It's only been a couple of weeks, but "intuition" has already captivated the folks who report on corporate America. They've written feature stories about it; interviewed authors, academics, and practitioners to get their invariably positive opinion about it; and cited examples of companies that "followed their gut," throwing contrary research findings to the wind and going ahead with a decision to great success. Fast Company, for instance, the self-proclaimed chronicle of cutting-edge business practices, declared "Acting on Intuition" as the #1 trend that "will affect the way we work and live in 2005." The popularity of Malcolm Gladwell's best-selling book Blink, all about tapping the power of intuition and "thinking without thinking," adds more fuel to the fire.

Strangely, they report on intuition as if following it in a business situation was somehow new—as if the problem with business is really that people have been relying too heavily on research and logical decision-making processes and not paying enough attention to what that little voice inside their head was telling them to do. What alternative reality are they living in?

Of course, as our readers know well, companies have relied predominantly on intuition to make critical decisions for decades. If the company isn't growing, sales and profits are stagnant, what does your gut tell you about how to fix that? For most CEOs and CFOs, it says, "merge and acquire." For others it says, "shrink your way to greatness." Instead of taking the time to figure out how to get and keep customers, senior managers "practice spontaneity" (a favorite Gladwell term) and look for an easy solution. And what do most companies have to show for it? A weaker brand, an army of former employees, and unimproved competitive position.

Don't these guys remember the dot-coms? Just a few short years ago, these same reporters were vividly recounting the splendid failures of the dot-coms and the people who essentially bet billions on someone's hunch that consumers would buy pet food and supplies, drugs and personal care items, fashion, groceries, electronics, toys, and a whole bevy of other items on-line in droves. Based on their intuition that all they needed to so was make a big splash to build awareness, dot-coms tried all manner of expensive marketing tactics—skydivers, jumbo shrimp parties, Super Bowl ads, and more—to grab consumer attention. These firms exuded gut-instinct and what did it get them? A lot of notoriety as fabulous failures—the butt of many a corporate joke.

Within the practice of marketing, intuition-guided decision-making is by far the rule, not the exception. It isn't new; it's de rigueur. Brand managers routinely spend as little time as possible on critical decisions such as targeting and positioning. They think about who they feel the brand will/should appeal to and why it will, and that's that. They let their advertising agencies come up with an uninformative campaign that might win a grand prix at the Cannes advertising festival, but won't help move products and services. They guess at product and service configurations and pull a price out of a hat. The decisions "feel right," but there's little evidence that demonstrates they are—just look at the ROI of most marketing programs.

In fact, the new drive for accountability in marketing is a direct result of the over-reliance on intuition to make decisions today. Marketers in rapidly increasing numbers have to justify why they made a decision and point to hard reasons and results. "It feels right," isn't going to fly in the board room or with other key stakeholders, no matter what a business magazine, show, or best-selling book might tell you.

It's our guess that for every company that introduced a failed marketing program or new product because of an over reliance on consumer research, there are at least 1000 that failed because they put their faith in intuition and ignored research. The calendar may have turned, but depending on their intuition to guide decisions will still not improve performance.

In an article offering thoughts on 2004 and predictions for advertising in the year ahead, The Wall Street Journal offered this insight: "If marketers learned one key point over the past year, it is that reaching consumers by traditional means—TV, magazines, and newspapers—is getting harder." The Economist echoed The Journal's sentiments:

The advertising industry is passing through one of the most disorienting periods in its history. This is due to a combination of long-term changes, such as the growing diversity of media, and the arrival of new technologies, notably the internet. Consumers have become better informed than ever before, with the result that some of the traditional methods of advertising and marketing simply no longer work.

These statements certainly capture the mentality of many marketers who have just plain lost confidence in traditional media, particularly TV advertising. CEOs and CFOs are demanding accountability while CMOs and their brand managers have little to offer. Either they have no data to demonstrate the ROI of traditional investments or the data they have suggests a negligible, if not negative, return. So they pull the plug on traditional communications tools and race toward alternatives about which, unfortunately, they know even less.

Faster than you can say "non-traditional media," marketers are moving dollars out of conventional marketing investments into alternative communications vehicles. An improved ROI and more effective marketing performance, however, is not guaranteed by non-traditional media. In fact, non-traditional media can produce results which are just as disappointing as those currently associated with the traditional :30-second spot.

Take the case of the sponsors of the 2004 Summer Games. Twelve companies including Coke, John Hancock, Kodak, McDonald's, Visa, and Xerox reportedly paid upwards of $50 million each for the rights to bear the Olympic rings and call themselves an official sponsor in their advertising (which they purchased separately) before, during, and after the games. Data suggests, however, that the target audience for the sponsors did not associate the desirable attributes of the Olympics—fitness, health, sportsmanship, world cooperation, to name a few—with the sponsors' brands.

According to an NOP World study on the effectiveness of Olympic advertising, when subjects were asked if they could name any official Olympic sponsors, no brand was top of mind. Only one in three consumers could name a single one, and McDonald's fared best at 10%. Meanwhile on an aided basis, more than half recalled Nike as a sponsor, tying for second place in aided recall with Visa. The amazing (frustrating, if you were a sponsor) thing is Nike wasn't even a sponsor! Not exactly the kind of performance results a company that just shelled out $50 million would want to see.

Unfortunately for marketers, there isn't a model that can optimize a media plan that includes both traditional and non-traditional media—at least not yet. At the very least, there are tools available that can help evaluate different non-traditional media within the same category. For instance, using a combination of cutting-edge computer-aided analytical techniques, optimization modeling, and simulated test marketing, marketers can use what we call "sponsorship engineering" to build the most profitable plan with the most effective sponsorships and events for a specific brand and for specific buyer targets. The better engineering processes we've worked with expose study participants to different sponsorship configurations in a competitive context and use a battery of measures to capture the likely effects on consumer behavior and, ultimately, ROI.

Instead of dooming non-traditional media to the same kind of poor ROI that is characteristic of many forms of traditional media today, marketers would be wise to keep abreast of and use the latest marketing science-enabled tools to guide decisions and achieve top performance levels.

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The news about Vioxx, Celebrex, and questions about their previously unreported potential to increase the risk of cardiovascular problems couldn't have come at a worse time in the brief history of direct-to-consumer advertising. Already the most recent tracking data we know of shows that consumer response to DTC advertising is in decline. Ipsos PharmTrends, for instance, found that even after pharmaceutical firms spent $3+ billion dollars on DTC advertising, only 19 percent—that's two in 10 consumers—reported that it inspired them to call or visit their doctor to talk about the prescription drug advertised and this number has steadily declined since hitting a "peak" of 25 percent three years ago. Only one in 10 consumers in the Ipsos study reported they asked their doctor for the prescription drug advertised. More disturbingly, Copernicus Marketing Consulting and Research discovered equally low response and compliances rates specifically among sufferers—the primary target audience for prescription drugs.

The Vioxx/Celebrex controversy coupled with the well-publicized withdrawal of Viagra ads that failed to mention side-effects likely has consumers more predisposed than ever to ignore ads from pharmaceutical firms, so that the task of penetrating consumer consciousness will be even more daunting. But while it may be down, don't count DTC advertising out yet —it can be saved.

Back in the day when the Federal Trade Commission first approved advertising prescription drugs directly to consumers and few pharmaceutical firms had taken the plunge, DTC advertisers could get away with executions that offered little in the way of a compelling reason to sufferers to call or visit a physician to ask for a prescription. In the early days, there wasn't as much pressure to position a brand as distinctive and uniquely preferable over alternatives and competitors. Yet herein lies a serious problem with today's DTC advertising—a leading culprit behind the declines in response rate and disappointing performance.

Working with Dr. David Lloyd, co-author of Uncover the Hidden Power of Television Programming and a respected advertising researcher, we selected a random sample of 21 DTC television advertising from daytime and primetime and a mix of treatment categories, and analyzed the content of the spots for brand name mentions, messages to motivate physician contact, and evidence of a clear, distinct positioning. While all of spots got the brand name across, 85 percent either offered symptomology (i.e., "if you suffer from these symptoms, call your doctor") as the reason to contact the doctor or nothing at all.

That's right, some spots, likely intended as so-called "reminders," provided no information whatsoever about benefits or even what purpose the drug served (i.e., it treats allergy symptoms). We believe this is done to eliminate the need for the fair balance (i.e., side effects) message. To avoid the requirement for a fair balance message in a DTC ad, a marketer can either (1) discuss the conditions/symptoms and treatment but NOT list a specific brand name OR (2) mention the brand name but NOT the conditions it's for. We just hope those that choose to follow option #2 aren't under the mistaken impression that brand awareness=sales. It certainly helps to have people aware of your brand, but just ask Coke—one of the most recognized brands in the world—about this logic. There are few people who haven't heard of Coke, but the company's market share has sagged in recent years.

Now in the absence of any other branded competition, you might be able to get away with advertising focused solely on symptomology as the call-to-action. Most branded prescription drugs, however, either have or soon will have significant competition that will also claim to relieve the same symptoms—it's the price of entry in the category. Promised relief from symptoms may get a sufferer to call the doctor, but it'll take something else—an added benefit, a differentiating feature, some compelling point of differentiation—that will spur the sufferer to ask for one brand name and not another. Can you imagine P&G relying on, "If your teeth are dirty, go buy Crest?" to get consumers to go the store and choose Crest over Colgate or Aquafresh?

Even more troubling, in our analysis just one ad—one—had a definitive positioning that offered a specific and logical reason why the brand was different and better than alternatives. Great that they got the brand name across, but if there's not a compelling and unique reason to contact a doctor and ask for a prescription for the advertised brand and not another, what's the point?

Without a clear positioning—the message a pharmaceutical company wants to imprint in the minds of sufferers and caregivers about its brand of prescription drug and how it differs from and offers something better than competitors—there isn't a reason to ask the doctor for a specific brand. There's no compelling reason to remember one brand as exclusively able to deliver a meaningful benefit. If DTC marketers want to get sufferers thinking, acting, and talking to doctors about their brands, they need to start with positioning.

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

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There's nothing like reading a "Big Picture" business trend book to get you thinking about the year ahead. That's why we're kicking off 2005 with a copy of World Out of Balance: Navigating Global Risks to Seize Competitive Advantage. In the book, the author Paul Laudicina identifies and analyzes five underlying factors he believes will shape the business environment in the near-future and, drawing on conversations with business leaders, academics, and government officials, offers insights and suggestions for companies to adapt and thrive.

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The 2005 AMA Strategic Marketing Conference, Six Sigma Marketing: Turning the Dream of Marketing Perfection into Reality, will feature the best ideas in the practice today. Leading authors, consultants, and practitioners including Jagdish Sheth and Rajendra Sisodia, authors of The Rule of Three: Surviving and Thriving in Competitive Markets; Michael Silverstein, author of Berry-AMA Book Prize winner Trading Up; Ed Keller, author of The Influentials; James Lenskold, author of Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability; Roland Rust, inventor of the Customer Equity Framework; and Copernicus' own Kevin Clancy.

The AMA conference will take place on May 9-11, 2005, at the Fairmont Hotel in downtown Chicago. Register early to reserve your spot at the conference today. Don't delay, the 2004 conference sold out quickly! For more information, visit: http://ecommerce.ama.org/strategic.htm

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