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The Curse of Advertising Resources


With more platforms, more products and more content who are trying to reach a disengaged audience, it is becoming harder and harder for brands to stand out. Conventional practices are no longer working. People don't watch TV as much as they used to, so they don't see commercials.  They don't click on banner ads. They don't pay attention to billboards ads. And they don't trust brands' messages. Part of the problem is that we are too dependent on traditional ad resources, which limits the realm of our creativity. To thrive in this new environment, we, ironically, need the freedom of a tight brief: what can you do with no budget for mass media?  Or limited marketing communications dollars? 
To make a comparison, traditional advertising is a lot like countries and economies that rely on oil. This reliance handicaps innovation. Countries with a vast amount of natural resources tend to have (1) less economic growth and (2) worse development rates than other countries that have fewer natural resources. There are a lot of things that contribute to this, but a glaring reason is that there isn't pressure on the country, its economy and its citizens to innovate. This is evident when you look at countries that don't have natural resources. Those countries are successful because their survival depends on innovation. Israel, Taiwan, Japan and Singapore are great examples of this; these countries rank among the most competitive nations in the world, despite the fact that they have no natural resources. 
We can apply these same principles to advertising. Brands with big ad budgets tend to play it safe and default to traditional ad methods (e.g., TV, Prints, banners).  But today, safe can kill you.  Startups with very limited or no advertising budgets, on the other hand, need to be creative to survive.  Their livelihood depends on looking for innovative ways to get people talking. Dropbox, Airbnb and Facebook marketing tactics, in the infancy of these companies, is a prime example of innovation. They used non-traditional methods of "growth hacking" such as referral, partnerships, and badges to increase reach and, ultimately, get attention. 
Did you know that Dropbox is worth $4 billion despite the fact that it's invested very little on advertising? What have they done that’s made their business so successful? Incentivized referrals. Referrals increased Dropbox signups by 60%.Dropbox makes it easy for users to tell one another about the product and, in some cases, gives users incentives to make referrals. For example, when a Dropbox user refers Dropbox to another person, both people, pending signup, get a 500MB increase. Dropbox also gives users a 125MB increase if they follow them on Twitter or like on Facebook.
In the early days, Airbnb was facing a problem on the supply and demand side. By integrating their service with Craigslist, a platform with million of users, Airbnb was able to gain reach and traction. If a property owner published a listing on Airbnb.com, the site would propose to publish it, with just one click, on Craigslist.com, which would then link back to the original listing.

Similarly, Facebook had some roadblocks when it first started: it wasn’t acquiring users as quickly as it had hoped and the goal to gain 200 million users in 12 months started to feel unrealistic. Facebook managed to accomplish this, however, with some growth-hacking techniques. The first hack was giving away embeddable badges and widgets that users could post on their websites and blogs, linking people back to their Facebook page. This change alone led to millions of signups.
Growth hacking is a mindset. You don't have to be a startup to think outside the box.  A good example is Virgin Airlines' safety video. They looked at something other airlines may overlook and saw an unprecedented opportunity to drive media exposure and customer engagement. They launched a competition that invited people to compete to appear in the next Virgin safety video. By doing so, they asked their customer community to co-create their content and infuse the brand with a sense of fun and exploration that makes Virgin and the travel experience all the more exciting.


Today, every big corporations are concerned about the nimble startups even though they have significantly less marketing dollars, people and resources. I think part of the big brands and companies' problem is their inherent dependency on traditional advertising resources. To break the cycle, we need to cut the addiction. This will force them to innovate, regardless of their size.  Make them think: how can I achieve growth with no mass media budget? Or limited marketing communication dollars?
Paradoxically,  ad agencies will be the biggest beneficiary of this change. It plays to their strength: creativity. Today, every big corporation can do almost anything in-house. But they still can't do creativity. Here lies both the opportunity and the challenge for the advertising industry. 

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