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E-Myth Blog
Advertising is Not Marketing
When most people think of "marketing," they think of the glamorous, glossy world of advertising. It's a common misconception, but one that could spell doom for your business. To understand why, you have to first understand how advertising fits into The Seven Centers of Management Attention™ business success model. This model helps you see your business as an organized unit comprised of seven sub-systems. In The Seven Centers, advertising is part of the Lead Generation Center - not the Marketing Center.
Why? Because simply put: advertising is not marketing.
It's Easy to Waste Advertising Dollars
Think about all the hype surrounding Super Bowl television ads. People say that they are the best. But are they? Really?
About 100 million people watch the Super Bowl each year; it's one of the most popular American television events of the year. So let's say that your business is in the United States, and that your target market is comprised completely of US residents. If you advertised on the Super Bowl your ad would be seen by roughly a third of the US population. But the question is: how many of them are in your target market? Do the people in your target market even own a television? How many of them like sports? How many of them like football? How many of them watch the Super Bowl? How many of them actually watch the commercials during the Super Bowl? Would the cost of this ad really be worth it? How do you know?
That's the trick. You have to know something about your target market before you spend a dime on advertising. Imagine that you spent $2.6 million on a Super Bowl ad (that's how much a 30-second spot cost last year), only to find out that barely 10% of your target market watches the game. If you can afford to throw that kind of money at that small of a percentage, stop reading now and start pumping that cash into the economy!
The rest of you need to do your homework first.
The Power of Marketing
The truth is, not everyone is a customer for your products or services. What your business sells may be perfect for some people, but completely inappropriate for others...and just so-so for others. In The Seven Centers of Management Attention model, Marketing is about understanding your customers. It's the research and analysis of your customers that identifies who they are, where they are and why they buy from you.
And that's the key: you need to know your customers. You need to know the kind of customers you want to attract to your business. You need to understand the demographics of your target market: their age, gender, occupation, income, education, marital status, location, race, ethnicity, etc. And you need to understand the psychographics of your target market: their self-perceptions, personal values, environmental perceptions, behavioral perceptions, functional needs, purchase preferences, etc.
Do you know any of that about your most probable customers? If you don't, you need to find out before you spend a dime on lead generation activities.
Effective marketing depends on identifying the customers and prospective customers who will produce the best results for your business, and then focusing your marketing activities (including advertising) on them.
The more you accomplish in the Marketing Center (the more you know your customers) the less you will have to do in the Lead Generation Center (where advertising comes into play.) The more you accomplish in the Lead Generation Center, the less you will have to do in the Lead Conversion Center... See where this is going?
So when you get right down to it, how well you know your most probable customers can make or break your business. And that's why marketing is so important. A bit of research at the beginning of your sales cycle can save you time, money and headaches down the line.
Sun Tzu, a brilliant Chinese General, military strategist and author of The Art of War, is often quoted as saying: "Know thy self, know thy enemy. A thousand battles, a thousand victories." Well, I'd extend that to marketing: Know thy self, know thy market. A thousand lead generation activities, a thousand sales.
Need help with marketing? Join us November 13 & 14 in California for our Marketing Intensive Seminar with special guest Duct Tape Marketing found John Jantsch.
Further Reading
Comments
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wayde n. says:
Well, you USUALLY get it SO right! this is a surprise! Advertising IS a part of MARKETING. Marketing is a process which includes Strategy, Planning, and Execution. Strategy involves Analysis and Direction Setting. Planning involves Goal Setting, Activities Definition, and Plan Development. Execution is Review and Corrective Action on the plan. Advertising is one of the activities in the Plan and takes its place in proportion to its value with other activities like networking, websites, direct mail, email marketing, direct sales, telemarketing, and other possible marketing activities. The proportion of these activities used in the plan depend on the value realized versus the investment (marketing ROI) and this is revealed in the Analysis piece - where you determine how the target customer find out about your product or service and in what language to communicate that to the best emotional effect (to promote them to reach a buy decision). For more on this, see http://users.zoominternet.net/~bsolutions/index_files/Page747.htm
This is not counter to the emyth process - but complementary and fits well with the Innovate/Quantify/Orchestrate steps.
Regards,
Wayde Nelson
Submitted Oct 16, 2008 2:23 PM
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Paul K. says:
Perfect timing on this article for us. After being open for nearly a year and a half, we have our first demographic survey underway with our client base. I feel more empowered already by the early data. So far, the money we have spent on advertising has been in the right place - lucky for us. I'm excited to see the results from our survey continue to come in over the next few weeks. We are also re-structuring our new client intake form to gather some additional data that we haven't been collecting up to now.
Mountain Waves Healing Arts
Flagstaff, AZ
Submitted Oct 16, 2008 2:48 PM
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E-Myth Business Coach says:
Dear Wayde N.,
Thank you for your response, and I can tell you put some thought into the traditional definition of "marketing," and really did some research. That's great! But you need to read the article again. I think you may be missing the point, and are getting caught up in the semantics. Here at E-Myth, we use the word "marketing" to mean something a little bit different from the American Marketing Association (AMA) definition of "marketing," and we do this on purpose. At E-Myth we use the term to mean understanding who your customer is, why they buy, where they are located, and what your overall strategy is to meet the needs of those customers. That process is the foundational step you need to take before you can move on to advertising. The way we define "marketing" relates more to the "strategy" step as defined by the AMA. So, from the E-Myth perspective, marketing is not part of advertising. From our perspective, marketing is the first step--the strategy--that informs the sales and advertising activity, but is not the activity itself. I hope this article got you thinking about your customer FIRST. However you want to call that activity. Because unless you know your market, you'll just be throwing money away.
Submitted Oct 16, 2008 3:31 PM
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chris h. says:
This is right on the money. Take it from a guy that wasted way more money than I could afford to spend, on advertising that never generated any sales. My learning who my customers are, and more importantly, who they should be is the best information I have ever learned. To shoot in the dark with advertising could make the difference between success and failure.
Submitted Oct 16, 2008 4:30 PM
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Rosalind L. says:
Great information. I am wondering if Paul K would share with me what his demographic survey looks like - so it could be re-created for other businesses?
Submitted Oct 16, 2008 5:11 PM
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Tim P. says:
I have a wholesale business and often struggle with who my customer is. Are they End User who ultimately purchases the product or the Store that sells our product. We spend a lot of money focussing on the end user but unless Stores carry our products then there is a lot of wastage. Any ideas as this is really covered in Marketing information?
Submitted Oct 16, 2008 5:40 PM
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Johannes D. says:
The semantics apart, advertising is hugely overrated as a tool to gain customers. I often ask people: 'How many things in your entire life have you bought as a direct response to advertising?' Fact is we buy and sell stuff from vanilla listings (such as E-Bay or its print equivalents), but the glossy ads have limited pulling power. If you haven't millions to spend on advertising, you are wasting your money and should rather put your ingenuity at work on promoting your products and services. PR is where you win your market share, not advertising.
Submitted Oct 16, 2008 11:36 PM
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The Michael M. says:
Advertising is dead. Communication is key.
Educate Ambassadors. Grow Your Business.
Profit = Networking x Communication x Solutions
Enjoy your day!
Michael
Michael J. Maher, MBA
Ask me how to go from $0 to $40.1 MM in three years.
Love e-Myth.
Submitted Oct 17, 2008 12:55 PM
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E-Myth Business Coach says:
Dear Tim P.,
Yours is a great question! The answer is that it could be one, or it could be the other. Or perhaps, it's both. It depends on who you're making the promise to. Are you making a promise to the retailer that you can supply them with X number of your products reliably and on time, every time? If so, then that's something to consider, and you have to know something about those retailers you are doing business with so you can sell to them. If your promise is to the consumer who buys your product from the retailer, you need to know something about them. Be wary of the false dilemma (the tendency to frame issues as "either-or," ignoring other likely possibilities). Your product may need to appeal to different markets in different ways. Remember, you're practicing the skill of marketing. The more you do it, the better you get at it. Learn from your mistakes, and capitalize on your successes. Innovate, quantify, and orchestrate.
Submitted Oct 17, 2008 3:28 PM
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Hy H. says:
As a well-trained and experienced marketer who has now joined and believe in the online world, I too will say "you got it wrong" when you say 'advertising is not marketing'. And your response to Wayde N. makes it even worse.
What you're calling 'marketing' is just one small part of marketing and nothing more than fundamental market research, analysis and media planning. Of course you need to know who your customers are, where they live, what they do, what they watch, etc, etc, so that you can determine the best and most cost-efficient way to reach them - with what is hopefully a relevant and compelling message. If you don't do that, you're not a smart marketer. And though I appreciate your evangelical zeal, you deciding on your own to suddenly apply a different and limiting definition to what is 'marketing' doesn't make it right. Saying that marketing is just "the first step" and then listing advertising and sales as being different from marketing is ludicrous. Good marketing involves both the strategy and the execution, and I hate to tell you, but it also includes selling and advertising, and a host of other initiatives and media.
Lastly, and as any good marketer, would say - we don't need your article to tell us to 'think of the customer first'. That's what marketing has always been about.
Submitted Oct 22, 2008 11:05 AM
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Zachary C. says:
I think Hy H. is making E-Myth's point for them while disagreeing with them at the same time. They're both saying that you start with what your customer wants. E-Myth is saying that you should first know who your customers are, then you should look at your advertising systems, then your selling systems. Selling is marketing? O.K. sure, but then so is advertising, customer research, and so is client fulfillment. From Hy H.'s perspective, everything that deals with the customer is marketing. Fine. So what's your system? How are you quantifying how well each step works? You want to be a marketing company, know your clients. You want a turn-key system for EVERY aspect of your business, you come to E-Myth. Seems to me, that E-Myth really knows their market.
-Zack
Submitted Oct 22, 2008 4:46 PM
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Adena F. says:
In response to and for greater clarity on Hy H.'s comments, what you call advertising, E-Myth calls lead generation and what you call sales E-Myth refers to as client conversion. Getting really clear on the thinking and activities of each of these categories leverages our time, energy and money.Submitted Oct 23, 2008 11:49 AM
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Vi W. says:
I think that you have painted marketing into a box where it doesn't belong. Analytics, and measurement of advertising is only a part of marketing.
You are correct that for some businesses, advertising is not even necessary. Market positioning can be done more effectively through other means.
To me, marketing is the way you present your business to the world. Marketing includes branding, lead generation, lead conversion, advertising, and the measurement of all of these activities. Marketing also includes your choice of shirts for your staff to wear, the business cards that you have printed, your stationery. Marketing is shaping the way that your customers and potential customers see your business.
The methods of e-myth apply just as much to marketing as they do to the operational processes of your business. You need a cohesive vision of your company and a strategic direction before you can undertake any marketing activity effectively.
Onward ever upward!
Vi Wickam
President
Zello Partners
http://www.zello.us
Effective Online Marketing for BusinessSubmitted Oct 30, 2008 8:17 PM
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Brandon J. says:
Tim P. You need to know both you customer and you consumer. I work for a large company and we do extensive research on both our customers and consumers. Think about what your customers need and want and how to meet those needs. Then do the same for the consumer. BrandonSubmitted Nov 13, 2008 8:53 PM