David Ogilvy was the enfant terrible of advertising in the 1960's and wrote a few books, in particular OGILVY ON ADVERTISING I have long recommended. He appears to have had the gift of ADD/ADHD, if his CV is any indication. He was an innovator and a truth-teller.
Ogilvy points out most advertising is a waste of money, largely an ego-investment in the form of a valentine to the CEO and crew that run the company. Think of Jack Welch and GE, and all of the money spent to tell us they "Bring Good Things to Life" in spite of the fact they at the time were pursuing business and allying with government programs that much harmed our economy.
The book made one point I found astonishing when I first read it. Ogilvy said never run an ad without a coupon. Now, Ogilvy represented Rolls Royce and Sears. Sears, I can see a coupon. But Rolls Royce? Yes, a coupon for a brochure that advanced the sales job on a Rolls Royce, but far more importantly, showed Rolls Royce exactly the response rate to the ads placed. Ogilvy taught every ad should be keyed ( indentified in some trackable way) and as dollars are spent on ads, you know exactly what you are getting for your money.
As a small business grows, small amounts of experience inform the entrepreneur as to what precipitates a customers buy. the unique offer of the entrepreneur, in the process of designing and redesigning based on market feedback, also shapes any advertising message, at its most effective, within the enterprise and as the ever better designs are being developed. It is a pas de deux between design and advertising message, the one working with the other.
in big biz, since the taxpayers ultimately support the corporations whether they fail or thrive, especially if they fail, advertising is just spending money to aggrandize oneself and support the regime. When Union 76 advertises how the oil company is advancing green initiatives, it is simply coordinating its activities with the state, and charging the cost to the taxpayers, not the customers. The rank and file celebrate bringing Union 76 into the fold of the green movement, when in fact it is a defeat.
But back to efficacious advertising. The idea that advertising will necessarily grow a business of course is nonsense. The ads must be effective, Ogilvy's small point that efficacy could be tracked caused a furor when he mentioned it, but in fact it did little damage, since, as I said, most advertising is pointless and paid for by taxpayers, not consumers, anyway.
One aspect of the damage done by government intervention in the market is since the big bucks in advertising is misallocated in the area of promoting the regime and the big biz/big govt axis of evil, what advertising skill set that is out there is malinvested in inefficacious means. Little if any work is done in the area of solid art and science of advertising.
Ogilvy's point is critical for we who actually provide a value in the marketplace. We can know if advertising is efficacious as it runs. I lay out in my book some ways of using the principle of subsidiarity to get the most effective advertising, but it should be read in the context of Ogilvy's work.
Until the time comes when advertisers have a model that guarantees a return on your investment (Google is moving in this direction) you are on your own, but can be well guided by Ogilvy, and the tried and true practices of small businesses.
Saturday, January 2, 2010
Advertising
Friday, January 1, 2010
Martha Stewart Does Yeoman Work
New Years Day I watched a Martha Stewart Show (never before have I done this) since her topic was tech and social networking. She had the founders of twitter, facebook and a yahoo.com rep on the show explicating their services, plus a wee bit of background. It is a good overview of these services, which you can view for free on Martha's site.
My interest has to do with a project I am working on, trade worldwide in services... and I knew Martha would offer a tight, informative overview... and she did.
Wednesday, December 30, 2009
Steel Just Got Cheaper
Every where in the world except USDA. USA steelmakers have accused China of dumping steel in the USA market. The act of dumping is redefined every so often becuase once defined, the powers that be find it does not occur. Now "Dumping" just means selling for less than Americans sell for.
Now the funny thing is USA already pays higher prices for Chinese goods than anyone else on the earth. With USA stupidly taking themselves out of the steel import market, there is more chinese steel for everyone else, meaning German and japanese cars will be all the cheaper for teh USA market. Sigh. We may have saved 20 steelworker jobs, but kiss 200 autoworker jobs good-bye.
Why the US government forbids citizens from buyuing whatever they want at whatever price is available, I don't know. Always iin government action, there is a winning side and a losing side. Always in a free market, both sides win.
Tuesday, December 29, 2009
Against Interest
I am going to add interest payments to my topics on this blog, and I will work against the practice. Let me lay out some premises first.
One of the initial problems will be definitions, something the Austrians argue over:
Interest
money
property rights
For example, if I say "interest intervention, as exercised by the fed, is the core mechanism for advancing much if not all of the evil inherent in empire, and ther fore should be suspect..." immediately problems arise from at least two angles...
1. One may disagree with the statement, even if the terms are defined and agreed upon...
2. one may argue interest as defined by the FED and interest as defined in a free market are two different things, so the statement is moot, if it applies to interest in the free market.
Some broad premises:
A. Property is material mixed with labor, that is to say what you can homestead on your own (or by your family). Interest allows you to control far more than you can without interest, but ultimately only with government intervention. As a practical matter, people who refuse to pay interest in spite of contractual obligation, will find no real sanction in a free market. Only government sanction can enforce interest payments.
B. WE can have all that is good, true and beautiful without recourse to interest payments. We cannot have war and starvation and depredation without recourse to interest payments (or to state positively, interest allows the concentration of power that distorts markets).
C. The alternative to interest is skin in the game. Interest assures that someone gets back principal plus, regardless of the fortunes of the borrower. This is a mild form of slavery, and any form of slavery is unethical, and contrary to inalienable rights.
D. Wealth is created by savings, not debt. Debt, which is encouraged by interest, is not the only means to effect some progress.
These are only rough outlines, which suggest to me there is more to be argued against interest in a free market.
Free Market Legal Reform
If you turn on a TV during the day, you will see programs offering what appears to be small claims court, where people air their grievances in front of a TV judge, for your entertainment and edification. like jerry Springer, the real draw is humilating people, but then that is what entertains people who have free time during the day.
The litigants in this trials agree that this free market system will replace their rights under the government system. It was not always so, in USA at times it was illegal to sort out disputes outside of the courts. That was too much, and was reversed.
As a matter of fact, most disputes in USA are sorted outside of courts, even if they are originally brought before a court. Think of all the disputes between neighbors, businesses, families, that are sorted ouot by the intervention of unintersted thrid parties, such as neutral observers, caring family members or for that matter, some preacher man.
We have A legal system, and there are very many nothers, each yielding approxinately the same results. Knowing this, we can say with confidence, we do not need our legal system. We may need A legal system, but not necessarily the one we have. What people fiind objectionable in our sytem is the lawyers, but we may be mistaking human frailty for a systemic problem.
While the Founders were debating the structure of USA, Immanuel Kant was critiquing their progress from Germany. Kant observed there was an inherent conflict of interest, for a system of checks and balances, to have officers of the court (lawyers) serving in either the legislature or executive branch. If we were to prohibit this conflict of interest, I think we would find the legal system get back to its roots. Of course, lawyers controlling the legislature will never vote themselves out of privileges, but we can unliaterally adopt an eithic, “never vote a lawyer into office.”
WE can fix our system without submitting to its corrupt processes, and certainly without violence. It's just business.
Monday, December 28, 2009
Free Market Charity
One of the human faculties is altruism, and we act on this, some more than others. Christmas Eve a Salvation Army major was shot dead in front of his three young children by robbers.
The story is largely ignored, because such people are not real soldiers, and although the serve and protect the poorest among us, they are not cops.
William Booth was an entrepreneur who regretted the lack of response by the Church to the depredations of the industrial revolution. In particular he was incensed by the traffic of young girls from Scotland to rich industrialists in England. It was widely held that the cure for syphilis and gonorrea was to have sex with a virgin, hence the widespread trade. The trade was so powerful it would take an army to quash it, but since the powers that be were supporting the trade, it would have to be fought on a spiritual battlefield, so he founded the Salvation Army. There are far too few such religious entrepreneurs.
The Salvation Army is unique since it presents itself with the trapping of a military, what with uniforms and rank. But from the commanding general, to the newest recruit, everyone is paid exactly the same, and the benefits package is the same. The Salvation Army has "majors" and other ranks so people have someone to turn to when a question arises. The various ranks are to effectively better serve the lower ranks, rather reflecting the teachings of Jesus.
Although the Salvation Army does far more good with far less than any other "charity" in existence, it is rather ignored because the government controlled media does not care for its radical orientation. The left wing resents the witness of the Salvation Army that we do not need government programs for the poor. The right wing hates the nonviolence of the Salvation Army.
In the alternative universe of the Salvation Army, the murderers will be forgiven, are forgiven. and the entire Salvation Army is praying that the murder of the major results in the murderers coming to Jesus. Again this reflects the death of Jesus himself.
WE are obliged to pay for uniformed services provided by the state, although no one in uniform is obliged to respond to any specific request for help but those the state claims to serve and protect, according to the US Supreme Court. On the other hand, Salvation Army personnel daily walk into the Valley of Death, volunteering to live that felicitous life that comes from helping others. in the name of God.
Although the killing of a police officer is sad, it becomes the occasion of a massive public state funeral. The Salvation Army will host something quiet and dignified, with prayers for the murderers as well. The real celebration, as all in the Salvation Army know, will be in Heaven.
As we work through the destruction the changes in the USA system, currently falling apart, it would be good to look at priorities, and keep in mind the good done by such free market entities as the Salvation Army.