In recent years, many companies have started looking at their advertising to see if TV and print advertising is dead, and digital is the new why to go. I would like to take that thought one step further, is advertising at large dead? To attack this, I think it is important to address the difference between advertising and marketing. The line between these two concepts has been blurred for decades, and the terms often used interchangeably. The American Marketing Association (AMA) as a great article that explains the difference. I think the root of the difference comes down to the idea of paid media, owned media, and earned media. Advertising falls within the paid media category. While marketing is more focused on the owned and earned media.
Getting what you paid for
While spending varies wildly across industries, the Gartner CMO Spend Survey 2018-2019 put the average marketing budget at 11.2% of revenue. This is up over 4% from 7.2% of revenue based on the 2017 Duke/AMA CMO survey. Even inside these two articles the terms marketing and advertising are used interchangeably. These numbers got me wonder, who is paying for all this advertising? In 2017, the top spender was Comcast at $5.75 billion spent on advertising. This just seems unnecessary to me. With the amount of earned media out there it has to be cheaper, and Elon Musk has proven my point.
The power of Earned media
Elon Musk’s Boring company, along with all of its consumer facing brands, is one of the most talked about companies. What is amazing, is Musk achieves this with virtually no marketing budget, and I don’t even know if I have seen a paid media ad for any of the brands. The commercials all come through owned media or trade shows. Everyone remembers him launching a Tesla into space, but he didn’t pay a dime on advertising for that. The launch was a test for his other brand, SpaceX. Instead of just having a bunch of Government regulators watching in a bunker, he let the whole world see it. I agree with what our guest speaker, Nicole Weltman, said about the use of embargoes. I think the Technoking of Tesla’s PR and marketing team work hand and hand to time the release of everything and take over the news cycle when they do anything. In fact, in 2019 Brand Total found that Tesla had a social media ad budget of $0 for 30 days (see Figure 1).
FIGURE 1 “Budget for Paid Media. Source: BrandTotal”
Advertising has its time and place. However, it should not be the center point of a campaign. Companies need to take a page out of Elon Musk’s book and start learning how to social media first. Mitch McCormick wrote an excellent article on what Musk does to be successful with a limited marketing budget. The key points I took away was to let the media do your marketing and shameless self-promotion (seriously is there an interviewer Musk hasn’t talked to?). It is time marketers stopped trying to transpose traditional marketing advertisement into a digital format, and start remaking digital marketing concepts for a new age, and new consumer.
- “Marketing vs. Advertising”, American Marketing Association, https://www.ama.org/pages/marketing-vs-advertising/, Accessed 15 February 2021.
- Santo, Alexander, “The ultimate list of marketing spend statistics for 2019 (infographic)”, Brafton, https://www.brafton.com/blog/content-marketing/the-ultimate-list-of-marketing-spend-statistics-for-2019-infographic/, February 20, 2019
- Moorman, Christine, “Marketing Budgets Vary by Industry”, The Wall Street Journal, https://deloitte.wsj.com/cmo/2017/01/24/who-has-the-biggest-marketing-budgets/, January 24, 2017.
- Patel, Neil, “Which U.S. Brands Are Spending the Most on Advertising?”, https://neilpatel.com/blog/top-ad-spenders/, access 15 February 2021
- SC, Juan, “How Elon Musk Created Tesla’s Zero Dollar Marketing Strategy: The Richest Man On Earth Is A Marketing Genius”, https://medium.com/datadriveninvestor/how-elon-musk-created-teslas-zero-dollar-marketing-strategy-babf3f3e6ad8, Jan 10, 2021.
- McCormick, Mitch, “Elon Musk’s 7 Rules of Marketing”, com, https://clicktribe.com.au/articles/elon-musks-7-rules-marketing/, January 31, 2018.