New moment of truth for the traditional approach

Impulse stimulus at the point of purchase threatens the classic role of agencies and big ad budgets. To survive, the industry’s brightest and best must wake up to the ‘first moment of truth’, argues David Wethey

Next week the Incorporated Society of British Advertisers, the Institute of Practitioners In Advertising (IPA) and Chartered Institute of Purchasing & Supply are launching their “managing profitable growth” initiative. The IPA made the running last year with its “value framework” crusade to alert the world that agencies are an endangered species, despite the value they add for clients. In parallel, the Marketing Society takes every opportunity to promote the efficacy of marketing. Nonetheless this issue of Marketing Week has news of several pitches and departing marketers. We should stop to ask ourselves why.

I’ll offer four – interlinked – reasons for this unhappy state of affairs/ the process by which marketing budgets are put together in many companies (let’s call it cut and paste) is woefully inadequate; companies find it difficult to move with the times, much less be proactive or anticipate change, as the marcoms budget is stuck in a groove; that difficulty leads to failure and short careers; and so marketers are hired and they call pitches. Pitches often fail for clients and agencies – sometimes because the problem and goals have been poorly defined, and sometimes because the issue was never one a pitch could solve. The agency business model, which used to depend on media spend rising, now requires clients to buy more hours from more agency staffers, whether they’re needed or not. This does nothing for the reputation of agencies; it also leads to further growth in the specialised agency sector, at the expense of beleaguered creative shops.

All of this is extremely tough on the client/agency relationship. I have a hunch that so much time is taken up with the issues outlined above that many of the brightest and best have failed to notice the swing from demand creation to purchase stimulus.

The “first moment of truth” (FMOT) is what Procter & Gamble calls the point of purchase. (The second is when you eat, drive or use the product.) The world’s biggest advertiser has substantially increased its spend at and near purchase points. Is this right? Is this a major trend? And, if it is, what does it mean for advertisers and agencies?

Have you ever been to Aldi? It’s a parallel universe: the shopping experience that proves we are all really impulse buyers. As you wander along aisles loaded with brands you’ve never heard of, the chains of awareness and intention to purchase fall away. You fill your trolley with strange products, with no guilt about being disloyal to the old favourites.

Our favourite outlet – the bar – is a high-impact zone for impulse buys. Yes, the well-known brands are there, but there’s always room for an unfamiliar bar call. The internet is another critical decision point for purchases. Interestingly, here the first and second moments of truth coincide, at least for the credit or debit card used to make the purchase. Last-minute stimuli abound, and the availability of constant price comparison is another interruption of the traditional AIDA (attention interest desire action) model.

I think I understand the problem traditional marketers have with FMOT (yet another acronym for us to get used to – say “effmot”). In order for the target consumer to buy our clients’ products, we have been brought up to believe that we need to start months – even years – ahead. Traditionally, we have not needed to worry too much about the final consummation. If everyone has done their job well, people will buy the product and sales will rise. Advertising works.

The FMOT focus threatens this comforting theory. What if brilliant FMOT makes a major difference? Do we simply view that as the final flourish of the master plan? Or is the truth more threatening and subversive? Do we need to rethink the purchase cycle and the role of marcoms? Should we start instead with SMOT and work backwards? Maybe we should give more credit to the Germans who brought us Aldi and their spoof brands, which we are perfectly happy to buy. German marketers, after all, have a lifetime commitment to sampling. It is impossible to go shopping in Germany without being tempted to try this brand or that as we approach the till.

Let’s think for a moment about agencies and their clients in this brave new FMOT world. Any changes needed? Any new thinking? The Aldi phenomenon, the bar experience and purchase by mouse provide overwhelming evidence that we need to rethink.

Many brands will still need “classical” advertising to promote what we might call FMOA (first moment of awareness) and FMOD (first moment of desire). But thousands more will call for what may well become the new orthodoxy of FMOT-inspired, back-to-front thinking.

Countless brands will respond to impulse stimulus at the decision point. And this 11th-hour activity is almost bound to produce a substantially greater return on investment. But it will only happen if clients and agencies are alive to the opportunity – and prepared to change the habits of a lifetime.