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How Advertising Works Now: Insights from Big’s New President

Big President Mark Ervin, left, with founder, chairman and CEO John Montgomery

Big, one of the leading Alabama-based advertising and public relations agencies, announced, on July 9, a change in its top leadership. John Montgomery, who founded the company in 1995, moved to chairman and CEO, to focus on business development.

Mark Ervin, chief strategy officer and partner, was promoted to president. He has been with the company since 2010.

Ervin gave Business Alabama insights recently into what companies should be shopping for in the current digital marketplace.

The two biggest changes in the last few years, says Ervin, are the migration to mobile devices and how data has changed the way media is purchased. Mobile usage has surpassed all other streams of communication, especially for younger people. “If you are not focused on their mobile device, you will not be able to reach them for the large part.”

As a function of mobile phones comes another big change: “People’s attention spans. You have six-second and 15-second commercials. Almost never 60 seconds. All are 30 seconds or shorter.”

A related phenomenon affecting advertising is multi-tasking.

“Usage has changed so much — people are watching TV and on a computer and on the phone simultaneously — you have to attend to the multiple ways and multiple streams your commercial will find to interact with them. You can’t fight the desire for multiple streams, and you have to use data to shape that. We look at the performance of the data streams we create. We tailor different messages in different places, and we seek to optimize the campaign based on that.

“When I started in advertising in 2000, I worked hard on one message in radio, outdoor, TV and print. Today, you have to be flexible enough to have a slightly different message for what is best in different streams, and then you can test a whole new set of variables.”

That analysis of the data is a new service of advertising companies, something called “reporting.”

“Five years ago nobody paid us for reporting. Clients with larger budgets are more and more asking for reporting. When you have so much data at your disposal, the more they can interact in this world. They are hungry for data. The larger they are, the more they are pushing us for data rather than our pushing them.”

Data analysis, he adds, is “also a matter of understanding the audience up front. You do the research up front, learning about what the audience believes about a brand, and that helps you optimize, to get real brand-specific for the needs of a customer.”
Is the audience more sophisticated and more skeptical of advertising?

“Absolutely,” says Ervin. “The audience is more aware of the advertising message than ever before, and what you have to figure out is how to do things that are less likely to feel like advertising. That’s why influencers are effective. You have to create things with your advertising that people will want to consume. Consumers are more savvy than ever. The sniff test of the younger audience is even stronger. You just have to look at the 2016 election cycle to validate the importance of the source of content. It elevated people’s doubts in a good way. You have to come up with smart, creative ways to add value, so that the audience doesn’t just run right by it.”

A more refined approach, says Ervin, is now required for some of the oldest aspects of advertising, such as branding.

“Most people think of a brand as that graphic identity or logo,” says Ervin. “But there are a lot of other elements in the relationship that results in how it makes you feel. There are a thousand other encodes beyond just the product on the shelf.”

Identifying those encodes takes research, and one of the best examples he has participated in, says Ervin, is the brand research his company did to promote Alabama seafood following the BP oil spill disaster.

“The Alabama Gulf Seafood project started with deep homework and insight that we learned from our partners with the Gulf and Atlantic Fisheries Foundation, to understand perceptions. We picked five markets and got to hear what consumers felt, from New York to LA to Birmingham. We spent time visiting the Gulf. We spoke with people whose relatives used to spend summers at Gulf Shores. You’d see such strong emotions tied to the seafood, so much more optimism about things getting back to normal, as they desperately wanted it to be so. Another insight was that they trusted the fishermen. Every single day, we’d hear and learn about the time they fished a red out of the Gulf to take home and feed the family. It was all the validation the consumers needed to trust that it was going to be OK: that the fishermen wouldn’t sell anything they wouldn’t feed their families first. That little nugget. In many ways we encoded that into the campaign. That has been around since 2012, and it still shows up. It was one of my favorite things to work on.”

Clients often come with definite plans they want executed from the start, says Ervin. But “if they come with an open book, we can bring all the tools to study and really understand what we know. That’s where we start, with research, understanding people and test and market and on the back end measure it and test it again.

“Client expectation now versus three or four years ago means that what we as an agency have to work harder and be better prepared and be constantly studying the landscape and what the trends are out there. And we also have to study our own work and not get stale and not get stuck on things that once worked.”

Red Square Grows with Tribal Casino Gaming Expertise

Red Square’s leadership team, left to right: Sarah Jones, president; Elena Freed, COO; Rich Sullivan, CEO, and Joa Pope, vice president of creative operations. Photo by Ty Shaw

Gambling in this country is wide open as a Vegas billboard, except for a few holdouts such as Alabama, where the only sure bet is the occasional failed plunge at a state lottery.

So it’s no small wonder that one of the most successful ad agencies working the national gaming circuit is headquartered in south Alabama, in Mobile.

“The gaming category has been a very good one for us, and we were early past the post on it,” says Rich Sullivan, CEO of Red Square advertising agency. “It allowed us to grow into a national agency and enabled us to do work outside of the category. And for us to be in the state of Alabama is especially unusual.”

Lodged in the Port City’s historic downtown, the colorful co-working spaces of this 75-employee ad agency contrast sharply with the staid, brick storefronts of St. Emanuel Street.

Red Square represents a constellation of Native American tribal casinos across the country, including the country’s largest tribe — The Cherokee Nation, in Oklahoma — and largest tribal casino — Foxwood, in Connecticut.

“We have been working in gaming close to 20 years, but we really began building steam 15 years ago,” says Sullivan. “We worked with the Poarch Creek Tribe before it became Wind Creek Hospitality. They were very instrumental in our growth.”

Headquartered in Atmore, in Escambia County, the Poarch Creek Tribe started gaming in 1985 in a 1,500-seat high-stakes bingo hall — the Creek Bingo Palace — on tribal land, one year after becoming the first federally recognized tribe in Alabama. Now doing business as Wind Creek Hospitality, the venture supports the welfare of the tribe with a spread of casinos that includes Atmore, Montgomery and Wetumpka in Alabama, Gardendale in Nevada, and the Caribbean islands of Aruba and Curaçao.

“When I was in college, tribal casino gambling was at the very beginning of that industry,” says Sullivan, who took charge of the agency in 2005, after the retirement of his father, Richard Sullivan, who helped found the agency in 1977.

“When I got to the agency, I thought that if we got some expertise we could differentiate ourselves and build the expertise in the category to grow,” says Sullivan. “Now gaming is an incredibly large industry that has grown across the country.”

Tribal gaming, the segment of the industry Red Square is most active in, grew in the same timeline as the agency to become a close contender to the older, commercial Las Vegas-type enterprise. According to the most recent (2018) State of the States report by the American Gaming Association, tribal gaming revenues hit a record $32.4 billion in 2017, compared to commercial gaming, which was $40 billion. And tribal casinos now operate in 28 states, compared with commercial casino gaming in 24 states.

Red Square’s concept team, left to right: Pat Reid, creative director; Casey Herman, designer; Tina Phanthapannha, activity-centered designer, and John Medzerian, ACD. Photo by Ty Shaw

Along with the gaming side of this industry comes a raft of other enterprises and the separate flood of marketing that goes with it.

“You can think of the gaming industry as a retail business, as well,” says Sullivan. “They have a lot of hotels and restaurants and music, the retail side, multi-amenity properties. You’re selling a lot of entertainment, an amenity-driven property within a property.

“Foxwoods, our client in Connecticut, they have 55 restaurants and bars. Think about all the marketing that goes on. You’ve got a lot of calendars to manage, shows to sell tickets to. They are really 24-hour-a-day retail advertising clients. That creates tremendous challenges in managing the logistics. In 2018 we completed more than 17,000 pieces of creative.”

Keeping track of that work is the responsibility of Joa Pope, Red Square vice president of creative operations, who recently came to the agency from the parks division of Disney in Orlando.

“A lot of the accounts are these large promotions for casino clients, across 30 different types of media channels, on the properties or their website,” says Pope.

“Casino work, by the nature of the market, is very quick turnaround and a fast-paced type partnership with clients. If the competition is going to run a cash promotion within a range of dollars and attract the same type clientele, you have to come to their defense.”

“In 2007 we had about 24 employees, and now 75, so it has more than doubled,” says Sarah Jones, Red Square president and head of account services. “On one specific occasion, with The Cherokee Nation, we took on a much larger piece of business, and we suddenly had to hire 22 people.

“That piece of business is still a client, and for us to become trusted partners helps us keep those longer relationships. Any client can hire a vendor. We want to be hired to partner, to share information about their business. Our best client relationships come out of our viewing ourselves as a partner and not just a vendor.”

“Because of our work in the gaming category, we are able to be incredibly selective about the work we do outside of the gaming category,” says COO Elena Freed, who, besides overseeing administration and human resources is also involved in business development. “The majority of the work we are going after outside of casino and hospitality tends to be highly strategic and often digital in nature. This work is getting noticed by bigger brands, which is making it easier to get meetings with large corporations across a variety of spaces.”

Red Square conference room. Photo by Patrick Chin

One of the most recent new clients is Cedars-Sinai, in Los Angeles, where Red Square has a project helping with social media.

Red Square also is currently doing projects for Hilton Worldwide, Nescafe Canada, New York Pride, Cartelligent in San Francisco, and Swell Creative Group in Los Angeles. Current project work also includes some leading Alabama names —Austal USA, CPSI, Hibbett Sports and the University of Alabama.

Sullivan says gaming clients currently represent about 60 percent of agency business but have been a foundation for nongaming growth and new geographic territory.

“When I got here, my goal was to build a national agency, and we’re well on our way. Gaming allowed us to grow.”

Gaming clients now include Rivers Casinos, headquartered in the Chicago area, with casinos near Chicago and in Pittsburgh and Philadelphia. Red Square recently opened an office in Chicago.

From L.A. to Chicago to Connecticut, by way of Mobile, Alabama: It may not be an obvious course for building a national advertising agency, but for Rich Sullivan and Red Square, it is proving to be a strategically sound one.

Chris McFadyen is editorial director of Business Alabama.

Auburn Marketing Expert Eyes Google Shopping Rollout

Dr. Brian Bourdeau

Questions from Auburn Communications (AU) are followed by some from Business Alabama (BA).

AU: Do you expect Google Shopping’s plan, which would allow customers to buy directly through Google, to be successful?

I wouldn’t bet against Google, but it’s going to be a big challenge. The retail behemoth that is Walmart has been trying to catch up with Amazon over the past few years and has had very little success. Therefore, I have to wonder if Google has the capacity to pull it off. They certainly have the capitol to invest in a new shopping platform. That said, when you have an organization like Amazon whose market share and brand equity is so dominant it’s going to be an uphill battle.

AU: How would Google Shopping affect media websites that offer links to products for sale?

The lucky ones will be absorbed by Google. The unlucky ones will have to hold on as long as they can and hope that Google decides the online shopper market is too saturated by Amazon and Walmart to make a sustained move into the space.

AU: Would the customer be affected?

Not really. There are typically two types of online shoppers. The first goes straight to Amazon and searches for the product they are looking for. The second goes straight to Google to search for information on the product they are looking for. Inevitably they both end up buying the product (or not) from one of the affiliate companies anyway.

AU: How could current websites, which offer ad links to products, compete with Google Shopping?

I doubt they’ll be able to due to the scale at which Google, Amazon and Walmart operate.

BA: What are these “third-party” websites?

By third-party websites we are talking about affiliate websites — people who have their own website or have links to Amazon or eBay, and they basically get a percentage of the sales. Amazon Associates and eBay Partner Network are two of the big ones that control their own affiliate marketing. ShareASale is one of the better affiliate websites. They just track what comes to your website and they go to Amazon or eBay or Google Shopping, and when a consumer makes a purchase — it doesn’t even have to be what they initially looked at — they get a percentage of the sale. I would foresee Google Shopping creating their own affiliate type of a program just like Amazon and eBay.

BA: How will this affect small manufacturers, craft makers, who mainly sell their goods on their own websites? One such, for example, that started in your area, in Opelika, is Loyal Stricklin, a high-end leather goods craft shop.

It depends on Google’s model, which we don’t know yet exactly what that will be. But I assume it will be similar to Amazon, a lot of things to buy that are not solely offered by Amazon, small retailers linked by Amazon. Those smaller companies may be fine and may even be helped by it. If you’re on Google you’re out there pushing for a bigger market place. And there will always be people who go directly to that retailer. People may just skip the big commerce websites and go straight to the manufacturer. So I don’t see a whole lot of negative in it for them.

BA: How will it affect small retail shops with that have their own websites as well, such as the popular dress shop, in Auburn, Behind the Glass?

Probably not to a great extent. Some recent research has shown that more than 80 percent of consumers actually opt to go to a physical store — including millennials and even younger people. They still want to go into a store and touch and feel the merchandise. And if they can reach more online, it’s probably a bonus for them.

BA: How has online shopping affected how marketing is taught at Auburn?

I don’t think we are changing too much how we are preparing students. Basically, it’s introducing them to some of the newer techniques that affiliate marketing introduces and what the effects that can have on a business. At the end of the day, a lot of the traditional marketing skills that we have taught for years are still holding true in this type of economy that we have.

BA: Some critics say that is unfair monopolistic activity for a giant like Google to leverage its enterprise into a new field. The European Union has imposed regulatory fines on Google, including fines on shopping activities.

I don’t know. The way I look at it, if Google gets into this space, it just adds more competition. They are coming in to compete with Amazon and Walmart and eBay. Amazon is the 300-pound gorilla, and Walmart is trying to compete and has not been that successful, and maybe Google can be and level the playing field some. I don’t know if Google can even pull this off. They’ve got plenty of money to give it a go, but if they do succeed, they will definitely have to link to some of these smaller retailers, as well as the big box stores.

Dr. Brian Bourdeau is an associate professor of marketing in Auburn University’s Harbert College of Business. His research has appeared in Strategic Management Journal, Journal of Service Research, Journal of Services Marketing, Journal of Non-Profit & Public Sector Marketing, International Journal of Sports Marketing and Sponsorship and International Review of Business Research Papers. He won Harbert College’s Excellence in Outreach Award in 2018.

Animals, Celebrities, Old Movie Trailers…What Works in Super Bowl Advertising

Dr. Linda Ferrell

With so many new communications platforms for marketers to use these days, does the Super Bowl ad still hold the same weight as it once did in terms of effectiveness and considering the large cost involved?

Ferrell: The Super Bowl is a massive cultural celebration. Whether you’re into sports or football, we love to get together with friends and enjoy the Super Bowl. Its effectiveness…it brings together colleagues, families and friends. Its viewership last year was over 103 million people in the U.S. The rate per 30-second ad is also a proxy for efficacy with this year’s Super Bowl charging a record $5.25 million ($1 million more than the 2014 Super Bowl).

The beauty is in the strategy for the ad. The very best ads get talked about, tweeted and discussed on morning shows and talk shows for days after the Super Bowl. Media outlets have “Ad Meters” where viewers can share their thoughts on best and worst ads. In addition, the very worst ads get traction and visibility. Your worst nightmare as a Super Bowl advertiser is to be in the middle and not be noticed or talked about. Your $5.25 million is well spent if you end up getting a lot of “free residual press.”

Often, it seems Super Bowl ads are focused on making the viewer laugh—hoping to provide a memorable “water cooler” moment. Does this method of marketing still work best, or should Super Bowl advertisers consider a different, more conscientious approach in such a day and age of political and societal turmoil?

Ferrell: The Super Bowl is a celebration with friends, family, food and frosty beverages. Social issue ads have to be handled very carefully to be successful. They must be very optimistic in their perspective and they are indeed, challenging for this broadcast. Nationwide ran an ad, “The Boy Who Didn’t Grow Up” in the Super Bowl a few years ago. The ad was highly controversial as it had a young boy stating that he “couldn’t grow up because he died in an accident.” The response was an “outrage” from the audience. Tweets started immediately: “Nationwide just ruined the Super Bowl.”; “Not cool, Nationwide. Not cool.”; “Nationwide Monday morning staff meeting is going to be a humdinger.”; and “Worst play in Super Bowl history #Nationwide #WhatWereYouThinking.”

This year we will see more ads featuring successful female celebrities and athletes including Serena Williams.

What trends are you seeing in advertising that we might look out for while watching this year’s Super Bowl?

Ferrell: Continuation of what marketing research knows that works in Super Bowl ads: Use animals, humor, celebrities, food (snack, frosty beverages, restaurant) and early movie trailers and promotion. Historically, movies that are promoted in the Super Bowl far exceed total box office receipts of those that are marketed more traditionally. Historically there have been eight to 10 movie trailers in the Super Bowl. This year there is expected to be three or four. The increasing cost of ads and declining box office revenue are contributing to this effect.

Dr. Linda Ferrell is professor and chair of the Department of Marketing in Auburn University’s Harbert College of Business. Her research interests include marketing ethics, ethics training and effectiveness, the legalization of business ethics as well as corporate social responsibility and sustainability. She has served as an account executive in advertising with McDonalds’ and Pizza Hut’s advertising agencies in Houston, Indianapolis and Philadelphia. She was recently honored as the Innovative Marketer of the Year by the Marketing Management Association.

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