Marketing iconoclast Bob Hoffman: Advertising's 'lost decade' now moving into dangerous territory; why industry conferences are 'bullshit'
Check out the podcast with the infamous ad contrarian below:
Mark Ritson calls him one of our "truly great marketing iconoclasts". Professor Byron Sharp says “I wish I was brave enough to be this rude”, and NY-based ID Comms CEO Tom Denford predicts Bob Hoffman will possibly be "the most influential person of the decade in media".
Hoffman is certainly no shrinking violet. But then, unlike other agency CEOs, he’s retired. “They can’t all be pricks like me,” he says. “I don’t care, I don’t have a job.”
It also makes him a go-to guy on the conference circuit. Or did, in the old world, when people still went to conferences. But Hoffman now bites even that hand. Most line ups, he says, were full of people talking about the future “which can’t be fact checked. So they bullshit about the future, take their cheque and go home”.
Before becoming a professional contrarian, Hoffman was chairman/CEO of an independent agency in the US, Hoffman/Lewis, for 22 years. He even has an Australian connection: In the late eighties he spent three years as CEO of Mojo USA, which may still mean something to older readers.
Unsurprisingly then, Hoffman thinks the ad industry would be better off without the big holding companies, which he describes as “Wall Street wise guys”. He also thinks marketers are as at least as guilty as agencies in wasting billions of dollars through ageism. And he suggests a collective naivety is to blame for 20 years of “bullshit” during which digital media has failed to deliver a single major brand growth story.
Suffice to say, Hoffman’s not social media’s biggest fan. But as well as killing off creativity while hoovering up all the dollars, he thinks surveillance marketing is now moving the industry into dangerous territory. It will not end well, he warns.
And that was before the pandemic and global recession expected to ride its coattails. So it's no bombshell that Bob Hoffman’s prognosis for the ad industry post-Covid is less than rosy.
“I wouldn’t be surprised if when all of this is over, 30% of people lose their jobs.”
A bleak outlook. But Hoffman thinks the industry is suffering more serious underlying health problems – and despite repeated warnings, probably won’t don the mask, wash its hands, or take its medicine.
“Anyone one who says ‘yes and no’, who says ‘definitely and definitely not’, who says ‘this will work and this will not’, is full of shit, because they don’t know. Understanding that we are dealing with likelihoods and probabilities is one of the deep insights that marketing people need to get.”
Naivety is causing all sorts of problems
Hoffman has written five books. His latest argues that the ad industry has gone backwards over the last decade and that a collective loss of scepticism is the underlying issue.
Advertising and marketers, he argues, have been suckered. New digital tools “were sure to make advertising more timely, relevant and likeable. And it all turned out to be bullshit. The truth is that advertising has got far worse and consumers hold us in lower regard than ever before”.
With peak advertising bodies flagging corruption - “billions of dollars are being stolen from marketers”, he says - and regulators around the world starting to crack down on surveillance marketing, “the advertising and marketing world is lost in space right now,” says Hoffman. “We are delusional. We need to get back to reality and start seeing the world as it really is, not how we would like it to be.”
Questioning perceived wisdom would be a good start, he suggests, especially around tech.
“The ad industry used to be the most sceptical in the world. Yet all of a sudden the tech and digital people came riding into town with a load of baloney and we just pulled up our skirts. We bought all of this without saying, ‘yeah? prove it’. How many billions a year are being spent without proof?” asks Hoffman.
“There is so much bullshit and nobody challenges it.”
“It is very hard to explain to people who have been taught and groomed by logic that they need to put their logic aside sometimes. An ad is not a court case. The brands that are successful do not have a better court case than the brands that are not as successful; it is not about that.”
Take the hangover and move on
Hoffman accepts there is a role for personalisation and tech - that brands have to deliver on customer experience and walk the walk, while the advertising does the talking. “But it shouldn’t be driving the bus,” he says.
The industry, he suggests, has been indiscriminate in its thirst for validation.
“We are like a sailor that has been at sea for two years who comes into port and immediately gets drunk and a sexually transmitted disease. Tech came along and we wanted all of it,” says Hoffman.
“We weren’t discerning in what was real and what was bullshit. Of course we want information. You have to have information to make the decisions, no question we need that. But data and tech is not what is going to make advertising what it should be.”
Hoffman is sympathetic to why marketers have sought digital validation. But he suggests they are not going to grow brands that way.
“It is very hard to explain to people who have been taught and groomed by logic that they need to put their logic aside sometimes. When you talk to senior business people, they have been successful because they have been good logicians. They know cause and effect and they apply logic to all problems,” says Hoffman.
“But advertising does not work that way. An ad is not a court case. The brands that are successful do not have a better court case than the brands that are not as successful; it is not about that.
“In my career I have had to stand up in front of boards, financial people and CEOs and try to explain to them why this is a good idea, even though it is not logical, and it is very hard to explain that to those kind of people.
“I understand that. They want to know why. But if you are a good marketer, you find someone who you trust, whose creative instincts you trust, someone who has worked in advertising who has been successful, who has a feel for what works and doesn’t work,” Hoffman suggests. “That is more important than all the logic in the world when it comes to advertising.”
Precision guessing is as good as it gets
Hoffman thinks the best data in the world can only ever help deliver ‘precision guessing’. Marketers, he says, should accept that fact – and back creativity to deliver the growth and results that they need.
“That is what we do, we pretend to we know a lot of things that we don’t really know. What we are really doing is precision guessing – and as close as we can get is likelihoods and probabilities. Anyone one who says ‘yes and no’, who says ‘definitely and definitely not’, who says ‘this will work and this will not’, is full of shit, because they don’t know,” says Hoffman.
“The best we can do is say ‘this is more likely to be successful than that; this has a higher probability of motivating somebody than that does’, and that is the way it works. We like to pretend we know, we like to pretend we are experts. But we don’t know. Understanding that we are dealing with likelihoods and probabilities is one of the deep insights that marketing people need to get.”
“We know what happens when governments have too much information about people. We have seen what happened behind the Iron Curtain. There is way too much intrusion into our private lives by the marketing industry that is unnecessary – and probably not nearly as productive as we have been led to believe that it is.”
Adland is moving into dangerous territory
In his latest book, Hoffman suggests advertising is moving deeper into dangerous territory. The surveillance economy, he predicts, will not end well.
“Advertising was always a little annoying, but we have become dangerous. You remember what happened in the 2016 election in the US. The amount of information that is being collected about us without our informed consent is unconscionable,” says Hoffman.
History, he says, offers cautionary tales aplenty.
“We know what happens when governments have too much information about people. We have seen what happened behind the Iron Curtain. We saw what happened with Nazism. When governments know everything you are doing, everyone you are talking to, everyone you are seeing, there is nothing but trouble.
“Now we have the marketing industry knowing that. We have never had that before, this is unprecedented. We don’t know where this leads. But I have a very hard time believing it leads any place good. There is way too much intrusion into our private lives by the marketing industry that is unnecessary – and probably not nearly as productive as we have been led to believe that it is.”
“Where are the Nikes, the Pepsis, the Budweisers, the McDonald’s that have been built by online advertising? They are just not there. Why have there not been hugely successful brands that have been built online? We have had digital advertising now for 20 years. Where are the Cokes?”
Social media is for small brands
Hoffman questions the flight of ad dollars to the likes of Facebook and the fascination with digital marketing more broadly.
He accepts social media can help small brands to get bigger – but only up to a point, and he says the rise of Facebook as an advertising vehicle proves its original premise, the one everyone fell for, was a confidence trick.
“We need to get back to first principles. Social media was supposed to replace advertising. It was supposed to be about sharing, conversations, people talking with their friends enthusiastically about brands … that, to a substantial degree, was supposed to replace advertising,” says Hoffman. “That was a complete fantasy.”
“What we now call social media marketing is traditional paid advertising. It is not conversations. It is not sharing of brand enthusiasms. Facebook was supposed to replace advertising. Facebook is now the largest repository of that it was supposed to replace. It is a paid advertising machine. It is not about social media marketing. It is traditional paid advertising riding on a social media platform.”
Yet despite now taking the lion’s share of dollars, Hoffman claims online advertising has failed to build a single big brand since the turn of the millennium.
“Where are the Nikes, the Pepsis, the Coca-Colas, the Budweisers, the McDonald’s that have been built by online advertising? They are just not there.”
Mi3 suggests the Dollar Shave Club is an example of a brand successfully growing to scale through social and digital media.
“Yes, there are some mid-level brands that have done a good job doing online advertising,” Hoffman replies. “But for the most part there is a big question, and that is: Why have there not been hugely successful brands that have been built [online]? We have had digital advertising now for 20 years. Where are the Cokes?”
“Writers and artists reach their peak in their forties, fifties and sixties. But we in the advertising business throw those people away. The ad industry is throwing away billions of dollars by ignoring the most valuable group of people on the planet, the over fifties. Brands are probably at least as blind to this as the advertising people.”
Ageism: Brands and agencies are complicit
While digital advertising may be into its third decade despite delivering questionable results, those genuinely helping to build brands are unlikely to last that long.
“In Hollywood, the most awarded people are mostly over fifty,” and it’s the same with Nobel and Pulitzer prize winners, says Hoffman.
“Writers and artists reach their peak in their forties, fifties and sixties. In literature and art, most of the best work done by mature people. But we in the advertising business throw those people away. As soon as they reach forty-five or fifty, they are gone.
“That is terribly harmful, because more than half of all stuff, more than half of consumer spending, is done by people over fifty. Creative people have no idea when they are writing ads for people fifty-five years old… When you are twenty-eight, you have no idea what their life is like.
“As a result, I think the ad industry is throwing away billions of dollars by ignoring the most valuable group of people on the planet, the over fifties.”
Brands and marketers, says Hoffman, are complicit.
“Brands are probably at least as blind to this as the advertising people. The marketing people all think they have to advertise to people 18-34. Those people have zero money. They are not buying anywhere near the level of people over fifty, but they are the default target for any brand in the world.”
“The best thing that can happen to the agency business is that the holding companies fall apart and we have an industry of entrepreneurs rather than an industry of Wall Street wise guys. That would solve a lot of our problems.”
So what are the fixes?
Hoffman is not backwards in pointing out the problems. Can he also offer some solutions?
“There are answers – the problem is that the answers will never happen, or there is a very low probability that they will happen,” he suggests.
“The best thing that can happen to the agency business is that the holding companies fall apart and we have an industry of entrepreneurs rather than an industry of Wall Street wise guys. That would solve a lot of our problems.
“Another problem to be solved is tracking. We need to stop supporting the idea that tracking is a healthy thing for either our society, for us as brands, or for individuals. It has to be stopped.
“The third thing is that we need to reinvigorate the importance of creativity in what we do. We have spent so much time on data, technology and mathematics, and we have spent so little on improving the quality of what we are doing creatively,” says Hoffman.
“That means hiring really talented, creative people and letting them do what they are good at.”
So what does great creativity look like?
“Here’s how I describe it: good advertising appeals to us as consumers. Great advertising appeals to us as human beings, and that is what we need; advertising that is not just a bunch of facts, a bunch of insights about buying behaviour.
“We need advertising that makes us feel good about ourselves and the world that is entertaining, that is beautiful, that is interesting, that is funny,” suggests Hoffman.
“We all know it is hard to describe what we mean by creativity,” he says.
“But we all know it when we see it.”