The Real Reason I Love Advertising

Tim Chermak: It was the first time I had ever read something or encountered this idea that I didn't have to apologize for being ambitious. When it's not in a strictly economic or business context, we don't hate on basketball players that show up to practice early and shoot free throws and stay late and shoot free throws because they're trying to get better than other people. They're trying to advance their basketball career. We don't hate on that. We salute that. We love that hustle and that hard work and that ambition of trying to get better and putting in the time. 

So yes, I absolutely think that we need to recover the drive to become more and become more valuable in life, so that you can make more money and afford to buy the things that you see advertised. I think that's absolutely a profoundly moral thing. It's not just morally neutral, it's morally heroic. Like advertising has said, it’s the fuel to capitalism's fire. 

Tim Chermak: This is the Platform Marketing Show, where we interview the most creative and ambitious real estate agents in the country, dissect their local marketing strategy, and get the behind-the-scenes scoop on how they're generating listing leads and warm referrals. We'll dive into the specifics of what marketing campaigns are working for them, how much they're spending on those campaigns, and figure out how they have perfected what we call the Platform Marketing strategy. 

This is your host, Tim Chermak. I'm the founder and CEO of Platform. I love marketing, and I talk too much. So let's dive in. 

Tim Chermak: I wanna discuss one of my favorite ads of all time. It's not as famous as some ads are, at least according to people who work in the ad industry. When you think of great ads, you typically think of like the Cadillac ad from 1915, “The Standard of the World,” and “The Penalty of Leadership.” Has anyone heard of that ad? “The Penalty of Leadership”? Okay. Got one nerd in here. 

It ran one time in the Saturday Evening Post in 1915. What happened was back then, most cars cost about $500. Ford had rolled out a vehicle that cost 500 bucks. Cadillac still sold for over $2,000. So they have a reputation today as being a premium vehicle, more expensive than a Chevy or a Ford, or a Toyota.They did back then, too.

And most vehicles at that time were four-cylinder vehicles. Then Packard came out with a six-cylinder vehicle, and everyone was like, that's what, five horses? Whatever it was. And so Cadillac says if we're gonna maintain our reputation as being the standard of the world, we're gonna come out with an eight-cylinder engine, and it's gonna kick everyone's ass, and everyone's gonna love us and buy Cadillacs and be willing to pay five times as much money for a Cadillac, right?

Tim Chermak: That didn't happen. It had tons of mechanical problems. Things were breaking down. Customers were complaining about the engineering reputation of Cadillac had been damaged, and people just didn't really trust the brand anymore. So they hired a consultant, Theodore MacManus, who's probably one of the greatest advertising geniuses most people have never heard of. And this is in a time where advertising started to shift towards full-page color ads. Advertising was becoming a thing in the first couple of decades of the 20th century.

And he did something very contrarian. He wrote an essay about the penalty of leadership. So you can go on Google, if you just Google “Penalty of Leadership,” you can read this essay, and basically, it’s an ad for Cadillac that never mentioned vehicles, never mentioned the engine, the eight-cylinder, none of that stuff. It just talked about the idea that if you are gonna make the decision that you're gonna be a leader, you will have haters. People will doubt you. You'll have to deal with self-doubt. You will have to deal with failure in a way that most people don't, who never take risks. 

And so it never even addressed the engineering failures and the customer service nightmare that was the V-eight engine that they rolled out. But it was about “What does it mean to be a leader?” And it implied that if you buy a Cadillac, you are a leader and you're okay with that risk because that's the type of person you are. It inspired Elvis so much that years later, it’s rumored that, apparently, he kept a framed copy of this ad, “The Penalty of Leadership,” at his home in Graceland.

Tim Chermak: I have a framed photo of this ad, too, because this is badass. You should all go Google it. I mean, honestly just do it right now. The rest of this speech is pretty boring, so you'll probably get more out of that, but it is a great ad that came out in 1915, so that's considered one of the best ads of all time.

So there's some really cool ads if you look across history. I mean, obviously, Apple's 1984 ad, which basically launched the Apple brand and only ever aired once. I don't have to tell you about that ad 'cause most people are aware of it or remember it. I don't because it came out seven years before I was even born, but I've seen it on YouTube.

So there's many famous ads, but none of those are my favorite. The one ad that I feel stands the test of time as the most influential ad of all time was launched on July 4th, 1776. The ad agency that produced this was called the “Continental Congress.” Kind of a lame name, not as cool as Droga5, or Wieden+Kennedy, or other cool ad agencies today. In fact, it kind of sounds like a 90’s grunge band that played at county fairs. The Continental Congress. Like one of those weirdo bands that combines a banjo and a violin with electric guitars, and they think they're creating some new sound. The Continental Congress. It almost sounds like they're trying to sound more important than they really are, and yet, even with a lame name, this ad agency produced one of the greatest ads of all time. 

The creative director was Thomas Jefferson. The ad was, let's say it together, “The Declaration of Independence.” And so I wanna argue that the Declaration of Independence was an ad because its purpose was persuasion. And so that's one thing I'll challenge you this afternoon, is to stop thinking about advertising as being synonymous with the word “annoying” and start thinking of advertising as anything whose stated purpose is persuasion.

Tim Chermak: For most of us, how do we define a millennial? “It's someone younger than me who's annoying.” And that doesn't matter if you're 75 or 35 or 18. A millennial is a general term for someone who is younger than you who is annoying. I wanna challenge you to think about advertising in a new way.

Advertising is just persuasion. 

A lot of us look at bad ads, or we've had experiences with bad ads. We skip ads on YouTube. We pay Netflix not to have to see ads. But really, I think we're opposed to bad ads, uninspiring ads, not advertising or persuasion itself. And that's an incredibly important distinction.

And so, going back to my favorite ad of all time, 250 years later, we forget that at the time of its writing, the colonies weren't even united in their belief that they could actually take on England and win. A Motion for Independence in the Continental Congress was actually made in June of that year, not July. But they realized several states still needed to be persuaded to sign it. So it wouldn't really be a powerful statement to the world if half the colonies weren't even interested in their own freedom. Again, I come back to “marketing is literally creating a market for what you want to sell.” 

The real goal of the Declaration of Independence wasn't giving a middle finger to the king, even if that's how we remember it. The real goal was persuading France to join us. The real goal was convincing the French that this was a winnable fight. It was persuasion. It was an advertisement. 

The problem with advertising is that it's when it's done really, really well, we stop calling it advertising. We begged the question, almost implying, “Well, that's an amazing piece of history, Tim, but that's not really advertising.” We insinuate that once something becomes more transformative and inspiring and stands the test of time, it cannot possibly have been something as materialistic and selfish as advertising. 

Obviously, this begs the question: if something is created with the purpose of inspiring or persuading, it is without a doubt advertising. So again, most people don't oppose advertising. They oppose bad advertising, and this is an important distinction. The Declaration of Independence reminds us that advertising is inherently optimistic. It invites us into a better future. 

Tim Chermak: Have you ever seen an ad that tried to convince you that by buying this product or buying this service, that your life will stay the same or get worse? No, even insurance doesn't do that, and insurance has to insure against a negative event. It's about making your life better so you can enjoy your life in the meantime, not worrying about what might happen. We take this for granted. 

Advertising is inherently optimistic. It's all about how your life could be better.

The timeless message of American advertising is that the pain of apathy and regret, and complacency is greater than the pain of investing in yourself, in taking risks and venturing beyond your comfort zone. Every day, we see products advertised that we can't afford, and to afford them, we need to become the type of person who can afford them.

That's the interesting thing about capitalism. You don't get more money by robbing people and taking their stuff. When an advertisement inspires you to want to buy something you currently cannot afford, the only reasonable route, and I use the word “reasonable” very intentionally there, okay? The only reasonable route to achieve that outcome is to become the best version of yourself.

You have to add more value to the world to get paid more, so that you can buy the things that you want that you saw advertised. Through this process - it's kind of a flywheel - advertising is not only an information system that lets us know about cool new products, it's also an agent of transformation. It inspires us to become the person we need to become to afford the life we want to live. That's not morally neutral; that's morally heroic. Advertising is the gasoline to capitalism's fire. That's why I think keeping score and running the rat race is a good thing. 

Tim Chermak: My grandpa is 95 years old. He still works 40 hours a week. He loves the rat race. He loves the creative challenge of work. Most Americans intuitively understand this, even if we're not very good at explaining it. I think one of the most tragic things happening in our culture today is the obsession with sheltering kids from the reality of the real world. I know that Isaac talked a lot about that this morning and it’s something I really believe in my company because I've hired a lot of young kids, many actually from Isaac's companies, Crash and Praxis.

There is such a thing in the real world as winning and losing. The real world keeps score because deep down we know that life is more enjoyable when you can actually enjoy your victories. Keeping score and being aware of our progress is inherently satisfying, even when it means sometimes you need to admit defeat.

We're happiest when we are striving towards something. Sheltering young people from that is robbing them of experiencing what I believe is the deepest, most meaningful emotion that can come in life is the joy of achievement. Advertising inspires us to achieve more, to buy more, to invest more. And we're deluding ourselves if we think this is a bad thing.

Really, what makes Americans, Americans is that we're almost allergic to settling down. We wanna make progress, damn it. We don't wanna live the same life 20 years from now that we're living today. That's why we blaze the Oregon Trail. A hundred years later, we got bored, so we decided to go to the moon.

Tim Chermak: Now, Elon Musk and other entrepreneurs are planning to take us to Mars. My friend Joe Quirk is launching companies that'll build floating cities on the ocean, even though land still seems to work pretty well, today. We are relentless as Americans in our pursuit for more. We are eternally discontent, and this discontent is largely fueled by the American culture of advertising. It's both in effect and a cause. 

Advertising can even be profitable. Sometimes we just assume that advertising is an expense on the income statement, where a company pays money to place an ad, and cash is flowing out of the business not into the business. But sometimes great ads are profitable in and of themselves, regardless of how much it boosts the sales of the products they're promoting.

Consider The Lego Movie. Most of us think the reason we signed up for Netflix or Hulu, or Amazon Prime is because we wanna skip the ads. “I hate commercials, that's why I love Netflix.” Right? But how would you explain then people paying $20 to see a two-hour infomercial? 

It's literally called The Lego Movie. 

If Nike came out with a movie and called it “The Nike Movie,” we'd all be like, okay, that's an ad, right? It's literally called The Lego Movie. If you think Super Bowl ads are expensive, I have some numbers on here. If you think Super Bowl ads are expensive, this ad had a budget of $60 million. But here's the interesting part: It created nearly $400 million in worldwide revenue at the box office. So Lego, which is a company in Denmark, I believe, created a net profit on this of a quarter billion dollars with an ad. $250 million of profit before they sold a single Lego from the movie. Just the success of the ad itself created $250 million, which is more money than most of us will make in our lifetime on an ad.

Tim Chermak: In other words, people don't just dislike advertising. They actually enjoy it. There's no better proof than the willingness to pay to consume great advertising. I saw it in theaters twice. That'd be like using your TiVo or whatever it's called now, to go rewind and watch commercials again, voluntarily and paying money to do that. 

So again, there's no better proof than the willingness to pay to consume an ad. And the ad worked too to generate more sales. I have here on the screen 15% - that's how much their sales went up in the year that this movie came out. They became the world's bestselling toy company, and they're still privately owned. What makes this even more interesting is that last number, 30%, that's their profit margin, and they're the best-selling toy company in the world. They literally make plastic colored bricks. There is nothing proprietary or super-scientific about that, and yet they have 30% profit margins as a private company. When you're good at telling stories, people will buy your stuff, and they'll pay you just to hear the story. 

When I was a kid growing up, some of my greatest memories were actually building Lego cities with my brother. It was one of the few times you could be as creative as you wanted to be with no constraints on your imagination. We almost never followed the rules and actually built the set that we bought. Each set came with instructions, but we ignored them, we built our own creations. This is because I think my childhood was before the age of the internet, and growing up before the internet, I think you have a different perspective on life.

I'm one of the last years of youth who remember growing up before the internet, even my younger sister who's only, let's see, six years younger than me, she doesn't really have any meaningful memories of what life was like before the internet. Because by the time she grew up, and she was reading and everything, we had a computer, we had internet in the house. She doesn't really remember what it was like growing up and not being able to just pull out a tablet computer or go on the internet and watch whatever, play whatever games. I do. 

If you were born before the year 1995 - I was - you still have memories of what life was like before the internet, before everyone was online all the time. Most of the people in this room, I'm guessing most were born before the year 1995. Katelyn, wherever you are, I know that you weren't. You were born in 2014 or something like that. If you were born before the year 1965, you may still have memories of what life was like before color television or even television itself.

Tim Chermak: But if you were born before the year 1925, that's when things get interesting. If you were born before the year 1925, you have access to almost 200 years of life experience because life didn't really change all that much. Between 1800 and 1925 to now, you have access to almost 200 years of life experience.

If you were born before the year 1925, you still remember what it was like before electricity. Before indoor plumbing, on a cold, winter night, going outside and using an outhouse because there wasn't running water with toilets, especially if you grew up in rural America. If you were born before the year 1925, you still remember riding around on horseback. You may have known someone who died from polio. Growing up before 1925 gives you a really unique perspective on human history, maybe more so than any other generation in all of human history, 'cause you have access to almost 200 years of life experience because of the rate of technological change that happened or didn't happen prior to that.

Have you ever thought about it like that? It's very interesting. My grandpa Ted and my grandma Audrey, he was born before the year 1925. He's still alive today, and the scope of progress that he's experienced in his lifetime blows my mind. He grew up in rural Minnesota, riding around on horseback, did not experience electricity until he went to the army during World War II, 'cause at home they didn't have it until he came back from Japan. And now someone who works for him at his company has a Tesla, which is a self-driving car. He was middle-aged when we went to the moon. His grandfather would've been of the age when we blazed the Oregon Trail, and in his lifetime, we went to the moon.

There was not that rate of progress from the year 1200 to 1400 or the year 400 to 700. In fact, during much of the Dark Ages, there was negative progress, and yet he's experienced all that in his lifetime. Let me see. Two summers ago, I went on a vacation with him to a lake cabin in Northern Minnesota, and one day for lunch, we were gonna grill some steaks. And one thing when you're born before the year 1925 is that you always control the grill. The steak is your domain, and I'm not allowed to touch it. And so he's grilling the stakes, and I'm just standing watching, there for emotional support more than anything.

And he gets up and walks away, and I said, “Grandpa, where are you going?” I'm thinking, maybe he's at that age where I need to remind him there are steaks on the grill and there's live fire there and someone should monitor it, ideally, not me. And he's like “Oh, no, it's fine,” and as he turns around, he pulls his iPhone out of his shirt pocket.

Also, when you're born before the year 1925, you carry your smartphone in your shirt pocket right here, and he pulls out his iPhone, and he has this twinkle in his eye. And he just looks at me, and he tells me that, “Oh no, it'll tell me when it's ready.” 

My 95-year-old grandfather downloaded an app on his iPhone that sends him a push notification when his steak is medium rare.

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