A Look Back on 50 Years of Advertising - Technology and Targeting

Take a walk back in time as our two positioning gurus reminisce about the advancement in technology and targeting. How has technology changed, and how has it impacted marketing? What technology has been positive and where has it made advertisers mis-step? Mark and Lorraine talk Bernoullis and Zip disks, Amigas and Commodore 64s, film stripping and strip films. Then the duo talks about targeting and personalization capabilities and how the advent of both can be beneficial as long as they don't become a crutch.

Spend 30ish with Mark and Lorraine as they discuss all things marketing, advertising, and positioning!

Transcript

Mark Vandegrift
Welcome to the latest episode of the Brand Shorthand podcast. I'm your host, Mark Vandegrift, and with me is the darling of differentiation, Lorraine Kessler. Lorraine, we're back again to talk about our 50th anniversary and all that's changed in advertising since 1974. I know you and I haven't changed it all though.

Lorraine Kessler
No, not at all. And I don't know how you keep coming up with these monikers, but they always flatten me. I'll tell you the truth. 

Mark Vandegrift
Flatter or flatten?

Lorraine Kessler
I said flatten, but not flatter. Flattening. And flatter. Yeah, 70, gosh. 1973-74, I was a freshman at Bowling Green State University. The Harvard of Ohio.

Mark Vandegrift 
Very nice. And in the 50 years since 74, give me your highlight, like beyond your wonderful hubby, John and your kids. Give me a highlight of what's happened in the last 50 years.

Lorraine Kessler
Well, interestingly, I had a great career at Bowling Green. I went there because I really wanted to go to Michigan, University of. But my parents being from New Jersey were geographically challenged. So they didn't realize, they said, that's too far. They didn't realize Bowling Green's like 40 minutes away. So my evil scheme was to go to Bowling Green one year and then transfer, like get them a cut and just say, hey, Michigan is just right here.

Didn't happen, I had such a great career at Bowling Green and I graduated outstanding senior in art, which was quite for me an accomplishment, something I set my sights on doing and thought I would end up being an art prof and an artist who was well known and featured in magazines. And little did I know that was not going to be the agenda, which was fine. Met John, he asked me to marry him, moved to Dallas, went to University of North Texas, got my masters in art there. Still thinking that was going to be my destiny. And long behold, realized I had to make money. Going door to door with a sign, I'm a starting artist, help me, wasn't really working. So, started in the admin list on the client services side and have never left. And of course had our children and now wonderful grandchildren.

That's it.

Mark Vandegrift
Well, you're a star now Lorraine, you're the star of this podcast. So, you know, national recognition, international recognition, really.

Lorraine Kessler
It's like what? Five subscribers, 20 followers, that's great.

Mark Vandegrift
Oh no, we're now in the hundreds, Lorraine. We're doing, oh yeah, yeah. Yeah, we're doing pretty well. So, well, you know, my number one is my wife, Kim, and our daughters, Madi and Klaire. Those are my easy highlights. One that relates to the agency, and this is how I joined Innis Maggiore, was I was reunited with Jeff Monner. And Jeff knew me when I was knee high to a grasshopper. I was two years old, and he's a few years older.

And we were in church together and he remembers my dad having to discipline his four boys in church when they got out of line and he still recalls that to this day. But we reunited and he brought me aboard his mighty little design studio, and I was introduced to the world of ad agencies. And we, you know, I said we've known each other since we were two, but that was after I had kind of started in a different kind of ad world, which was producing miniature publications for the golf industry. And so just a year after I joined Monter Creative Design, he merged with INnis Maggiore  and the rest is history. So it's my 26th year here, if you can imagine that. Yeah. So what was your first awareness of Innis Maggiore? I know you told our story of being hired, but I think you had the unique impression of us at one point in time.

Lorraine Kessler
Well, yeah, I mean, and this is what it can do for you. There was a, when the agency bought, moved from its 30th street location, which I was never a part of, to its new building, there was a feature in a newspaper, and everybody looked like mafia. It was all men in dark coats. And I thought, oh, that's like not an agency I want to belong to.

Yeah. Um, you know, so, uh, it was, it was a strange impression.

Mark Vandegrift
God sent you that messenger though.

Lorraine Kessler
Well, then he sent that weird messenger and said, reach out to Chuck Innis. And of course, then I met with Dick and my impression was totally wrong of the agency. And I knew it was the place, the kind of place where I wanted to be and where I thought I could help the agency. 

At that time, and you all remember this because you were in traffic, and you used to prepare Dick's presentations that he would do based on positioning. But the rest of the agency was not oriented around positioning at all. In fact, it was, who knew what it was oriented around? Only Dick was really passionately advocating that, but to outside audiences. 

And I remember, because I was hired to kind of new business, and then I was asked to say, what do you think this agency stands for? And I realized that there wasn't one thing that was stood for, but it really occurred to me that it should stand for positioning, because that is the CEO's vision. He’s steeped in it.

And that's what could really give us reputation. I wasn't the one who really ultimately, it took a while for that to get decided and to be acted upon, but that was my first impression, is, why aren't we doing this? Yep.

Mark Vandegrift 
Yeah. Well, we are today. You can see behind me. And that was thanks to Jack Trout and part saying that you guys get it better than anyone else. And we claim that. And to this day, we still stand by it. And that's not going to change, I'll tell you that much. As we talked about it with media proliferation on our recent topic. Oh, my goodness. I don't know how you could survive in marketing without positioning. It's just it's incomprehensible to me.

So, well anyhow, as I stated, we're back on the topic of what has transpired over the past 50 years in advertising. And I'll put up on the screen again for grouping purposes what we came up with. And I'm sure there's way more than all of this, but these are the things that jumped out at us. Media proliferation, technological changes, and that is going to tie into the media proliferation, but it takes it in a different angle. The advancement in targeting and personalization capabilities, transactional media like lead generation, first party data, all of that; B2B advertising, the growing importance of branding, and then experiential marketing. So, we talked about media proliferation in our last episode. Any further thoughts on that before we move to the technological changes, Lorraine?

Lorraine Kessler
You know, I think we covered that well, and I'll refer our viewership to episode one.

Mark Vandegrift
Episode one, season two. Great, let's move on then. The technological changes we've seen are probably as obscene as anything, right? They really do go hand in glove with the media proliferation. And it was funny, we were watching an episode of Everybody Loves Raymond the other night. I don't know if you remember that sitcom. 

Well, Raymond's mother was in a ticked off mood and she cried out, our kids have been lost because they just sit there and stare at the TV all day. Well, isn't it ironic that now we can fill that with they sit there and stare at their phones all day. Well, in 1974, when, when Innis Maggiore started, it was interesting that the PC wasn't really a thing. The idea was there and there were computers, of course, but there were very, very few people who had them. We, we thought we were living large when my uncles who had the first retail computer shop on the East Coast, they shipped our family a Commodore 64 in 1981 and we were so excited. We got to play a game called Jump Man and some of the other early video games. And boy, we were living high. We had neighbors over all the time. 

Lorraine Kessler
When computers first came into our agency world in Toledo, they were, at that time, thought of as a tool only for the creatives. And you'll laugh at this, but my boss at the time, Bill Markin, gave me the first PC. And he said, because he tried to account people to use it, and they wouldn't. And he gave it to me. I'm giving it to you because I know if they see you use it, they'll all want one. And that's exactly what happened.

Mark Vandegrift
Well, it'd be interesting to know what they brought into your agency because from a creative standpoint and my uncle sold this, it was called the Amiga. It was a high-end line of Commodore and the Amiga … the Mac wasn't a thing, right? … the Amiga was brought out and it was cutting edge. I remember my uncle sharing some of the things it could do. And this is now in almost like 1990 when I was, I worked in their shop over the holiday break and they were showing me the Amiga. Well, they were going out of style. It was one of those things where marketing didn't exist for them and they just failed as a brand. But they were cutting edge at that time for the creative side. And I just wonder what your particular agency, what they brought in terms …

Lorraine Kessler
I'd have to ask Bill Markin because he was the one in charge of all that. Um, and he was very much more PC than, um, Apple, even when Apple came to fruition because of the cost efficiency, PCs were much less, but of course the creatives love the Apples. So, uh, but yeah, I love the PC because I, uh, I hated typing. I just hated it. And the way I write is like, you know, write five words and then edit four of them. And It's just like, there's just not enough white out in the world for that.

Mark Vandegrift
Yeah, what was interesting when I started at Hillsdale College in 1988, they were opening up the first computer lab they had on campus. And because of my uncles, I did bring in a Mac. It was the first desktop model. It had 20 megabytes of storage… 20 megabytes of storage on this desktop. And it was like this wide and maybe this long and then the monitor sat on top of it. And so, they were impressed by that. So, they let me work at the computer lab and I worked there all four years. And it was funny because very quickly you'd see the Macintosh. Well, it started out with Mac II Es and those were the dinosaurs in the back of the computer lab and they had these Mac-Macintosh and the floppy three and a half inch discs that you'd push in and all you did was desktop publish. Everyone came in and typed their papers. And that was the start of my, really my computer technology background. And it's really never left me, but it was interesting. That was in 1988, a 20 megabyte storage. So, then we went through the, the era of we had, you know, the five and a quarter, five and a quarter, three and a half inch. Then they came out with Bernoulli's.

And the big thing about iOmega Bernoulli's, yeah, you could drop them, the advertisements, you could look this up probably on YouTube. You could drop the Bernoulli from like three stories and it would survive. It was this thick and it was about, it was six inches, I think. And then that transformed into the zip disc. Do you remember those?

Lorraine Kessler
Oh my gosh, yeah, I do remember the Zip disk. 

Mark Vandegrift
And the great thing about the Zip disk is we could actually put the files on there and send those to production instead of having to do all the craziness that it used to involve with having to get the CMYK films that you would get sets of those and send those out to the various publications. Oh my goodness. And then that evolved and we got the internet and we could start sending files through the...

Lorraine Kessler
Yeah, I used a Zip disk when I used Publisher. I'd like us to go back to Publisher, by the way, Mark. Inside joke.

Mark Vandegrift
Oh, I can go back to CorelDraw. I was using CorelDraw to lay out golf courses for this golf publication I worked for. And we had this big pad and we would have overhead shots and we had this stylus and we could trace the hole and the greens and put all the trees on the course. And then we go into CorelDraw and we would drop in this kind of, if you want to call it clip art at the time, it was pre-made by us. And we would put in pine trees and hardwood trees and bushes and all that. And boy, it's, I mean, talk about going down memory lane, the technology in the last 30 years versus the 50 years. 

And you know, Dick Maggiore shares the story of, we had the second in Ohio, we were the second in Ohio to have what was called the addressograph-multigraph varityper machine. Yeah, if you were to look that up, you can type in AM varityper. All it looks like is a fancy typewriter. 

Kathi Maggiore came out of the type setting part of our business. She had already moved on, but that kind of replaced the typesetters. They used to do that. But at the time, that started to revolutionize typesetting. And then QuarkXpress came along, Freehand came along, and then you had Adobe by Freehand, and now we have Adobe InDesign and Photoshop and Illustrator and all those that is the Adobe Creative Suite. But man, what a path just going through the 90s, the early 2000s.

Lorraine Kessler
Well, and you used to have to have more agency staff. You had to have stat camera people, key liners. Remember the key liners? So I remember we used to have two or three of those people. I mean, technology just completely replaced the need for that.

Mark Vandegrift
Well, you know my joke to the newbies here. I tell them that I used to be a stripper. And they're like, they don't want to visualize that. And then I have to explain that, I stripped film together and I used a loupe and the registration mark. They don't even know what these things are. And I had to make sure that the cyan, magenta, yellow and black… CMYK, all the films were lined up. I did that as part of, again miniature publications we did for the golf courses. And they, boy, when I say I was a stripper, that gets some funny looks. 

But that's just one aspect of technology though. Lorraine, you've seen technology change in the ad world. And you know, that's like consumer behavior and consumption practices and analytics and all that. Give me, give us your sense. I see it from a like technology geek perspective, you see it a little bit differently from the standpoint of the consumer mind. Share with us a little bit how you've seen that.

Lorraine Kessler
Well, not just consumer mind, but consumer behavior and lifestyle. And, um, I mean, I, I see that technology in our business, technology and communication at large, not just in advertising, right? Technology as a communication, uh, platform, um, really is not unlike any other infrastructure build that has radically changed the way people live, the things they're exposed to their behaviors. 

So, you think about when railroads were built, right. And all of a sudden cities across, I mean a lot of people today don't really go back and see the comparisons, but there are many, many comparisons. These towns that never existed and had no reason to exist grew up because the railroad went through their town. St. Louis is a great railroad city that evolved. 

Then you had things like even the car. The car revolutionized where people lived. I remember there's a great, again, documentary, I think on YouTube, maybe about Horn and Hardart, which was an amazing, unique kind of cafeteria, coffee, food place in New York and Philly, and very unique. And how it really served people who lived in cities because people lived in cities and worked in cities. And then of course what? The car created suburbs and all of a sudden Horn and Hardart went away because people did not live in cities any longer. They lived in now sprawling suburbs. 

So huge behavioral changes happen with these infrastructure builds and I see it in the communication business. And so, you know, the other thing is just from a productivity standpoint, right? All of a sudden the production per hour has gone super, has gone up incredibly, and you can do a lot more with less people.

Now, some of those people had to learn new skills, of course, but we just talked about typesetters and key liners and stat camera people and whatever the heck, yeah, and strippers, which in our business maybe went away, but not everywhere. 

So, ironically, I too think specific to our business, I think that all this technology at our hands to make our job more effective and efficient and do things quicker and even I think in a better way has had a negative effect on revenue growth because I am not kidding you. When I started in the agency in Toledo, Ohio, 1981, the value cost for a campaign or TV ad or a print ad or billboard or whatever we were creating is exactly the same as what Innis Maggiore charges today. And like, how can that be? 

Well, because there's been a, you know, less people creating less hours. And here's part of the problem is, and you know this too, this has been the age-old problem with our way of monetizing our business, right? Is it's always been an hours-business based on how many hours does it take us to make this? Well, if you have less people than your cumulative hours or less in order to create something. So now you're dealing with less hours times a dollar amount. So no matter if you raise that dollar amount, even though that's been raised, there's still maybe one person doing something three people did before, so you have less hours. 

It's a woefully ridiculous model for our business because I mean, in 1971, for example, Phil Knight, Nike, paid a graphic designer student $35 for the Swoosh. Now, how much do you think the Swoosh is really worth in value? What do you think the Pillsbury Doughboy is worth, right? Someone came up with that idea and probably charged like, I don't know, a thousand bucks. Here's an idea. And so what is that worth? 

So, the whole way our business is monetized with technology actually exacerbated, I think, kind of the problem, if not the idiocy of how we value what we do. And no one's found a better way. We've talked about performance payment, and that's so impossible because it's the how do you assign the agency could have the greatest concept in the world, Pillsbury Doe Boy, but then it gets executed by the client, and if it's poorly executed, is that the agencies fault? So performance hasn't really worked either. And this continues to be an age-old problem, but I think it's exacerbated by technology.

Mark Vandegrift
Yep, exactly. Well, and you know, when you think about the cost of technology, it's gone down. I mean, what we hold in our hands today, it's pennies on the dollar of what we used to have to pay. I remember for this golf business, I think one of the first servers we ever bought was $25,000. And it, I mean it might have been 500 megabytes at most and we carry around we carry that around in our pockets now and the cost of it though is insignificant compared to what that was. So, you know if you want to say it's the cost per gigabyte or cost per terabyte or whatever it's so much less and what are things our technology can do i mean you're looking at now where the capability of an iphone to shoot video they're doing commercials with that. Consider Photoshop work. 

Well now on I know on my Android I can click something and get rid of it out of a photo with one touch And that used to take sometimes hours in Photoshop to get rid of so the advancement of the capability of what these things can do Is unbelievable and now I'm not even going to get on the topic of AI But you introduce AI to everything and it's just it's kind of hard to fathom 

But you know the biggest thing as we were talking about is just that consumer behavior and the access, I think, to products and services… if you want to call it the throwaway society where, you know, because of technology being able to produce things at a much lower cost, at a much more rapid pace, you know, the consumption practice has shifted quite a bit. 

So, technology has impacted everything at every level and last episode I mentioned marketing technology 10,000. I mean, that's just the top 10,000 platforms in marketing technology that didn't exist 20 or 25 years ago. So it's pretty hard to conceive. But well, let's move on because I don't think anybody needs a longer lesson from us on technology. Everybody knows it. They all get it.

Lorraine Kessler
Technology, it's good.

Mark Vandegrift
Yeah, it's good. Keep it up. We like it. We're not bemoaning the fact that things have changed, but it's still a tool. It doesn't replace a strategy. 

Let's tackle one or one more of our categories today. We have some time for that. That's the advanced targeting and personalization capabilities. And you touched on this last time in the media prolifer, I can't say that… media proliferation, topic in the sense that we don't just have network TV anymore. We have very segmented media. And I think that allows us to have this advanced targeting, and I add the word personalization on it, because of just technology. So it's like the media and the technology combined together give us this capability around targeting and personalization. So I'll let you kick this one off, Lorraine.

Lorraine Kessler
Yeah, and you know, I'm a little bit skeptical about media targeting and personalization and what it promises and its role that it plays. I'm not against it. I think it has a role. I think the problem is, and it's the same thing happened when social media came out, right? Unpaid social media. It's just the overuse. I mean, it's the new thing. Everybody gloms onto it. They overuse it. They think it's a panacea for everything and of course advertisers love it because their notion is it costs them less. And in fact, I could argue that it costs them more. And in fact, I think the Wizard of Ads makes that very point in the episodes we have with him and I think he's exactly right. So, you know I'm a skeptical of it for a couple reasons too because you can't target demographically. Demographically is to say well we're going to reach all baby boomers as if all baby boomers think alike. They don't.

Demographics describe things like age and income and household and where you live. That's not the way to target. If you're going to target, and I think personalization is a better word, Mark, it's about what people value. So, when you target people's values, like the drink of a new generation for Pepsi, it's a psychology, it's a psychological targeting. Guess what? That bubbles up in all sorts of demos. In fact, I think boomers are their biggest demo.

So, psychology comes first. What do people really care a lot about? Not where do they live in these kind of data numbers. So, on the surface, targeting makes a lot of sense, right? Because even on the logical brain, which is at the left side of the brain, and yeah. So, you can tell I'm right brain. But you can tell. You can tell.

So those who think very logically, and I can make this argument, is that, hey, if I could tell you, Mark, I can remove from your media buy every prospect who would be a zero return. Like if you knew in advance that person would never buy your product and wouldn't care about it, wouldn't that be great? The problem is that targeting hasn't really delivered on that because it's based on assumptions. And those assumptions allow for some faulty assumptions. 

For example, I've told you this before, I only stream, but I'm cheap. So, I don't pay for the premium on a lot of the channels. So, I get the ads. If I see another Farmer's Dog ad, I'm literally, I think I'm going to slit my wrist. Why? Because I know this is what they're looking at the data points. I love all those videos about dogs on Facebook, right? I always click on them and watch them. I have a dog, I buy dog stuff in abundance. I'm the right income level. So they think I would be the one who would really want to buy this premium farmer's dog. I will never buy their product. 

So, I know this is the result of targeting. It sounds good on paper, but it sometimes is faulty. So, my personal opinion is don't overuse anything. Think strategically and balanced. Balance the targeting with broad band brand, mass brand advertising. Why? Because if I reach all of Canton, Ohio, on Farmer's Dog, you might think that's wasteful, but guess what? 20 of those people know someone who would be really interested in that product and they're going to influence them. So, we are reaching those inside champions that Roy Williams talks about, right? And I think that's, we... That works like word of mouth, that works like referral, that's huge. So, I think that you can't confuse targeting with brand building, you need both. You need both reach, which is brand building and goes for the long-term gain, and you need targeting if you're really trying to create some short-term sales traction. And of course, that's important because sometimes companies starting out need revenue to support brand building.

So, it's not all about targeting. Interestingly, and I will share this with the audience, I'm going to read this for a minute. There was a study done by IPA DataMine titled, Marketing Effectiveness in a Digital Era. And I think you posted this in the screenshot on the wizard interviews we did. But their conclusions from the study, I think, are eye-opening and something every agency should kind of share with their creative and media departments. 

One, it's not all about targeting; broad reach communication still play an important role. That's the brand building long value gain. Focus on effectiveness, long term growth and profit, not just efficiency, response rates, and ROI, which is the measures that too often become the holy grail. They should not be the holy grail. It should be long term growth and profit.

Brands still matter; balance short-term activation with long-term brand building. And they recommend a 60-40 rule. I think that's a good starting point, depending on the objective, right? As we said, you always have to start with disqual de gille, what is the essence of the problem. Actually, human nature hasn't changed. Emotions still have a massive influence on our decision-making. So, use them, only reach.

Brand building contains the emotional content that you need to persuade people to buy something. So that's super important. Mass media are not dead. Balance online and offline. They work in synergy, each making the other work harder. And we knew that, we did our own study and we did that with, who was it we did that with? Was it MSN? Where we, yes, where we combined and we showed that when this media is combined, that's where you get the highest spike.

And so, beware of short-termism. We need long data, not just big data. I thought that was huge. Long data, not just big data. Yeah, I think this is great balance education and every media and creative department should kind of have this in their vest pocket if people wear vests.

Mark Vandegrift
Absolutely. And when you think about targeting on the positive side, I think about the things we've been able to do with some of our B2B clients, where instead of calling up a network TV and saying, we're going to run a TV spot where 95% of the people really could never be a customer of theirs, we're able to use things like Connected TV where we can target them based on title and industry, so maybe the waste goes down significantly, right? 

It's more expensive, but when you look at the numbers and you do the math, their capability of being able to run a TV spot that maybe they weren't able to do before, that is something that's a benefit. That doesn't mean they shouldn't be doing other brand building things, and TV is a brand building mechanism, but that is a nice convenience to be able to say you know, maybe I want the oil industry and I want only CEOs. Well, you're not going to get that purely, but it's going to be pretty approximate that it makes that spend worthwhile. And we've seen that with clients where they benefited from it. 

On the personalization side. I think we all like the fact like even affinity cards, right? Affinity card means when I get coupons in the mail, they should be applicable to the things I'm buying. Now that being said, I don't know that any corporation has ever done a great job of that. I use Giant Eagle as an example where we used to get cat coupons all the time for cat mix and everything. And I'm highly allergic to cats. Wouldn't buy cats, cat-anything to save my life because I'm very allergic. So that's an example where the capability is there, but are we taking advantage of it? And that's more around the personalization.

Lorraine Kessler
Yes. But even think about that, that is transactional. That's a transactional… I mean, you have to first be a giant Eagle brand loyalist. And now you're getting these offers which create sales and build loyalty. But the original thing is that and I never want to forget something Bob Hoffman said, you know, the great ad contrarian. Fame. Fame is number one. Every brand needs to achieve fame, whether it's with a very select audience because they only sell cranes or whatever, but fame trumps everything in the long run. And so I, and then, and positioning kind of falls under that because it's what am I famous for? First I have to be famous, what's my name? And then why would I buy you? But they kind of relate. It's hard to put one and two, but fame I think is.

Mark Vandegrift
Well, the change that we've seen, so we're talking about change over the last 50 years, certainly this is all available, but the question is, has the change itself caused a problem in the way that marketing happens. In our opinion would be, to a certain extent? Like you're saying, 60-40 rule on brand versus transactional media, and most people are jumping to 100% transactional and they forget the brand marketing in total.

And we'll talk about that in a later topic where we go through our categories. But the fact is, is there's been significant change on this targeting capability, the personalization capability. The problem, as we would state it, is change isn't good for change’s sake. And that we still need to follow basic principles of marketing that have been around for well over a hundred years. 

So, I think Lorraine, we got through two topics today, two categories of our changes. We have four or five left to go. So, I think we'll end up with a few more than two episodes on how things have changed the last 50 years. But hopefully our listeners appreciate going through this because it gives us perspective. And perspective is always important from a 50,000-foot view or if you're down in the weeds view, you always need perspective of one or the other. So, I hope our audience is enjoying this walk down memory lane. I certainly am, especially when I call up old stories about being a stripper, but just a big thank you.

Lorraine Kessler
We used to have a teacher in seventh grade who was an unmarried older lady, very attractive, but she was a little strange. She was very tight. And you remember the days when you had film strips? And she would show a film strip, but she would call them strip films. And she never understood why the class would just uproariously break out.

She gets so angry, you know, she's by her chair, but we're like, you know. It's going to be a bad strip film. You're talking to seventh grade boys.

Mark Vandegrift
Well, thank you to our listeners for joining us today. If you haven't liked, shared, subscribed, or told your friends about the brand Shorthand, please do so. And until next time, have an amazing day.