Conventional thinking is that great products sell themselves, and advertising is “the tax you pay for being unremarkable.” The truth is, if nobody has heard of your product then effectively it doesn’t exist. Some companies get lucky and spread through word of mouth. They send the beta version to a handful of friends, and it goes viral from there. To saturate the population unaided, a product has to be so memorable and shareable that it maintains a viral coefficient above 1. That’s a term borrowed from virology which means that, on average, every user recruits at least one other. You have to build something truly remarkable to cross that barrier. Oftentimes it’s a safer bet to invest in advertising instead. Even when you do ‘go viral’, it tends to be short lived – exponential growth can’t continue forever – as the popularity of a product rises, there are less available people in the pool to be recruited, so growth inevitably slows, following an ‘S-curve’ pattern.
Space in our brains is limited, and new products are showing up all of the time to compete with those who’ve already lodged themselves in our memory. We don’t care about most categories of purchase, so at most we’ll remember 1 or 2 things about 2-3 of the top brands in a space. Spending more than a millisecond comparing dish soap brands, is likely a waste of time – choose the one you recognize and move on. With that framing, advertising is a public service. It’s a weak force that helps nudge us in a certain direction when we want to make decisions quickly, so we can move onto the the parts of our life we do care about. For it to work, you must broadcast product information broadly, in a way that’s costly, and therefore difficult to fake.
This isn’t a man-made technique. As Rory Sutherland at Ogilvy says, “A flower is a weed with an advertising budget”. Much like a Peacock can’t grow illustrious feathers if it’s sick (making it a reliable signal of a good mate), companies can’t afford to spend a lot on advertising if their products aren’t good enough. Like any complex system involving humans and a profit motive, advertising is prone to abuse, but it works remarkably well at scale. Nobody spends $5 million on a Superbowl ad unless they plan to be around for a while. As Marshall McLuhan says ‘the medium is the message’.
Proof of funds is one way to de-risk a potential purchase in the mind of the consumer, but a far more effective one is proof of effort. Every advertiser pays the same for the Superbowl advertising slot, but it’s the most creative, funny, emotional adverts that get shared later on social media, talked about in living rooms, and remembered when shopping next week. In 2015 the coolest, fastest-growing start-ups had beautiful photography on their websites, until Unsplash and other free stock photo websites leveled the playing field. The vibe then shifted to illustrations, in a style called ‘Corporate Memphis’, because that was the next best way to subconsciously indicate that you could afford to, and cared enough, to hire a quality designer. With the advent of free stock illustration sites, and AI art tools like DALL-E, expect the vibe to shift again to something costlier.
Quality is fractal. Any small part of it is indicative of its whole, meaning you can make a good judgement about an entire product by looking at a small piece of it. Intangible value may be ignored or treated as inferior by MBA types, but Entrepreneurs know it’s actually an inseparable part of the product. Consumers usually aren’t able to measure the quality of a product directly. In blind taste tests only 2-3% of people can even distinguish if they’re drinking red or white wine. Consumers look for sensory queues to determine how ‘good’ a product is. Higher priced wines are enjoyed less than cheap ones, unless you can see the label, then we rate them as more enjoyable. Michelin starred restaurants with amazing food, still clean the floors, throw out rotting food, and decorate the tables, because they know regardless of how good the actual product is, consumers aren’t just there to eat the meal, they consume the entire experience. As Chef Gordon Ramsey says, “It doesn’t matter how amazing the steak is, if it’s served on a cold plate it’s crap”.
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