This former ad agency CEO says the ad industry has 3 major delusions holding it back
Hoffman has become known as the " Ad Contrarian ." He sold his firm in 2013 and since then the caustic, but funny ex-ad man has made a name for himself in critiquing the ad business.
Speaking at the Shift 2016 conference in London on Tuesday, he said that there are three major misconceptions clouding the industry: "All of these delusions have one thing in common: they take a little bit of truth and then they distort it and they exaggerate it and they torture it to the point at which it does our marketers more harm than good."
1. The brand delusionThe first mistake advertisers make is thinking that other people actually care about their brands.
"Creating a strong brand should be every marketer's primary objective and the highest role of advertising is to create a strong brand. But our industry has taken these truths and twisted them into silly fantasies," Hoffman said. "There's a widespread belief in our business that consumers are in love with brands. That consumers want to have brand experiences and brand relationships and be personally engaged with brands and read branded story telling."
One consequence of "all this baloney" is that the industry has spent almost 10 years and "billions of dollars exhorting people to join the conversation of our brands." But it's still unclear what that conversation is.
Hoffman continued: "People have shaky jobs and unstable families, they have illnesses, they have debts, they have washing machines that don't work, they have funny things growing on their backs, they have kids that are unhappy, they have a lot of things to care deeply about. It's very unwise to believe that they care deeply about our batteries, our wet wipes and our chicken strips."
2. The digital delusion
The next false belief that Hoffman says is damaging the ad industry is the over- exaggeration about the importance of digital.
He said: "As a result of all our reliance on digital technology, we have made a very incautious leap of logic. We have assumed that digital technology has made irrelevant everything that came before it. For over 10 years, we've been hearing about how a digital revolution was going to change everything. It was going to kill advertising, it was going to kill traditional marketing, it was going to kill everything in its path."
Hoffman then talked about ad fraud - the issue of marketers' money being wasted because online ads are being served to bots rather than people - and the other problems associated with display ads.
"Marketers are pouring more and more money into online advertising. They don't know what they're buying, they don't know who they're buying it from. They don't know what they're getting, they don't know how much they're paying. If there's a better definition of being on Mars, I'd like to hear what it is," he said.
3. The age delusion
The final problem Hoffman talked about was the "age delusion." He thinks the advertising industry is far too concerned with grabbing young people's attention, when, in reality, the most lucrative market is the over 50s.
"You know all the awesome millennials we see in car ads? In the US, people aged 75 to dead buy six times as many new cars as people aged 16 to 24." He asked: " Do you really think it's a good idea to avoid these people?"
Hoffman said: "According to [research company] Nielsen, people over 50 are the most valuable people in the history of marketing. In the US they are responsible for 50% of all consumer spending." He added: "People over 50 control about 70% of the wealth of the US ... And yet people over 50 are the target of 10% of marketing activity in the US."After selling his firm three years ago, Hoffman admits he started to have more time, so he looked into whether there was a good reason for the massive focus on young people.
After finishing this research, he explained his results: "I've come to believe that most marketers target young people because they see everyone else doing it. And they assume that somewhere someone must know why we are doing this."
Hoffman ended his presentation with the message: "The marketing industry has been spending too much time on another planet. We need to get back down to earth."