The psychology of advertising
I was recently at Sky City in Auckland. After dinner, a quest for ice cream saw my friends and me taking a shortcut through the casino.
As we walked past the slot machines, I recalled something I had read in one of my favourite books, American Gods, written by Neil Gaiman:
“Entering the casino one is beset at every side by invitation – invitations such that it would take a man of stone, heartless, mindless, and curiously devoid of avarice, to decline them.
Listen: a machine gun rattle of silver coins as they tumble and spurt down into a slot machine tray and overflow onto monogrammed carpets is replaced by the siren clangour of the slots, the jangling, bippeting chorus swallowed by the huge room, muted to a comforting background chatter by the time one reaches the card tables, the distant sounds only loud enough to keep the adrenaline flowing through the gamblers’ veins.
There is a secret that the casinos possess, a secret they hold and guard and prize, the holiest of their mysteries. For most people do not gamble to win money, after all, although that is what is advertised, sold, claimed and dreamed. But that is merely the easy lie that allows the gamblers to lie to themselves, the big lie that gets them through the enormous, ever-open, welcoming doors.
The secret is this: people gamble to lose money. They come to casinos for the moment in which they feel alive, to ride the spinning wheel and turn with the cards and lose themselves, with the coins, in the slots. They want to know they matter. They brag about the nights they won, the money they took from the casino, but they treasure, secretly treasure, the times they lost. It’s a sacrifice, of sorts.”
The truth is that advertising is, and always has been, a gamble. I’m sure you’ve heard this one before: “Half of my advertising budget is wasted, I just don’t know which half”. This, the most famous, and possibly the oldest, of all advertising quotes, is nothing but a symbol of how terribly hopeless the world of advertising is. But I guess in terms of gambling, a fifty-fifty chance of succeeding is better than most odds in any casino. The way the casinos beguile their victims with colour, noise, and scent, is exactly the same approach that advertising agencies take to sell their counterfeit dreams. “Spend more! Spend more!” they cry. “If you stop spending, everyone else who is will pull ahead. Do you really want to lose ground?”
Advertising is a sacrifice of sorts and it demands that blood be spilt on its altar. Advertisers sacrifice vast amounts of money every day to a vast number of media environments. Just 20 years ago, there were less than a dozen to choose from. With such a mammoth growth in possibilities over such a small time frame, who knows what the heck they’re doing? Since there are thousands and thousands of advertising messages getting nailed into our heads every day, someone must be winning. But it’s not who you think.
Consider these two mammoth advertisers: Harvey Norman and JB Hi-Fi. Together they spend over $100 million every year on advertising. Will this huge advertising spend save them when Amazon enters the Australian market in 2018? No. Harvey Norman and JB Hi-Fi offer nothing of real value to consumers. Price has no value, and since they sell the same products, offer similar retail experiences, and their advertising even screams to consumers in the same way, they’re doomed. Amazon is going to destroy them and they’ll do it without advertising. Seems presumptuous but Amazon’s marketing is built into the brand and it will alter the competitive environment for electronics retailers forever. Amazon can afford the low mark-ups; they don’t have to pay the same amount on wages, leases and marketing. All the other two can do is drop prices and lower marketing costs. And that won’t help; it’s contrary to everything they’ve ever done before.
So, will their heritage of gambling with advertising pay off for Harvey Norman and JB Hi-Fi? As I said before, there’s maybe a fifty-fifty chance their advertising will save them, but if I were a gambling man, I’d bet everything I possibly could on Amazon to win.