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The New Science of Marketing: Advertising with Radek Czahajda

by
Radek Czahajda & Valueships

The New Science of Marketing: Advertising with Radek Czahajda

Executive summary:

What is currently hot in advertising research? I went through the most recent and impactful research in the field and collected multiple, practical insights for you:

▶ The definition of advertising needed to change due to rapid advancement of this field

▶ Scientists listed several inefficiencies in advertising, that most companies fall into

▶ Different platforms require different communication style. Scientists defined these styles for Facebook, Twitter, YouTube, LinkedIn and Instagram

▶ A new classification of influencers was created. It helps to design smarter influencer marketing strategy.

▶ An interesting experiment on advertising disclosure showed that a lot of sponsored content is bringing opposite results than expected.

▶ Emerging markets are growing more rapidly than one could assume.

Transcription:

Radek: Welcome to Science of Business podcast by Valueships. My name is Radek. And together with experts from various industries, we discuss new research pieces and their application in business life. If you're a manager or you want to be up to date with science that can be applied in your work, this podcast is made for you. 

Welcome to another solo episode of Science of Business podcast. Today, I have chosen five different scientific articles on advertising, and I will prove them to you. We will talk about advertising efficiency, about advertising in emerging markets, about the differences in advertising depending on the social media you choose, about the types of influencers and also about how the advertising definition changed over the lifespan. 

Let's start with the first one. Hilda Vurvald from university of Amsterdam was recently conducting a research which major outcome is that there is no such thing as social media. The users differ in the way they play with social media. They expect different contents and also different advertising and as an outcome of this research, the scientists clustered how should we design our advertisement depending on the social media for Facebook, Twitter, YouTube, LinkedIn and Instagram. What I like about this research is that the sample was for 1346 social media users and the research was conducted by market research agency so we do know that the quality of the results is very very high and in terms of the procedure, the research consisted of three elements. 

First, the participants were asked how do they work with different social media, what they use it for. Then they were asked how do they perceive different types of advertising depending on the platform they see it on and lastly, the scientists combined those two answers to find how different types of advertising work with different social media. And this is what exactly I would like to brief you with. I think it's one of those great examples of an article that you can really read and read and read through several times to think about it, to think it through to find something that will work for you and I do recommend that but if you don't have time, here are the major outcomes. 

So, for Facebook, the type of advertising that is perceived best is the one that have some practical use. So, it is educating, edutaining, giving some inspiration for something they would like to do and from my own experience, I can tell this is a format to really worth playing with. For example, in my recent book advertising campaign, I was debunking the myth that we are eating spiders at night while we sleep. By the way, this is a myth, this is not true. We are not eating spiders while we sleep. This was invented by Lisa halls in 1993 to show how bullshit is spreading over the public arena quickly. It wasn't about internet spreading but generally, how we can easily spread some fake information to wide audiences and this myth stays with us. 

So, it was a quick small piece of information of practical use. You can share it with your friends, you can share it with your family and so forth and I think this is the simplest way to use this practical use as a guiding principle for designing or advertising in Facebook. If you have some more capacity, you can think of some how-to videos that could also give this practical information to your audience and basically, what you have to remember is that something to play with is to have practical use as a feature of your advertising on Facebook. 

The second feature for Facebook is something that is the first feature for advertising on Twitter, which is topicality. And by this, the scientists understand that you need to provide quick and just-in-time information to your audience. So, this includes real-time marketing. This includes informing purely about your advances about the benefits of using your tools, your services. Yesterday, I bought some new headphones that are wireless and that have very long time on battery and I see this particular information to be an example of topicality. So, this is something also you can play with concrete facts, concrete information about the features of your products, of your services that you're proud of, that you would like to share with your audience. This is type of content to use on Twitter first but then also on Facebook. 

The second distinctive feature of Twitter advertising is social interaction. So, creating opportunities for people to exchange opinions between each other using Twitter and as we know, Twitter is the best tool for that. There is no better tool to create some rage than Twitter, where people are more open to share their opinions in the comments, in the retweets. And one way to achieve that is not to shy away from your values from what you believe is important, from what you think people should or should not do. This is a characteristic also of a charismatic leader, something that John Antonakis was researching. So, by expressing your opinions, you are quickly dividing your audience into those who agree with you and those who do not, which is the cost of this statements, this boldness but on the other hand, you are also using social interaction which is one of the distinctive features of Twitter advertising, something to keep in mind when designing your advertising for this particular platform. 

This social interaction appears also on the second position for Instagram and I think one of the ways to work with that in your advertising is while you work with influencers, inviting them to be the ambassadors of your brand and to lead the talk, lead the conversation about your brand with their audience, asking questions, asking for feedback and you as the background company, background brand for this interaction is also a way to build this social interaction on Instagram. I will talk a bit more about the influencers later on. 

Well, the first feature of Instagram is entertainment and that's quite surprising because I put all the social media for entertainment but actually, Instagram and YouTube are the two ones that entertainment is the main purpose. So, for Instagram, you can think of finding a way to build entertainment while remaining consistent with your brand. So, maybe not necessarily being goofy when you're selling coffins but to some extent, figuring out in which way you can provide entertainment. You can provide some fun to your audience that is consistent with your brand and delivering such message and interestingly, also in the same campaign I was telling to you about with the spiders being eaten, different visuals are working better for me in Facebook and different in Instagram and those that are a bit more silly, a bit more fun where I just took pictures on the green screen and positioned myself with the book in some random places is more likable on Instagram than it would be on Facebook. 

So, even playing with the visuals is a way to build this entertainment on Instagram. Then we move to YouTube and in here, we have already two factors that we know. The first one is entertainment just like in Instagram but the second one is practical use, like in Facebook. So, combining those two, you have videos that are fun to watch but on the other hand also provide you with some information of practical use and for me, the YouTube ads that I don't skip are the ones that are about gaming, that are informing me about new games being released, that are informing me also about new movies being released. 

So, sometimes I’m just opening YouTube to watch some tutorial but first, I watch the full ad of a movie review or of a video game release information without skipping and I also recall a very nice ad that was starting with the words ‘sure, skip this ad, just like you skipped blah-blah-blah’, you probably know what I’m referring to and even though this became a meme by itself so a lot of people then were just creating memes that they skipped the ad because the actor there challenged them but even this already created some brand recognition. That is one of the things that we aspire for. So, it was entertaining, it was informative, it was telling a lot about how investing works, that particular ad. And I think this is where we should aim at. So, maybe not necessarily creating yet another ad with 'sure, skip this ad’ as a starter but also using the same entertainment approach that they had when creating their advertisement. And the last social media in this review is LinkedIn. And in here, the first one is topicality. So, it is just in time, quick information that people search for in LinkedIn, so especially about job advertisements, about the changes in the job market and so forth but what was interesting to me to see is that the second feature for LinkedIn is pastime and this is the only time it appears among all the social media. 

So, LinkedIn as a platform, we see that as a place where people go to search for work or to discuss career related issues but on the other hand, what people do is that they go to LinkedIn during their work to have a little bit of a break. So, thinking in this terms, you can also provide a lot of contents that will give them this break and there is a lot of discussion about what is right, what is not right to be posted on LinkedIn and I think I should leave it to you like for me, I wouldn't really cross the line and post cats and dogs as a pastime on LinkedIn but there is a lot of cool things to share, cool videos to share that are interesting to watch and will provide pastime while still remaining related to your services, to your work, just giving some digestible information that people can receive in some 15 minutes break to enjoy their free time, their break at work, official break or unofficial as it usually happens. 

So, now take some notepad and note down Facebook practical use and topicality, Twitter topicality and social interaction, YouTube entertainment and practical use, LinkedIn topicality and pastime and Instagram entertainment and social interaction. And what I would like to challenge you to do is that when you will be creating your next advertising to just check how are those features appearing in your campaigns and maybe creating just one another creative to test that would follow those rules and see how they work in your campaign. If you would like to read this article, search for engagement with social media and social media advertising, the differentiating role of platform type. It was published in journal of advertising. And now, another article from the same journal, this time about the typology of influencers and what is also interesting is that I observe that a lot of research right now is being done on the topic of influencers. 

I think this is the hot topic in research and I wonder how does it resemble the advertising as a branch of business if it's also still a hot topic, if it will remain a hot topic but definitely something to consider, especially if you didn't really involve in influencer marketing yet, maybe this is the time to start. So, in here, the scientists have analyzed the social media posts of 21 influencers that were selected as the top influencer from one of the rankings and they analyzed their social media posts from three years to find some commonalities to define how they work with brands, how they work with products and how could we cluster the different roles they take in terms of influencer marketing. And just to give you the size of this research, it was 34153 social media Instagram posts that they were analyzing. 

For the final analysis, they chose 1960 social media posts to go deeper to actually have a portion of information to be used to be possible to analyze by hand but still a lot of work to give us this information that I will be presenting to you in a second. So, the goal of this research was to cluster how this collaboration with influencers can work. So, when you're designing your influencer marketing strategy, you can think in which way you would like to engage them because there are different styles, there are different methods of collaboration and what the scientists try to do is to cluster them all into one simple typology. Result of this work, they came up with eight different roles influencers take when collaborating with brand and they further clustered them in three categories; a spoke person, co-creator and co-owner. 

A spoke person is the role that is most frequently chosen and this is when the influencer have minimal level of control of the product. So, they don't really have anything to say about how the product looks. They only promote it to their own audience. They can speak as either the users of the product or as the experts and then spoke person can be a billboard, a stylist and the ambassador of our brand. The billboard is the least favorable one but it still exists. This is when the influencer doesn't also have anything to say about how they present the product. So, it literally looks like a billboard with their picture on it and with the catch phrases created by the brand and this doesn't really bring a lot of attention. This doesn't really bring a lot of traction towards the brand but interestingly, it still appears on even in the top social media influencers marketing strategy. 

So, something to really be careful about is to make sure that we do give some creative freedom to the influencers on how they would like to present the product that would be related to the way they communicate to their style and maybe to give them also some possibility to use what is their distinctive feature as an influencer in the way they present the products we offer. So, for instance, an entrepreneur will present the same product differently than another, if we use this general types of contents that people offer in their social media or even differently than fashion stylist and so forth. So, depending on the source, the role that the given influencer takes the way they present themselves, we should give them some freedom to design the pause to design the way they present our products, our services to their audience. And this is not always happening. When it does, they're not billboard anymore, they are called stylist. 

So, then they add this personal touch. They add maybe some story, maybe some context on the collaboration to give a bit more content to their audience and also to achieve better results in terms of collaboration. And then the third type of a spokesperson is an ambassador. In contrast to the previous ones, this is when we have a long-term cooperation with the influencer. So, they are regularly posting about our new products. They are engaging with communication with our audience just like I told you in the previous research, this is exactly this role that gives us the voice, the opportunity to have a dialogue with our customers through the ambassador, through this influencer who is our ambassador. I think this is something that is not that frequently used but definitely something to take a look into because it gives you a lot of opportunities to build strong connection with your audience and to have a face to your brand. 

And then in here, also make sure that your ambassador is not your billboard but they offer more of their individual touch to the way they communicate about your brand. In the second type, co-creator, this is a person that do have something to say about how the product that we offer looks like. They either co-designed it or they consulted it. So, the co-designer works very closely with the brand to create a specific product or a specific line of products. This happens frequently in the fashion industry, where some influencers are involved in creating their own branded product lines that they can then promote to their audience but it can also be used in different market segments, where you can involve some influencers to give you feedback to support you in designing the product and then to brand it with their name. And something related but with a bit less involvement is the consultancy, where it's not branded. It's not their own product. 

They are only involved to give you some feedback to give you some consultancy in different periods of designing the product to make sure that it is fit to the market, that this is fit to the audience that they represent and then this can also be used as a backstory for further collaboration as an ambassador or as the stylist, as a spokesperson of your product of your service. And lastly, we have co-owners that don't only have something to say about the product but about the entire brand you offer. So, I’ve seen a lot of different examples of when an influencer is invited to be a part of a new established brand, not only in the fashion industry but also in services, in IT, where they are invited in a way as a spokesperson but they are also co-owners of the company from the early start. And I think this is quite a nice strategy to have a strong brand from the start on. So, something to also consider and then you can decide how much involvement do they have in terms of decision making. 

So, what influencers do is that sometimes, they are sole proprietors, so they own the company. They establish the company by themselves. They are becoming partners, merging their forces with some other brand or with some other influencer to build a common brand together or they are facilitators. So, they are supporting some other brands to grow, boosting it using their audience, using their reach and I think this is the third one, the facilitator, is something a startup should take a look the most into or the partners because, of course, I’m talking to people who want to establish their brands so probably you're not interested into creating a brand that is solely owned by an influencer. 

And again, I hope you take some notes about those different types of influencers and whenever you will be reaching them out to really think about different ways, not just okay, create one post and one reels about my product but actually thinking how you can involve them more to provide some more fruitful collaboration and some more benefits to your brand and exploring those different types of influencing and the roles they have in branding your products and your services. If you would like to read more, you can find the article by the name ‘multifaceted influencers toward the new typology for influencer role in advertising, publishing journal of advertising 2021’. Now, speaking of influencers, there is one more research I wanted to bring, which is about disclosing the collaboration. 

What I sometimes observe on the market is that even though it's required by law in more and more countries to disclose that this is a paid advertisement of a product, it is sometimes done in a sneaky way, sometimes trying to sneak in this fact by just adding a hashtag collabo, hashtag collaboration, whatsoever, just not really emphasizing that this comes from some professional collaboration with a brand but actually, a research by Steffi De Jans and colleagues from Ghent university has shown this is not the most optimal strategy. In the research, they focused on youth and they were trying to see how this disclosure works with perception of the product, perception of the influencer and what it appeared is that when the advertising was not disclosed, they lost trust in the influencers. 

So, the trustworthiness, which is one of the key features of influencers if they are to persuade someone is lost when they try to be sneaky about their involvement in the brand promotion. The scientists conducted some very nice experiment on real recorded vlogs by the real influencers from Belgium. Something to read about, I think it's quite interesting to know how they come up with this results but for us what is most important is to remember that it is worth to disclose the collaboration, maybe even to brag about it but definitely not to hide the collaboration and pretend like you were just a random customer that got to know about this product and you're really proud and that you got it. If you would like to read this article, search for how an advertising disclosure alerts young adolescents to sponsored vlogs, published in journal of advertising. Let's change topic a bit. 

Another research published by Srivastava in journal of marketing communications presented how could we promote our products in India and then why is this important is because IBEF report claims that by 2034, Indian e-commerce will outgrow United States e-commerce market. So, it is an emerging market. In 2017, India increased ad expenditure by 13% while the rest of the world increases by 4% so this is a market that is dynamically growing and maybe it is also about the time to think how you could take your part in it. So, the research was trying to answer how could you promote new brands on Indian market using humor, shock or other emotional appeals in your advertising, which would work best on this market compared to western cultures. There were 345 people evaluating 18 different advertising that were containing those three elements. 

So, six containing humor, six containing shock, six containing other emotions. Compared to western cultures, emotional contents played way more important role in in the emerging market of India. Then if you would like to play with shock, with challenging some values, some traditions, this is a very bad idea for this particular market but also the scientists generalize for the entire eastern cultures, for different eastern cultures that are in the neighborhood. And then humor worked just as fine as in western civilizations but it was a bit harder to implement. So, like some advertisements worked pretty well, some didn't work at all, it depends more on the context and depends more on understanding the humor in this particular culture. 

So, if you are to start some new campaigns in India, something to test is to see how different emotions like compassion, hope, amusement can be sparkled with your creative copy and then observe how it works and adjust. But you have a starter so, and definitely don't go with the shocking advertising. This is also one of the outcomes of this research. If you would like to read more about this research about how they chose the advertising and what were the results, what were the statistical significance of these results, you can find it under the name ‘understanding the viability of three types of approach of advertising in emerging markets, published in journal of marketing communications’. 

Now, I have two more papers. One is about the definition of advertising. I think this is pretty interesting because it was the first time since 2002 when scientists got to think about if the definition of how we understand advertising is still solid. And for this, they collected a panel of experts from both industry and academia. Practitioners, people who write textbooks about advertising, they brought them all together to brainstorm, to figure out how advertising could be defined now in 2021 as the research was published. And without further ado, here is the definition. ‘Advertising is paid, owned and earned, mediated communication activated by an identifiable brand and intent on persuading the consumer to make some cognitive, effective or behavioral change now or in the future’. 

And now, this is something you can already use in some of your advertising training or whenever you will be writing about advertising but there are two biggest changes in this definition compared to the past ones that really should give us something to think about. The first one is that in the past definition, it was only about paid advertising and paid media. Well, now we also have owned and earned media. So, both the scientists and the practitioners acknowledge that your social media as the earned media and your newsletter as the owned media and so forth are a way also for advertising. So, this might mean that there is a certain transition in advertising that maybe we will invest more and more into disowned and earned media and not only pay for advertising in the media owned by someone else. 

And the second change is about this cognitive, affective or behavioral change. When we think of the past definition of advertising, it was more about behaviors, about some concrete action you want to persuade someone to do but now with the advancements of science, we also know that the way people think about your brand and the way people feel about your brand will also give you benefits in the long run. So, this also suggests that this long-term strategies for building brand recognition, brand awareness, all these are paying off and are certainly something to invest your time and efforts in. Interestingly, there was a bit of a difference in here between the practitioners and the academia. 

So, the scientists agreed 91% found it very important while 79% of the practitioners claimed this is important. So, this changing of thinking and changing of feeling about the brand as a result of advertising. I think this means also there is some work to do in our companies, in our marketing agencies to recognize that changing minds and changing emotions is also an important part of this entire advertising ecosystem that just persuading one after another person to buy something is just the short-sighted way of advertising something that is no longer valid in 2022. This article is a very interesting read if you'd like to learn more about how advertising was defined over the history. 

So, if you would like to search it, just google redefining advertising in research and practice published in international journal of advertising. And last but not least, the final article I wanted to share with you is about the inefficiencies in digital advertising. And this is a different type of research, where the scientists only gathered what is already known in literature and tried to combine it into one article that combines it all about how we are not efficient in some of the marketing endeavors. The first inefficiency, the outer present is about the issues with measurement of ad efficiency. So, on one hand, we do receive information how this ad works but it's also in the context and just to give you an example, in 2015, eBay decided to turn off their google search ads to some of the geographic destinations and they realized that they are positioned organically so well that actually people still click on what they search for on eBay and by turning off some of the google search ads, they actually increased the return on ad spend. 

So, what we do tend to test and that's also not a default is that we test how different types of ads work. Sometimes, we test placements but taking a big picture and really understanding how our advertisement work also in the long term requires a bit more investment in our data analytics. So, for instance, if I’m now building an advertising that is related to brand recognition, how this will pay off in the long term. And this inefficiency is very closely related to the second one, which is organizational frictions and inefficiencies. So, imagine a CFO is setting the budget for marketing and evaluating the efficiency of marketing manager by seeing how their return on ad spend looks like, how direct conversions look like. And then such a marketing manager will always choose an advertisement that is safe, that will give quick results like, for instance, retargeting instead of building more awareness, bringing more customers to the pool of potential buyers because this is what will give them nice statistics and something to report on. 

Then on the other hand, for instance, when we have some problems with procurement, we will choose a marketing agency which is the cheapest while not necessarily checking how good they will be, how good of a results they will provide. So, another inefficiency in organization that can actually provide some struggle with advertising. Here also, what is interesting is that the scientists provide a statistic that 42 cents on every advertising dollar spent are on commissions and transaction fees in the supply chain. Deferred inefficiency is related to ad blockers. Something we don't really have much to say about it but maybe something we should be aware of is that the ad publishers pay on average 30% percent of their ad revenue to some of the ad blockers to be white listed by default and also interestingly, German supreme court ruled that this practice is legal. 

So, some portion of our advertising budget is actually spent on paying the ad blockers but what is even worse is that some of the new ad blockers are also designed in a way that they accept the ad for a second and then turn it off, which means that you pay for the ad. Even sometimes they fakely click on the ad and this means that you are paying for the clicks you actually didn't get. And this brings us to the last issue and that also we don't have that much influence on but should be aware of is that swant reported that even over 40% of the clicks we get on the ads may not be human traffic. This is called digital advertising fraud and it is expected to be costing us between 6 to 19 billion dollars. 

So, there are bots that click your ads. They can be set by your competitors, they can be set by the advertising company, they can be set by different institutions that have interest in making sure that you will pay a lot for your ads but won't actually receive any results. The major outcome I take from this research is to make sure that I don't shy away from a building brand from choosing the advertising approaches that don't really bring immediate results but actually, this topic of inefficiencies seems to be very broad and I might take a bit deeper look into what does it mean and what kind of activities should we be aware of, what kind of activities should we implement in our advertising strategies to make sure that we are as efficient as possible. 

So, some more insights might come in this topic. If you would like to read this paper and get a bit deeper understanding of all those inefficiencies, you can find it by inefficiencies in digital advertising markets published in journal of marketing. That would be it for today. I chose some of the research pieces that got me interested, got me intrigued but also for the future episodes, I’m looking forward to hear from you, what kind of questions would you like to get answered by scientists, by some solid research. And I will search for those. I think advertising will come again as an episode in science of business podcast but hopefully, this time with more insights on your side. Thank you for today. 

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