Al Ries Bio/Archives
Al is a legendary marketing strategist and the bestselling author (or co-author) of
11 books on marketing including Positioning: The Battle for Your Mind, Marketing Warfare, Focus, The 22 Immutable Laws of Branding, The Fall of Advertising & the Rise of PR and his latest The Origin of Brands.
After graduating from DePauw University, Al worked in the advertising department of General Electric before founding his own advertising agency in New York City, Ries Cappiello Colwell. The agency later changed to a marketing strategy firm, Trout & Ries.
In 1994, Al started Ries & Ries with his daughter Laura. Al and Laura continue to work together consulting with Fortune 500 companies, writing books and giving seminars around the world.
PR VS. Advertising : 3 Facts of Life
An interview with Al Ries, Best-Selling Author of "The Fall of Advertising & The Rise of PR."
by Cincom's Expert Access Steve Kayser
Steve: In your book the Fall of Advertising & The Rise of PR you state that today's major brands are born with publicity - not advertising... Al Ries: Yes, all the recent brand successes have been PR successes, not advertising successes. Red Bull, Starbucks, Harry Potter, Linux, Palm, The Body Shop, JetBlue, and Google. Steve: Examples? Al: Starbucks spent less than $10 million in advertising its first 10 years. That's less than one million a year, a trivial amount for a national brand. Here's what Howard Schultz, CEO of Starbucks, has to say about advertising. "It is difficult to launch a product through consumer advertising because customers don't really pay attention as they did in the past. I look at the money spent on advertising and it surprises me that people still believe they are getting returns on their investments." Steve: But didn't some major dot.coms succeed with advertising? Al: What dot.coms are successful? Amazon, Ebay and other dot.coms that relied on PR to build their brands. Those that tried to do it with advertising were notable failures. Google is another dot.com brand that rode to the top primarily with PR. Fact of life number 1: Advertising Age recently ran a special issue on the best advertising campaigns of the 20th century. The number-one advertising campaign, as you might have guessed, was the Volkswagen campaign. The first advertisement in the campaign, "Think small," was run by Doyle Dane Bernbach in the year 1960. Almost everyone credits this campaign for building the Volkswagen brand. But in the year before the campaign was launched, Volkswagen was already the largest-selling imported car in the country with 19 percent of the imported car market. Volkswagen was already a successful brand due primarily to favorable publicity. Granted, the DDB campaign accelerated Volkswagen's sales, which is exactly what the best advertising should do. The best single advertisement of the 20th century, according to many commentators, was a Rolls-Royce ad. "At 60 miles per hour, the loudest noise in the new Rolls-Royce comes from the electric clock." David Ogilvy said: "The best headline I ever wrote contained 18 words: "At 60 miles per hour, the loudest noise in the new Rolls-Royce comes from the electric clock." Have you read the first paragraph of the ad? I'll read it for you. "At 60 miles per hour, the loudest noise comes from the electric clock," reports the Technical Editor of The Motor, the leading automotive publication in the United Kingdom. David Ogilvy took his headline directly from a road test in a motor magazine. Do I think any less of Ogilvy's genius? Of course not. That's what advertising ought to do. Pick up and reinforce ideas put into the mind by PR. Fact of life number 2: Recently, MasterCard's "Priceless" campaign has gotten a lot of publicity. Terrific, but Visa leads MasterCard by more than two to one. Steve: So when it comes down to bottom-line ROI? Fact of life number 3: Al: No-brainer. The largest advertised brand in America spent $780 million on advertising last year. Do you know the name of the largest advertised brand? It's not McDonald's, Budweiser or Coca-Cola. The largest advertised brand in America last year, would you believe, was Chevrolet. Now let me ask you a question, what's a Chevrolet? If I told you I would meet you out front in my Chevrolet, would you be able to recognize my car? What's a Chevrolet? A large, small, cheap, expensive car … or truck. But you already knew that. $780 million and there probably isn't one thing stuck in your mind that you can connect with Chevrolet. What a waste. The largest corporate advertiser in America last year was Chevrolet's parent, General Motors. As a matter of fact, the company has been the largest corporation advertiser for five of the last eight years. In eight years, General Motors spent $23 billion on advertising. What did they get for their money? They lost six percent of market share, that's what they got - from 34 percent in 1995 to 28 percent in 2001. Big advertisers often are companies with big problems. Advertising can often accelerate success, but it usually does nothing to forestall failure. When US Airways went bankrupt, for example, what was the first thing they did? They ran full-page advertisements signed by the chief executive in The Wall Street Journal, The New York Times and USA Today. "Foundation for the future." When United Airlines went bankrupt, what did they do? They ran full-page advertisements in The Wall Street Journal, The New York Times and USA Today. It's not really Chapter 11, it's Chapter 1. When Firestone got in trouble, it ran full-page advertisements signed by the chief executive in The Wall Street Journal, The New York Times and USA Today. "Making it right." Translation: We have been making our tires wrong for 50 years, now we are going to start making our tires right. When Arthur Andersen got in trouble, it ran full-page advertisements signed by the managing partner, the ex-managing partner, in The Wall Street Journal, The New York Times and USA Today. When Merrill Lynch got in trouble, big trouble, it didn't run full-page advertisements in The Wall Street Journal, The New York Times and USA Today. It ran two-page spreads in those publications signed by both the CEO and the president. "Lately you've been hearing a lot about Merrill Lynch." Now we are going to set you straight. And what two guys in two thousand dollar suits tell you, you know you can believe. Steve: PR vs. Advertising … biggest takeaway? Al: Advertising's Achilles' heel is not a heel at all. It's the mind of the prospect. Advertising has little credibility in the mind. Enamelon, a toothpaste that adds enamel to your teeth, spent $25 million dollars launching the brand and received $10 million in sales. Adds enamel to your teeth? A product like this needs to start with a PR program in publications like The Journal of the American Dental Association. Advertising is self-serving. What you say about yourself has little or no credibility in the mind. "I did not have sexual relations with that woman, Miss Lewinsky," said Bill Clinton. Did you believe that? Did Hillary believe that? "I will not resign," said Richard Nixon and then promptly resigned. PR has credibility in the mind. It's the third-party effect. It was PR that built the safety position for Volvo. And advertising reinforced it. It's what we call PR-oriented advertising. PR first to establish the credibility of the brand, advertising second to reaffirm and reinforce the brand's credibility. This ad works because "safety and Volvo" are synonymous in the mind. "We design every Volvo to look like this." But this ad doesn't work. "We design every Dodge to look like this?" The steering of a Dodge must be defective because look at all the accidents they have been having. Advertising agencies, as you know, generally ignore the credibility issue and focus on creativity. Take the sock puppet owned by Pets.com. The sock puppet received $60 million in advertising yet delivered only $22 million in sales. As it happens so often in advertising, creativity dies again. As strange as it might seem, the ad agency disagrees. Here is what the world's most famous creative director said about the Pets.com campaign. "Business models, market conditions, the Nasdaq, VCs - they're not in my control. This has nothing to do with the success of the advertising. Ad agencies are hired to create brands, and we did that in spades." It's the classic advertising error. The ad agency apparently thinks the brand is the sock puppet. But consumers don't buy sock puppets. Consumers buy pet supplies. And few did because the advertising didn't build the Pets.com brand. About Ries & Ries
It was publicity in The Wall Street Journal and other management publications that built brands like Cisco, Dell, Oracle, Microsoft, Palm, SAP, Sun Microsystems and Yahoo.
Advertising often gets the credit for PR successes.
Advertising often gets the credit for campaigns that don't deserve it. Take the Energizer Bunny, one of the most admired advertising campaigns of all time. Is Energizer the leading appliance battery brand? Of course not. The leading appliance battery brand is Duracell, by a big margin.
Advertising dollars cannot compensate for the lack of favorable PR.
Al Ries is one of the world's best-known marketing strategists. He is also the coauthor of the best-selling Positioning. Along with his partner and daughter, Laura Ries of The 22 Immutable Laws of Branding, their Atlanta consulting firm, Ries & Ries, works with many Fortune 500 companies. For more information, visit www.ries.com.
Posted by AlRies on November 3, 2005 at 04:57 AM in Business Growth | Permalink | Comments (0) | TrackBack
The Fundamental Law of Marketing
The Fundamental Law of Marketing
By Al Ries, Chairman,
Ries & Ries, Atlanta, Georgia, USA
What’s the fundamental law of warfare? It was Civil War General Nathan Bedford Forrest who expressed it the best: “Get there firstest with the mostest.”
Marketing is warfare conducted with communications rather than guns and bullets. But the same fundamental principle applies get there firstest.
In our books and articles, we call this principle “the law of leadership.” There are enormous consequences of leadership, and they are all favorable.
Your leadership position attracts the best people, the best distribution, and the best news coverage. (When a media outlet is doing a story about the fast-food business, who do you suppose is the first company they call? McDonald’s, of course.)
Competitors that enter the market later are forced to cut their prices, which makes it difficult for a me-too brand to make much money.
Take Red Bull, the first energy drink. Here in the U.S., Coca-Cola countered with its own energy drink, a product called KMX. In spite of the fact that Coca-Cola is the world’s largest soft drink company, the marketing victory went to Red Bull, a product that outsells KMX in the U.S. market 20 to 1.
KMX didn’t work, so Coca-Cola recently came back with Full Throttle, an energy drink that is unlikely to do much better than KMX.
Take Gatorade, the first sports drink. Coca-Cola countered with its own sports drink, a product called PowerAde. In spite of the fact that Coca-Cola is the world’s largest soft drink company, the marketing victory went to Gatorade, a product that outsells PowerAde in the U.S. market 7 to 1.
Seven to one isn’t the whole story. In order to compete, a number-two brand usually sells for less, greatly reducing profit margins. PowerAde, for example, is currently sold at a local supermarket for 20 percent less than Gatorade.
The first carbonated citrus drink was Mountain Dew. Coca-Cola countered with its own carbonated citrus drink, a product called Mello Yello. In spite of the fact that Coca-Cola is the world’s largest soft drink company, the marketing victory went to Mountain Dew, a product that outsells Mello Yellow in the U.S. market 9 to 1.
Mello Yello wasn’t going anywhere, so Coca-Cola also tried Surge, which didn’t go anywhere either.
The first spicy cola drink was Dr Pepper. Coca-Cola countered with its own spicy cola drink, a product called Mr. Pibb. In spite of the fact that Coca-Cola is the world’s largest soft drink company, the marketing victory went to Dr Pepper, a product that outsells Mr. Pibb in the U.S. market 8 to 1.
And so it goes.
The first all-natural drink was Snapple. Coca-Cola countered with its own all-natural drink, a product called Fruitopia. In spite of the fact that Coca-Cola is the world’s largest soft drink company, the marketing victory went to Snapple, a product that greatly outsells Fruitopia.
Question: If the Coca-Cola Company, the world’s largest soft drink maker, can’t make a success of a me-too product, why should you expect your company to do so?
What are we saying? That the marketing function doesn’t matter? That the key to a company success is research and development? That all a company has to do to become successful is to be the first company to introduce a new category?
Not at all. The second most important law of marketing is the law of the mind.
“First in the market is nothing. First in the mind is everything.”
That’s why marketing is the key to success. It doesn’t matter which brand or which company is literally first. It only matters which brand or which company gets into the mind first.
The first beer on the U.S. market was Yuengling, but not in the mind. The first beer in the mind was Budweiser. As a matter of fact, Budweiser was the first national brand of beer.
The first computer was Remington Rand’s Univac, but not in the mind. The first computer in the mind was IBM. And IBM went on to dominate the mainframe computer business with as much as 80 percent of the market.
The first MP3 player with a hard drive was introduced by Creative Technology, but it didn’t get into the mind. The first MP3 player with a hard drive to get into the mind was Apple’s iPod. And so it goes.
What if you can’t be first? There is still an opportunity to be second. It’s the law of opposites: “If you can’t be first, you can be a strong number-two brand by being the opposite of the leader.”
Coca-Cola is the old, established brand of cola. Your parents drank Coca-Cola, so Pepsi-Cola became a strong number-two brand by focusing on the younger generation. “The Pepsi Generation” was the theme.
Listerine is the bad-tasting mouthwash, so Scope became a strong number-two brand by being the first good-tasting mouthwash.
Mercedes-Benz makes big, comfortable cars, so BMW became a strong number-two brand by focusing on smaller, more nimble cars. “The ultimate driving machine” was the theme.
What about being number three? Forget about it. In most categories, there is room for only two brands. Coca-Cola and Pepsi-Cola. McDonald’s and Burger King. Duracell and Energizer.
Posted by AlRies on October 19, 2005 at 01:17 PM in Business Growth | Permalink | Comments (0) | TrackBack
