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The Warc Blog

A sad day for marketing
 
Left Field
 
Left Field

I remember attending one of Professor Andrew Ehrenberg’s seminars many years ago: I was mesmerised by his somewhat curmudgeonly delivery, the professorial German accent and the frequent references to his favoured hypothetical brands Bingo and Bango. It was like being back at University. Clearly some thought otherwise – a number walked out when they realised that he was attacking things they believed in, like loyalty marketing. I even heard the word ‘rubbish’ used during the coffee break: the ignorance and arrogance of his doubters have always been tough to overcome. The pattern has continued ever since, with the wise few supporting (and funding) his research, but widespread rejection of his message amongst others. My observation that day was that there was a more insidious facet to this rejection: Ehrenberg was not the kind of polished presenter that marketing audiences like. There was no entertaining video or slick PowerPoint charts, no seductive storytelling: just devastating logic, rigorous analysis and years of hard graft. How un-sexy. It is a sad reflection on the credulousness of our world that, given the choice of the following…

  1. A bunch of persuasive management consultants who have done nothing more than a thought experiment and are telling you what you want to hear

    or,

  2. A rather intimidating academic who has spent many decades researching and validating his theories and is challenging something you hold dear

…many chose to believe the former.

But for those with open minds and the ability to grasp the truth of his work, his seminars were goldmines.

So his recent death was a very sad day indeed for marketing. Never have his sharp mind and tenacious pursuit of the truth about how markets work been more needed than now. Many now appear to believe that the internet has re-written the rules of markets and of marketing and a new generation of the gullible are ready to fall prey to the persuasive patter of the on-line apostles.

Undoubtedly Ehrenberg’s most important contribution to marketing was to nail the loyalty myth: the belief that a brand could fruitfully use marketing to persuade less loyal customers to become more loyal and so enduringly increase its share of their category purchasing. Anyone who has read his obituary on WARC will know that the way he did this was essentially very simple, although the maths he used were rather less so. By showing that the loyalty patterns of all brands across any category do not differ much (except slightly by virtue of the penetration of the brand) and that they can be predicted very accurately using a mathematical distribution (whether or not the brands had state-of-the-art CRM programmes in place) he demonstrated the futility of loyalty programmes. The laws of the market dictate brand loyalty levels, not the resourcefulness of marketing. Yet largely thanks to many years of ill-informed promotion by management consultants, many millions of pounds have been wasted on the pursuit of loyalty.

Personally I think Ehrenberg has made an even bigger contribution than this, though one that is sadly usually overlooked. In a marketing world often seduced by the ‘magic dust’ of communications, he has shown that hard science has an important contribution to make to effectiveness. This still makes many in the marketing and communications disciplines profoundly uncomfortable.

So we need more of his academic-grade input to modern marketing. I’m not referring to the morass of hopelessly non-applied work going on in so many university marketing faculties. We need the kind of empirical analysis of real-world marketing that he specialised in, to challenge the emerging beliefs of today and see which of them hold water. The Ehrenberg-Bass Institute exists to continue his work, but where else will we find this? The agency world has largely walked away from pioneering research and client research departments are mostly a shadow of their former selves. Step forward please…



Subjects: Marketing

14 September 2010 14:33
 

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