Optimism is such a nice thing to have. For starters, without it, there would be no Cubs fans. Also, as a state of mind, optimism is a market maker. Consumer optimism is a key economic indicator correlating with a growing GDP, not to mention being the entire business model for Las Vegas. (As you know, what happens there stays there…right alongside your former money.) And then there is heaven, the ultimate hedge against the ultimate downer.
So, yes. Optimism. Nice to have. But, like chocolate, 18-year-old Scotch and police power, it is best used in moderation. And like credit cards and house keys, it can come back to haunt you when misplaced.
You know Pickett’s Charge? Pickett was an optimist. So was the White Star Line, when it launched the Titanic. And Colgate, when it launched frozen dinners. And Virgin Galactic…well, you get the idea. And now you will get the occasion for this meditation: the news that the Advertiser Optimism Index is at the highest level in its seven-year history.
Someone needs to cut back on their Lexapro... What in the world could the respondents possibly be optimistic about?
Now, I grant that index was first measured in the teeth of the Great Recession. And with steady economic growth restored, the aforementioned consumer confidence is surging, which suggests more consumer spending, which –- due to the utterly idiotic budgeting convention pegging ad spend to sales -- suggests some budgets will open up. So there’s that. There’s also this:
Advertising* works. A century of evidence demonstrates that more advertising* tonnage in almost all cases yields increased sales. The return on investment varies based on the competitive set, overall market conditions and the quality of the advertising*, but don’t be out there impugning advertising* itself. Because advertising* totally, totally works.
*(When encountered by humans.)
When not encountered by humans, advertising does not lift sales, because it essentially does not exist. And every day further into the digital age, more and more would-be ads go unnoticed -- tens of billions of dollars worth of trees falling in the forest for no one to hear. They are spam filtered, AdblockPlussed, fast-forwarded through, aborted at pre-roll birth. They are unleashed into a parallel universe of fraud: bots, click farms, malware, masked URLs, white on white displays, incentivized views and other e-larceny. And they are deployed on the periphery of Web and mobile pages where, eye-tracking studies demonstrate, they are literally unregistered by viewers.
Oh, and all of these trends are increasing.
Yet the index, based on a survey of marketing and agency execs by the Perception Group, shows a +25 -- representing the margin of the percentage of execs predicting a lower spend and the percentage predicting a higher one. Cable TV, which is losing audience in clumps to over-the-top streamers, enjoyed an optimism index of +21. Broadcast TV, which is losing audience to everything, including Vine and pedicures, still rated a +6. Radio was a +3.
Nickelodeons, magic lantern shows and Vaudeville, I believe, were tied at +2.
Look, if this is optimism is warranted and the spending truly materializes, I suppose we should all be thrilled. We desperately need for our media to be funded. But might I be permitted to consult the Pessimism Index -- or as it is also known: history?
Market crashes -- from tulips to silver to dotcoms to real estate -- occur when confidence in market trajectory trumps the misgivings suggested by fundamentals. Stratospheric P/E ratios and $1000 tulip bulbs and a $300 million stake in Pets.com and unemployed chambermaids getting mortgage loans all were red flags of excessive exuberance over fundamentally insecure markets.
And how else to describe the advertising industry, in which half the ads go unseen, and most of the rest are viewed grudgingly?
I don’t know which to fear more: the possibility that the index is wrong, and the wobbling ad industry goes to its knees, or that the index is right, and brand shareholder money is squandered by the billions with no hope of an adequate return. If a rising economy does pad marketing budgets, the found money should be invested in channels that cultivate direct and ongoing connections with consumers -- not to the forest primeval.
Otherwise, we’re dealing not with optimism but delusion, like Glenn Beck or Napoleon in the waning days of his empire.
Hey! Let’s double down on NBC! Let’s invade Russia! What could possibly go wrong?