Advertising likes to celebrate its successes but there are a multitude of ways in which marketers and agencies can get things wrong and which they are understandably reluctant to discuss. adam&eveDDB’s chief strategy officer David Golding and head of effectiveness Les Binet bit the bullet during last month’s IPA Effweek.
Among the ten things they highlighted were the dangers of price promotions, which are frequently regarded as a good way to bring people into the brand and encourage consumption. The problem is that most lose money, advice that comes too late for brands assessing their Black Friday and Cyber Monday plays.
“The long-term effects are actually dangerous for brands,” said Binet, “because they teach people to buy on price, rather than some other, more emotional, benefit.” (For more, read WARC’s report: When advertising goes wrong: lessons from past failures.)
He offered up the example of an unnamed brand which had pursued the idea of a digital price promotion, which involved getting people to download an app and then, at a certain point, when demand for the product peaked, giving them a discount online through the app.
But very few people downloaded the app. And in any case, price promotions don’t generate much, if any, incremental income.
“Only someone who buys the brand is going to download the app and it only triggers the price promotion when they would be likely to buy the product anyway,” Binet pointed out.
“So almost no incremental volume. And then what it does, of course, is it sells the stuff you would have sold anyway, at a low price, which means it’s unprofitable.”
Golding also highlighted an unexpected consequence of price promotions for rival brands: under-pressure department stores like Debenhams and House of Fraser in the UK have resorted to discounting, which has in turn affected John Lewis, which, with its promise of being “never knowingly undersold”, has to match other stores’ prices.
“So the brand gets no benefit whatsoever from any kind of price promotion effect,” said Golding. “It gets no additional sale because it’s not marketing and price promotion, it just loses profit.”
You can find out more about common mistakes to avoid by watching a new WARC webinar, where Les Binet and Sarah Carter discuss their book How not to plan.
Sourced from WARC