Ian Portsmouth: Welcome to the Business Coach Podcast, an advice-oriented series that tackles the top issues and opportunities facing Canada’s small businesses. I’m your host, Ian Portsmouth, the editor of Profit Magazine and we’ve developed this podcast in cooperation with BMO, Bank of Montreal.
It was Philadelphia Department Store magnet John Wanamaker famously said “Half the money I spent on advertising is wasted. The trouble is, I don’t know which half”. If you are an entrepreneur who has at least dipped the toe into the advertising waters, you probably share Wanamaker’s sentiment. But as the owner of a small business, you can’t afford to waste half of anything. And that’s why I am thrilled to introduce today’s guest of the Business Coach Podcast, Terry O’Reilly. Terry is the co-founder of Toronto-based Pirate Radio and Television, an award winning advertising creative agency. He is also the host of The Age of Persuasion, the fascinating CBC Radio One Series that explores marketing history, trends and strategy. His book of the same name was published in October of 2009 by Random House Canada and Terry joins me today to discuss how small businesses can maximize their marketing ROI. Terry, thanks for inviting the Business Coach Podcast into your studio here at Pirate Radio.
Terry O’Rilley:It’s great to have you hear Ian.
Ian Portsmouth: I am interested in the subtitle of your new book, the Age of Persuasion, and the subtitle is, How Marketing Ate Our Culture. What do you mean by that?
Terry O’Rilley:Well, I don’t think there has been a time in our history whether there has ever been more ads than there is now. There are ads in golf holes, there are ads on Nasa rockets, there are ads on food, meaning eggs and eggs cartons, there are ads on sidewalks, ads in urinals, there is even ads on condoms, if you can believe that now. There are ads in churches, there are ads in schools. So because advertising is so ubiquitous, it is probably the biggest cultural force that we wrestle with as a culture. That’s what the title means, that we’ve kind of hit this breaking point of persuasion all around you no matter where you go. Even there is a number we cited in the book that most people are probably exposed to, on the low end, 300 messages a day, on the high end, 3000 messages a day. And I did a little experiment one morning, I counted the number of commercial impressions I was exposed to between 6 am when I get up and 9 am when I walk into the office, just that little increment of time. And I did all the things I usually do, you know, I listen to the radio while I shave, I flip to the newspaper when I have breakfast, I get in my car and listen to the radio, I pass billboard and bus shelters and all the usual things when going to work. So in that small increment of time, before my day really starts, remember I stopped counting at 9 am, but the total ad count was 99. So that gives you a sense of how incredibly pervasive and all encompassing and all surrounding advertising is.
Ian Portsmouth: So what comes to mind good or bad when I say the age of small business persuasion?
Terry O’Rilley:Well, I think small business is always challenged when it comes to marketing because the budgets are not there. And it’s so expensive to advertise. There is no inexpensive advertising. Because there is always two sides to advertising, there is the cost of production of an ad and there is the cost to run the ad. I think small business needs to be incredibly smart. They have to outsmart because they can’t outspend, even if their competitors or other small businesses or in most cases, their competitors are larger businesses, I think they have to really craft a really smart strategy and that strategy for me, and I always tell our clients, because 80% of our clients are advertising agencies and the other 20% of small feisty entrepreneurs who don’t have agencies. So they are all mostly small businesses. But I always say to our clients is go after the greatest area of opportunity. Because I think the biggest problem small business makes when marketing is they go after too wide a swath, they try to go after everybody, what happens is their marketing budget is a mile wide and inch deep as opposed to¦ So in other words, let me give you another scenario. Instead of going after all businessmen 25 to 49 that might use your product or service, I say, where is the sweet spot. So the sweet spot may be businessmen working in the financial sector 25 to 35. Now you’ve got a much smaller area to go after which suddenly makes it more focussed and makes it more achievable and makes it more affordable. And you can probably¦ it’s that 80-20 rule, you probably get 80% of your business from 20% of your clients. So find out where is that 20% that will give you the most return.
Ian Portsmouth: How do you think small business should use advertising as a tool? A hammer is for hitting nails, a screwdriver is for turning screws, what is advertising good in small business context?
Terry O’Rilley:Advertising brings several things to a business. It isn’t the obvious when one wish to sell goods. You want to attract people to your store or your service to sell products but on the other hand too, I think every ad is a branding ad. And that’s always a big debate. Many people or many small businesses don’t really want to spend money on branding but I think branding is really important because it really defines your company. It tells the general public what you stand for and what you believe in. And I think that adds value to your proposition and I think if there is no value there, people will only judge you on price. And then once you’re only judged on price, then it is a race to the bottom. If you’re just having a price war with your competitor, it is just going to get lower, lower, lower and you are going to have no margin and you’re training your customer to buy on price. And I just think that’s wrong. I think you want to train your customers to buy on value. Here is what my product cost. But here is what I bring to it, here is my knowledge, here is my skill set, here is my history, here is why it works better than something else. Once you add all those intangibles to a product, the price becomes a lot more insignificant to people.
Ian Portsmouth: That’s certainly a common mistake for businesses of all size. They want to compete on price rather than on value proposition. What are some of the other common mistakes small businesses tend to make in your experience?
Terry O’Rilley:I think that they go too safe on their advertising. I am a big big believer, I mean, our whole radio show Mike and I put together, if you scraped everything away, our incessant mantra is “It’s all about creative advertising, it’s all about big ideas”. So I think small businesses should really embrace a big idea in their advertising. Like zig when everybody else is zagging. And you can never just¦ a great ad never just tells you what the product is. A great ad is really about the benefit. You mentioned earlier, hammers and nails, I always say to the clients, you know, you don’t sell ¾ inch drill bits, you sell ¾ inch holes. So you always have to sell the benefit. Many small businesses that maybe are incredibly knowledgeable or savvy about marketing, they become so enamoured with their own product that they forget that they are selling the benefit of it. So you have to sell the benefit of a product but you have to do that in such a way that the marketing is unique and the marketing makes people stop in their tracks. And it has to be a story. All brands are long wonderful stories, it isn’t just hard sell facts and price and item, it should be a great story about your product. Every communication with your target market should be a great story.
Ian Portsmouth: And that is certainly something that as somebody who runs a creative agency, you’ve probably encountered too many business executives and business owners who wanted to play it safe, who resisted creative ideas, who fell very uncomfortable with the direction that you might have been taking and campaigned. So what advice would you give to those people out there who might feel uncomfortable when an agency comes back to them with a concept that doesn’t suit their taste or that they feel a little bit uncomfortable with? And then my second question is, I would like you to expand on the notion which I heard in one of your great episodes of the Age of Persuasion, that advertising is essentially a contract between the listener or the viewer and the seller.
Terry O’Rilley:When approving an ad, I always say a couple of things. Number 1, if it is a fresh idea, it should make your palm sweat a little bit. You should get a little drop of sweat back here that makes you a little nervous. That’s the sign always that you are looking at a fresh idea. In order to make sure that the idea isn’t too hair brained or too¦ or wrong conceptually, then you should immediately go back to the strategy, because you’ll have crafted a strategy that you gave to your agency to work from. So when they come back with an idea, judge that idea immediately against the strategy. Does it deliver the strategy? If the answer is yes, then you’re half way there. The next question to ask is, does it tonally feel like my company? Because every company has a tone. In other words, even if you look at GM cars, every GM car within the GM family has a tone. Cadillac has a very different tone than a Malibu or a Camaro. They all have their just¦ their little tonalities. So and nobody knows the tonality of a business better than the business owner. It is in his or her DNA. So if it’s on strategy, the next question to ask is, is it tonally us and then even tonally, give that a lead way, push it a little beyond what you’re comfortable with. And if the answer is yes to both of those questions, that’s probably a very good ad. If you can approve it in a second without thinking about it, you’ve probably got safe ad in front of you. If it doesn’t make you just tense up a little bit, it is probably not a fresh big idea. So that’s my criteria for, I always say to people on how to judge a piece of work. Because it is very hard to approve work. The agency has probably lived with it for 2 weeks and you have to make an approval on it in 45 minutes. It’s a very very though seat to be in. The second part to your question is Mike and I really do believe that there is a great unwritten contract between advertisers and the public that was forged probably back in the 1920’s when radio first appeared. Because what happened then was advertising agencies saw this wonderful new medium called radio and they realized that in order to put ads in there, they needed programming. So advertising agencies created these incredible radio shows that were so entertaining that, and you see pictures of this in old books and that entire families would gather around radios in their living rooms every night the way we do around television now. But the unwritten contract was this. Advertising agencies basically said, we will give you great programming in return for you sitting through our ads. That’s the deal. And you know what, it was a really really good deal. And that contract has lasted to this day. So radio ads on radio underwrite all the great talk or music you love, or ads on television underwrite the Sopranos, or Dexter or Mad Man or whatever, The Apprentice. Magazines is the same, newspapers is the same way. Telemarketing? No. Telemarketing in our opinion breaks the contract. That’s why people are so hot and heavy about telemarketing. They despise it because it doesn’t give them anything back. It just takes. It interrupts your dinner, it just wants to take money from you, it doesn’t give anything back. Spam, the same thing, it doesn’t give you anything back. Whenever advertisers break the contract, it ratchets up the annoyance of advertising in the public’ eyes. So we say, if you break it, every time you break the contract as advertisers, you give all of advertising a black eye.
Ian Portsmouth: So I guess the lesson there is when you are using other forms of marketing, you have to deliver some sort of immediate value whether, if you are doing a direct marketing campaign, you have to have a coupon or some sort of free offer with it, right?
Terry O’Rilley:No, that’s exactly right, give the public something in return for being exposed to your ad. The very minimum Ian for us, the very minimum you can do is make the ad entertaining. That’s the smallest thing, that should be motherhood, that shouldn’t even have to be said out loud. But beyond that, there should be something else attached.
Ian Portsmouth: Now a lot of B to B or Business to Business advertising is pretty earnest and there is nothing entertaining about it at all. Is there no place earnestness in advertising?
Terry O’Rilley:I think you can be earnest as long as you are interesting. I think, I gave a little speech a while ago and I tried to give the most mundane title possible because I was trying to be ironic and the title is basically, The importance of being interesting. I think you can be earnest because earnest is a great quality. As long as you what you are saying is interesting, it jus has to be an interesting take on the product or the service or the benefit or what it can do for you. Make me look at your product or service in a new way. That’s fundamental. I don’t care if it is a business to business or business to consumer, I don’t care. You have to make me look at you in a new way. Make me re-evaluate you. For example, there was a great ad done by Rethink in Vancouver recently, their client is 3M and they make unbreakable glass and you know, you think, okay, what kind of an ad can I do from breakable glass. You can do a lot of pity lines, a lot of clever lines, but here is what they did. They took a bus shelter downtown and they put $10,000 in between the glass on both sides of the bus shelter. And just put 3M unbreakable glass, that was it. And just left it there on the street. And that too me was such a huge idea because people just, double take¦ you just could not stare at it, all that money sitting between glasses in a bus shelter. It was an interesting idea, it made you re-evaluate 3M. They didn’t have to say anything else but put their money in there. It was just one of ¦ it was a really simple great idea. It was interesting.
Ian Portsmouth: Now you got your writing radio creative in Burlington Ontario. Now you’re a successful business owner, a successful entrepreneur. A lot of entrepreneurs out there aren’t going to turn into great radio creative copy writers. So they are going to have to work with an agency. What is your best advice for small business owners who are looking for an agency, because this is something they really don’t know a lot about?
Terry O’Rilley:I would say meet with 2 or 3 agencies. Ask to see their work. Really what it all comes down to is a chemistry contest I think. I think you want to find people that you have chemistry with, that you want to spend time with, that you instantly feel they understand your business. Because almost all agency is going to have a great realm of work. Throughout the years, you’re going to be able to cobble together a pretty good realm. So I think you want to know a couple of things. How do I feel sitting in a room with them? Are they asking me the right questions? Do I feel like I want to spend the next 5 years in meetings like this with these people? Ask them about their strategic jobs. Because sometimes, that’s not apparent when you look at a realm, you’re just seeing all the creativity of it. But ask, when they develop strategy, tell me about your process. Because, I think there is enough creative people in the world and we need way more great strategists in the world of marketing. That’s where I think we’re really lacking is great strategists. So, ask them how they develop strategy, what their process is. And then after that, then I think you just need to make up your mind, your instinct will tell you immediately who’s right.
Ian Portsmouth: Great advice Terry. Thank you for joining the Business Coach Podcast.
Terry O’Rilley:My pleasure.
Ian Portsmouth: Terry O’Rilley is a co-founder of Toronto-based Pirate Radio and Television, co-author of The Age of Persuasion and host of the CBC Radio One Series by the same name. If you would like to listen, visit cbc.ca/ageofpersuasion to find when it airs or simply listen to the episodes archived online.
That’s it for another episode of the Business Coach Podcast. Be sure to check out other episodes, which you can download from BMO.com, profitguide.com and iTunes. If you have any comments or suggestions about the podcast, then please send them to me at email@example.com.
Until next time, I’m Ian Portsmouth, the editor of Profit Magazine, wishing you continued success.