Why the Old Spice Guy Campaign Flops
Was the "Old Spice Guy" campaign really successful? A lot of respected marketing and ad people had their doubts right from the beginning, and evidence is starting to emerge that the campaign's success may be as limp as a dead fish.
The arguments about it's success or failure centre around the age old divide in advertising and marketing about whether the purpose of an ad is to sell something or win creativity awards.
As far as the latter is concerned, there is no doubt that the ad is brilliantly creative and hugely entertaining, but did it actually boost sales of Old Spice?
The answer that seems to be emerging is: No.
Like all things in advertising there are a lot of smoke and mirrors involved as creative agencies and marketing managers try to put a positive spin on what could well turn out to be a marketing flop.
The problem is that coinciding with the launch of the new ad, Old Spice was running some very aggressive coupon offers. In some cases they were effectively paying consumers to take their product. (How good is that? It's better than free.) (Read AdAge for the full story.)
During the coupon campaign (and so during the video campaign) sales of Old Spice skyrocketed. But then it's obviously easy to shift product when you give it away via two for one offers and even a "spend $4 and get $8 back" offer.
With such ridiculous offers it's easy to make the number of shifted units look good, but obviously the campaign is costing you more than you're making.
Plus, when Old Spice dropped the coupon offers, sales dropped by over 30%
The whole campaign is turning into a text book case of what not to do in advertising and marketing.
There are so many problems with it, it's hard to know where to begin, but let's start with the coupons.
An Age Old Marketing Trick, With a Nasty Twist
Any marketing person worth their salt knows that coupons are a very effective response booster. They've been used offline for nearly a century, so their hardly a new concept. Unfortunately there are right ways and a wrong ways to use them.
Online companies like Groupon and a host of others have rediscovered that they are a great way to drive business.
But the whole purpose of the coupon is to get the customer to engage with you, try your product and hopefully if they like it become a long term, repeat customer.
That's how you make money.
Unfortunately, in Old Spice's case where they are offering you $8 of store credit if you purchase $4 of Old Spice just seems to totally have missed the point.
It's just there to get a quick boost in sales.
Such promotional promiscuity can only end in tears, which leads to the next point about the problem with discounts.
Discounts are a Social Media Transmitted Disease
Once you've caught it, it's almost impossible to get rid of, and it will eventually drive you insane.
Someone pointed out that offering discounts of any nature is training your customers to take bribes. and online customers get trained very quickly. As the term suggests, the whole campaign can go viral. Customers tell all their friends about the free offer and pretty soon you're overrun by customers who are just there for the discount.
This creates enormous problems for you, the business owner.
- Firstly you've cheapened the brand,
- Secondly you've obviously sacrificed profits for shifting units.
- Thirdly you're probably losing money,
- More importantly you're customers will no longer buy your product at the normal price. They will wait until a discount offer comes along, and if you don't offer one, they will actively hassle you until you do, or go somewhere else.
All of which is going to play hell with your sales figures, projections and profitability.
In that scenario you have to keep offering discounts just to maintain the sales volume, but if the discounts are losing you money you're permanently caught between the rock and a hard place.
What's the Alternative? An Apple a Day
Rather than paying your customers to take your product and giving away large volumes of inventory for free, there is a much healthier way to run your marketing. Take a leaf out of Apple's book.
You don't see Apple giving away its products, offering discounts or two for one deals. In fact Apple does exactly the opposite. Its products are even priced above the competition.
Apple, in fact, is doing all the things that text book marketing tells us we should do. And, surprise, surprise it works.
One of the key elements of Apple's marketing strategy is that it creates a sense of scarcity and urgency. The overnight ques to get the latest iPhone and iPad, the months long waiting lists, the running out of stock etc all create the sense of urgency and the fear in the consumers mind that if I don't get in quick I'll miss out.
Then the media picks up on it and the whole thing becomes self fulfilling. It's classic marketing, and Apple have been doing it for years.
Plus it means customers are willing to pay a premium for the product., which again perpetuates the perception of it being a quality, high value product.
Compare this to Old Spice where they are shoveling it out by the truckload.
Which leads to the next problem with the Old Spice Guy ad.
It's a Rolls Royce Campaign for a Daewoo Level Product
Let's be honest here, Old Spice is competing at the lower end of the men's smelly water market. It's a cheap product, almost a commodity. As such there is no way the experience of the product can ever live up to the fantasy of the campaign.
Plus the fact that it's so cheap also goes against the implied message of the ad. The customer has to wonder: "If this stuff is so great how come you're giving it away?"
It may create some initial jump due to curiosity or experimentation, but any rise in sales are likely to be a one off. People will buy it, try it and then leave it at the bottom of the vanity unit to be re gifted to some unsuspecting relative next Christmas, or used to emergency deodorize a room when the dog et something real bad and decided to share the aroma with the rest of the household.
And in any event, what is the ad actually selling?
What Are You Actually Selling?
When your celebrity or ad is more famous than your product, you know you're in trouble.
The whole Old Spice guy" campaign has been great for Isaiah Mustafa. Women are lusting after him the world over, the video has gone crazy viral, he has his own You Tube channel, his agent has probably upped his rate by tenfold or more and movie offers are pouring in.
Great for Isaiah, not so great for Old Spice. Everyone's talking about the "Old Spice guy" and not the product.
Isaiah's brand equity has gone through the roof.
So just what is the product here?
Isaiah is the product. We want more of him, not Old Spice. In fact we don't even care about Old Spice, just give us more Isaiah.
It's another classic marketing lesson: Know what you're really selling, and in case you don't know, just listen to you're customers.
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