A Bygone Era
In 2004, Chanel produced what is still the most expensive television commercial in history. The two-minute spot (see Exhibit A), directed by Baz Luhrmann and starring Nicole Kidman and Rodrigo Santoro, cost $33 million, and at this point, it’s unlikely that another brand will ever surpass it. Even Chrysler’s 2011 “Imported from Detroit” ad, the most expensive Super Bowl commercial of all time, cost only $12.4 million, and, more importantly, the dominant medium for advertising is no longer TV.
In fact, in 2016, advertising dollars spent on the internet eclipsed1 those spent on television for the first time, though the transition hasn’t been seamless. While performance marketing has thrived online, where every action can be measured and optimized, brand marketing has struggled to stay relevant. As a result, marketers are now starting to nurture a new kind of relationship between the brand and consumer—one that embraces social media and facilitates more meaningful engagement.
Performance marketing, which used to be called “direct response,” has been adapted to the digital world, where it can be tracked in real time. For example, instead of mailing a coupon to thousands of homes near a company’s flagship store, marketers today can target consumers who have already demonstrated purchase intent by using an opt-in email list segmented by location or by advertising on relevant search terms on Google. Because of the wealth of data available, they can clearly assess and optimize the actions that lead to greater revenue.
On the brand marketing side, the same kinds of ads that were popular on television (or, for that matter, print) have been copy and pasted onto the Internet as intrusive video commercials and banner, display, and social ads. Although these top-of-funnel activities have the same objective—to increase brand recognition and, ultimately, to build purchase intent—they haven’t been nearly as successful as they were in the golden days of TV and in print.