all in one! They've made the most boring part of the pizza exciting and valuable to customers in a new way. Again. A true and clear point of difference that was well-communicated in their ad (it looked delicious).

Many business categories that leverage direct response advertising are similar to the Pizza Hut business. Fitness products, nutritional supplements, health and beauty, insurance... you get the idea. These are business categories that have been around for a long time. They are all in danger of using the same marketing messages to attract customers. And they can all learn a lot from Pizza Hut. As Jeff and I have said many times, one of the keys to success in direct response radio advertising is differentiation of your offering. For very fundamental, structural reasons, me-too offerings don't "work".

Back when I was in business school, I read an article called "How to Brand Sand". It was about....branding sand. That is to say the process of building/creating a brand for something so commoditized, so standard and non-differentiated, as sand. Imagine if you were the Brand Manager on the Sand product line. How do you grow sales quarter after quarter, year after year? How do you build an enduring Brand? How do you compete against other "sand"? Though the article get's theoretical and business-speak-y at times, it is nonetheless valuable for the thought processes it highlights. I found it on the internet here if you're interested in reading it.

What works in direct response radio advertising? That's a long answer.

What doesn't work in direct response radio advertising? That's a much shorter list, and at the top is any product or service that takes an undifferentiated, "me-too" approach. I'm quite confident that Pizza Hut would do very well with direct response radio advertising.

Posted by Brett Astor at 09:39 AM | Permalink