Wizard of Ads Monday Morning Memo

Every form of communication is composed of 12 basic ideas and each of these ideas, held singularly, is a separate channel of communication in the mind.Like a jet lifting off the runway, these 12 concepts will accelerate and elevate your creative expression: speaking, writing, drawing, painting, persuading, acting, photography, sculpting, selling, singing, landscaping, interior decorating, inventing, filmmaking, engineering, and making music.If I left out your favorite form of expression, just add it to the bottom of the list as you point the nose of your jet toward the sky.Everything can be explained using these 12 languages of the mind, and each of the 12 can be expounded and expanded by the others.Let us begin by defining a couple of terms.Perception: a conscious awareness of a sensation and interpretation of sensations.Communication: a successful transfer of perceptions to another person.The impact of your communication is determined by your mastery of these 12 languages:1. Numbers are a language of the mind.Math is easier to learn when you think of it as a language. There are things that can be communicated in the language of numbers that can be said in no other language.2. Color is a language of the mind.Look at a color wheel. Pink and burgundy agree with red, but that entire family of color is contradicted by green. Add white to a color and you get a tint. Add black and you get a shade. Add grey and you get a tone. Colors, tints, shades, and tones communicate moods and attitudes. Color can be saturated to intensify – or desaturated to drain – a feeling.3. Phonemes are a language of the mind.Every spoken language is made of a specific number of sounds, and alphabets are constructed to represent those sounds. English is composed of 44 phonemes. The vowels of a language are its musical notes.1  The “stops” in English are the sounds represented by p, b, d, t, k, g. (Make those sounds in your mind; not the names of the letters, but the sounds the letters represent.) There are also labial, dental, fricative, and palatal phonemes. Obstruent phonemes give words a hard-edged, angular feel, like “taketa.” Sonorant phonemes give words a softer, feminine feel, like “naluma.”4. Radiance is a language of the mind.Outward radiance is energy expanding. Inward radiance is energy contracting. Hot and cold. Love and indifference. Dark and light. Dim light and shadows are sonorant. Bright light is obstruent. Likewise, pianissimo-soft is sonorant. Forte-loud is obstruent.5. Shape is a language of the mind.Angles are the obstruent phonemes of shape. Curves are sonorant.6. Proximity is a language of the mind.It speaks of the relationship of one thing to another. Large and small. Here and there. Left and right. Up and down. High and low. Near and far. Ahead or behind. Backward or forward. Absent or present. Complete or incomplete. Perspective, or angle of view, is another expression of proximity. Brother, sister, father, mother, cousin, co-worker and boss are words that describe relationship, a proximity measured in a “distance” that cannot be expressed in inches, feet, or miles.27. Motion is a language of the mind.Fast and slow. Curved or angular (shapes of motion). Coming or going (proximity of motion.)8. Taste is a language of the mind.As a biological tool for identifying chemicals dissolved in liquids, the perceptions of the tongue give us a vocabulary that can easily be assigned to non-chemical perceptions, allowing flavor to be used as a metaphor for a wondrous number of other things. “She is a sweet girl, but her father is a bitter old man.”9. Smell is a language of the mind.Smell is a tool for identifying chemicals dissolved in air, so the perceptions of the nose provide us with another vocabulary that can easily be assigned to non-chemical perceptions. “The judge’s ruling in that case stinks like 9 day-old fish.”10. Feel is a language of the mind.Rough and smooth. Dry and wet. Painful and pleasant. Relaxed and tense. Outstretched and cramped. Extended and contracted. The words that describe skin and muscular sensations – pain, pressure, position, movement, and temperature – can be used to describe emotional states as well. Or anything else you want to aim them at.11. Symbol is a language of the mind.Symbols have specific meanings. Facial expressions and body language are symbols. A stop sign is a symbol. An exclamation point is a symbol. A smiley face is a symbol. Each letter of the alphabet is a symbol for a phoneme. And every ritual – communion, baptism, the dubbing of a knight by the king – is a symbol combined with motion, another language of the mind.12. Music is a language of the mind.Music is any sound that carries meaning. The sound of a jet. A dog’s bark. A slither in the grass. A baby’s cry. What we typically think of as music is composed of 1. Pitch (proximity: high and low), 2. Key (shape of sound), 3. Tempo (speed of motion), 4. Rhythm (shape of motion), 5. Musical Interval (proximity: near and far, how wide are the gaps between notes?), and 6. Musical Contour (shape of the melody line). The volume of music is an expression of its radiance. This is an example of what I meant when I said, “each of the 12 can be expounded and expanded by the others.”Perception is deepened when two or more languages agree, creating concept reinforcement. (Such as dim light combined with slow music in a minor key.) But too much agreement creates a cliche.Attention is elevated when a language disagrees and contradicts another, creating an interesting anomaly. (Such as a spotted cow that is hot pink and lime green) But too much disagreement creates confusion. (By the way, did you notice how “pink” was modified by radiance – hot – and “green” was modified by the symbol of a lime?) 3Today’s introduction to the 12 languages of the mind was not meant to be exhaustive or comprehensive. It was merely the cracking open of the door to a forgotten room, an invitation to explore an undiscovered country, a glimpse at the gleaming gold molars of a yawning dawn.Wasn’t that a colorful way to say, “the beginning of a brand new day?”Just playing.Roy H. Williams

“The deer have killed the oak tree! The deer have killed the oak tree!”Forty-year-old Todd – we’ll call him Todd – came running into my office with his second crisis of the day. I expected there would be at least one more.Todd felt it was his job to bring every problem to my attention so that I could tell him how to solve it. Todd was an idiot. His only value was that he gave me a sparkling example of what it means to be an identifier of problems rather than a creator of solutions.When you see a problem, should you bring it to the attention of your boss?Yes, but only if:1. You feel confident that your boss is not already aware of it.2. You have a solution in mind and are ready to suggest it.3. You are prepared to implement your solution if asked.You lower your value when you point out problems without offering to implement a solution.You elevate your value when you are willing to solve every problem you face.If you feel you have sufficient authority to implement your solution without having to get approval, then by all means do so.If you do not have sufficient authority, then articulate the problem along with your proposed solution in the fewest possible words. The less time and attention you require from your boss, the more highly your boss is going to think of you. Within a year or two, your boss will begin bringing you problems you didn’t even know about, along with a request that you solve them.When that day arrives, the only person that can get in your way is a family member of the boss, or some other person to whom the boss owes allegiance.Yes, nepotism is a real thing. It would be foolish to pretend otherwise.This brings up another important point:The key to failure is to hang on to the belief that things have to be “the way they ought to be.” The key to success is to be able to deal with things as they really are.Learn to deal with things as they are. Quit expecting things to be the way they ought to be. Unless, of course, you’re willing to dedicate your life to being a reformer. It’s a high calling, but a difficult one to monetize.I was lucky enough to have a mother who taught me these things when I was in my early teens.Without a high school diploma, she took an entry-level job at 32 years old when she became the breadwinner for our family. I was 11 at the time. Mom retired when she was 54, having been the director of every department of the largest corporation on earth.She was a problem solver.When a department was in crisis, the director of that department would be fired and they would put my mother in charge. Within a year, it would become the top-performing department in the company. She would remain at the head of that department until another one was in crisis and another manager was fired.It didn’t take that company long to see her as a resourceful problem-solver. And it won’t take your company long to see the same in you.Recognition and wealth pursue the person who solves every problem they find.Are you willing to become that person?Poor Todd. Things could have been so much better in his life if he had only met my mom.Roy H. Williams

Tinkerbell’s light gradually dims as she begins to die.Her only hope of survival is an audience that believes in fairies and demonstrates that belief through enthusiastic applause. Tinkerbell’s light has been growing brighter since 1904, when she first appeared in J.M. Barrie’s play, Peter Pan.Everyone believes in fairies enough to clap enthusiastically.The Tinkerbell Effect describes things that exist only because enough of us believe they exist, and behave as though they do.Paper money has value only because enough of us believe it has value and behave as though it does. If we quit believing it has value, it becomes scrap paper.Laws have power because we believe they have power and behave as though they do. If enough of us behaved as though laws had no power, we would live in a lawless society.Our economy is robust when we believe it is robust. But when we become anxious and hunker down in financial hesitation, our economy unwinds in a downward spiral, like a kite falling from the sky.A confident person spends money.Uncertain people delay their purchases.Uncertainty is an enemy of the economy.A lot of people are feeling uncertain.It seems as though every voice in the media believes we need to be instructed about what to believe and what to do. But I am convinced we need encouragement far more than we need instruction.Encouragement brings hope; hope that tomorrow will be better than today, hope that “next time” will be better than “last time,” hope that Tinkerbell will continue to live and twinkle and fly.In last week’s rabbit hole, Indiana Beagle shared a Barbara Hall quote that struck a triumphant chord:“Belief is about collecting ideas and investing in them. Faith is about having your ideas obliterated and having nothing to hang onto and trusting that it’s going to be all right anyway.”In the face of relentlessly negative newscasts, I have moved from belief in America to faith in America.I am not alone.Known for her focus on “Feel Good” news, Ellen K hosts a morning drive show that recently became the largest radio audience in Los Angeles. Evidently, people are looking for someone to make them feel good. I suggest you keep that in mind when writing ads to attract people to your business.If you should ever visit Wizard Academy in Austin, you will notice a bronze plaque on the subterranean path to our tower that overlooks the city of Austin from 900 feet above it. Stand on that plaque in the darkness and look just above the hilt of the sword at the top of the tower. That point of light you see is Tinkerbell. It is the guiding light of the Wise Men in the Christmas story. It is the bright star in The Impossible Dream, of which Don Quixote sings, “This is my quest: to follow that star, no matter how hopeless, no matter how far…”Now look down and read the plaque. It says, “To Calvin Laughlin.”Calvin was an infant when his parents became major donors to Wizard Academy many years ago. His father is Roy Laughlin. His mother is Ellen K.Congratulations, Ellen.And thanks for the good news.Roy H. Williams

When a business is struggling financially, cost-cutting looks like a brilliant move.But can you shrink your way to success?From what I’ve seen, it’s easier – and healthier – to increase revenues than it is to cut costs.Cost-cutting comes at a very high cost.When I was 16 years old, General Motors was the bluest of the blue-chip stocks. Alfred Sloan was the Steve Jobs, the Jeff Bezos of GM and he sold 50% of all the cars in America. Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac were easily distinguished from one another and what you drove said a lot about you.In the United States, those 5 GM brands outsold Toyota, Honda, Nissan, Ford, Mercury, Lincoln, Chrysler, Volvo, Volkswagen, Subaru, Mercedes, Dodge, Plymouth, American Motors, Jeep, Rambler, Alfa Romeo, Fiat, Renault, BMW, Audi, Citroën, Opel, Peugeot, Ferrari, Jaguar and Porsche combined.During the years I’ve been old enough to drive, GM has fallen from 50% down to just 17% of sales in the U.S.But don’t blame increased competition. Other than Tesla and Hyundai, every brand of car available in America today was available when I was 16.What happened to GM? Cost-cutting.After a long and successful history of choosing CEOs from its manufacturing and sales divisions – Sloan, Wilson, Curtice, Donner, and Roche – General Motors chose a money manager, Richard Gerstenberg, to become CEO in 1972. Two years later, they replaced him with an accountant, Thomas Murphy.Money-manager Gerstenberg and accountant Murphy said, “Why are we spending all this money to design never-before-seen cars every 2 or 3 years? The cost of re-tooling our factories is astronomical. It would be more cost-effective to simply attach different grilles, headlights and tail lights along with a different interior and let each of our 5 brands sell essentially the same car.”“By the 1980’s, Sloan’s design had faded away. General Motors had not only blurred its brands and divisions, it engaged in badge engineering, offering essentially the same vehicle under several model and brand names.” – Good Strategy/Bad Strategy, p. 221On Oct. 11, 1988, the New York Times reported,“Underscoring the need for a distinct image in the era of look-alike cars has been sales performance. Buick sales dropped to 557,491 last year from about 920,000 in 1984, and Oldsmobile sales fell to 714,394 last year after having topped one million in the preceding three years.”Then, just before the end of 2018, we read,“In a move that will save the company $6 billion by the end of 2020, General Motors announced a restructuring Monday that includes chopping its workforce by 15% and shuttering 5 plants next year.”Some people never learn.Rust in peace, GM.I’ve watched this same movie, over and over, in every category of business in America. But no matter which actor is playing the lead, this movie always ends the same.Are you planning to shrink your way to greater profitability?I suggest you try to increase your sales revenues instead.That’s the only movie that has a happy ending.Roy H. Williams

I know what happens when men retire.I do not know what happens when women retire. Perhaps they are plagued by the same maladjustments, discomforts and discontentment as men, but I doubt it. As Michele Miller points out in her audiobook, The Natural Advantages of Women, females of our species are gifted with different neurological wiring that helps them be less obsessive, more able to adapt. She doesn’t use exactly those words, but that’s my interpretation of what the medical research seems to indicate.But men. I do know men.I’ve spent 40 years watching businessmen step up and out to make way for new leadership stepping up and in.Two Things Happen When Men Retire:Most of us lie to ourselves.“I’m going to play golf.” “I’m going to go fishing.” “I’m going to travel.” But as my friend Don Kuhl pointed out recently, these activities get old fast.Within 12 months, most men return to doing what they have always done.I’ve never seen it fail. A successful man will not be happy in retirement until he finds a way to redirect the superpower that made him successful. Warren Buffet calls this superpower, “your circle of competence.” The problem is that most men don’t know what theirs is.Acquired skills are conscious competence. But special talents, instinctive superpowers, flicker outward like invisible tongues of fire from your unconscious competence.Have you ever received instruction from a talented person? They speak poetry and think it is science.Rare is the talented person who is aware of – and can consciously explain – their unconscious competence. But I’ve known a few talented men who were aware, and who could explain it. And each of them was able to move elegantly from one season of their life to another.My father-in-law, Paul Compton, understood all things mechanical. If Paul had kept a sketchbook of his inventions it would have rivaled the sketchbooks of Leonardo da Vinci. It’s little wonder that Paul quickly rose from working in a stone quarry to become an expert repairman of jet engines for American Airlines.When Paul retired, he bought expensive machines at auction that were beyond repair and then repaired them. He made a profit when he sold them, of course, but he wasn’t doing it for the money. It was just a new and different way for him to aim his superpower.Sean Jones is a good friend, a former client, and a genius who consciously understands his unconscious competence. Sean’s superpower is that he can look at a business, any business, and see precisely how to systematize 80% of the recurrent activities so that he might personalize and humanize the remaining 20%. Sean made his first fortune when he bought a small chain of jewelry stores and then used his superpower to skyrocket that company to unprecedented success. He sold that company for the kind of money people fantasize about when they buy lottery tickets, but Sean never-for-a-moment thought of retiring.He is now buying other companies in completely unrelated categories and working his special brand of magic on them, as well.Paul Compton and Sean Jones didn’t retire, they merely redirected their superpowers in new and different ways.Last week I had a 6-hour lunch with a close friend who is about to sell his company. He told me of 3 different things he was planning to do during his “retirement” and then asked me whether I thought he was crazy, because all 3 ideas – on the surface at least – were crazy.I asked my friend if he knew what it was that had made him so successful in his chosen field. He knew. I knew, too. But now that it was on the table, I was able to point to it and show him how each of his 3 “crazy” ideas was just a new way of directing his superpower.He was very happy to hear it.Are you considering changing how you spend your days?Every man has an unconscious competence. When you have identified yours, you will have found the key to your personal success, and an abiding sense of fulfillment and purpose.Do you need some help finding your superpower? It’s easy. Just ask those people who know you best.Ciao for Niao,Roy H. Williams

“It was dark inside the wolf,” is how Margaret Atwood believes the story might have opened.Emily Dickinson would agree. “Tell all the truth, but tell it slant,” was her advice to those of us who want our emails to be opened, our stories to be read, and our voices to be heard.If you want your subject line, headline, or opening line to win attention, “Tell all the truth, but tell it slant.” Approach your subject from an interesting angle.The head-on approach is for journalists without wit.“Elderly Woman Eaten by Wolf but Survives.”You are not a journalist without wit.Are you captivated by a photograph or story?Let me give you the reasons why:1. It represents an idea bigger than itself.2. Part of you feels like you are there.3. Your imagination is called upon to fill in what was purposely left out.4. The subject is approached from an interesting angle.Do you want to secure the engagement of your reader, listener, customer?1. Make your words about something bigger than you and your product.2. Put your reader, listener, customer into your story, your speech, your ad.This is easily done using second person perspective and present-tense verbs. “You are walking through a forest when you hear the shadows of the trees sucking the light from the air around you and notice a four-legged shadow making its way slowly through the trees, coming toward you…”3. Did you see what we left out?We did not say it was a “dark” forest, but you saw darkness anyway. We did not say “ominous” but you felt it when the shadows came alive and began sucking the sunlight from the air around you. We did not say “wolf,” but you saw one in the four-legged shadow making its way slowly through the trees.*4. Questions flood the mind when a story is entered from an interesting angle.Why are we in the woods? Where are we going? What will we do when we get there?Whether spoken or unspoken, questions are the unmistakable sign of engagement.No questions, no engagement.No engagement means no sale, no income, no rave reviews.But you will have all these things and in great supply because you subscribe to the Monday Morning Memo and you understand, and believe, what I have told you.But I will not tell you about our monthly webcast unless you really want to know.Confession: I write ads to attract successful people; perceptive, intelligent readers.I do not write for dull-witted people. My avoidance of false claims, fear-mongering, hyperbole and exclamation points is a form of targeting-through-ad-copy that is more reliable than any customer list money can buy.The fact that you have read these musings all the way to the end makes me think highly of you.Very highly, indeed.Yours,Roy H. Williams

1. You Cannot Measure What Has Not Happened.When you ask a person about an experience that exists only in their imagination, they will give you imaginary answers.You can measure only what has already happened.In other words, you cannot measure what “would” or “would not” work. You can only measure what “did” and “did not” work.2. The Question Influences the Answer.“A question, even of the simplest kind, is not, and never can be unbiased. The structure of any question is as devoid of neutrality as its content. The form of a question may ease our way or pose obstacles. Or, when even slightly altered, it may generate antithetical answers, as in the case of the two priests who, being unsure if it was permissible to smoke and pray at the same time, wrote to the Pope for a definitive answer. One priest asked, “Is it permissible to smoke while praying?” and was told it is not, since prayer should be the focus of one’s whole attention. The other priest asked if it is permissible to pray while smoking and was told that it is, since it is always permissible to pray.”– Dr. Neil Postman, New York University3. Focus Groups are Plagued by a Basic Flaw of Human Psychology.When a person is asked to sit in judgment, they go to a different place in their mind. They react as a critic rather than as a customer.Asking a stranger to be a judge does not qualify them to be one.On page 8 of today’s rabbit hole, Indy Beagle will entertain you with video highlights of two hidden-camera focus groups as they evaluate a potential TV ad for Apple. It is tragicomic to watch these honest, well-intentioned focus group participants reveal their prejudices and inexperience. In the end, both focus groups conclude the proposed TV ad is badly conceived and recommend to Apple that it not be produced, never realizing they were evaluating the script and storyboard visuals for the most successful TV ad in history.4. What People Believe (and Say) They Will Do is Different From What They Will Actually Do.In the words of Harvard Business School professor Gerald Zaltman, “The correlation between stated intent and actual behavior is usually low and negative.” Zaltman goes on to describe how Hollywood films and TV pilots—virtually all of which are screened by focus groups—routinely fail in the marketplace, and 80 percent of new products or services fail within 6 months when they’ve been vetted through focus groups.Most of the thoughts and feelings that influence consumers’ behavior occur in the unconscious mind. “Unconscious thoughts are the most accurate predictors of what people will actually do,” Zaltman said in an interview. People think they will make an objective, transactional decision, when in reality they will make a subjective, relational one.We believe we will decide with our mind. But in the moment of truth, we decide with our heart.5. Data can Show You the Outcome of Your Past Decisions, But it Cannot Tell You How to Do What Has Never Been Done.Do not look to survey recommendations when you seek innovation.Innovation is a product of intuition.Was stereo invented because customers said, “Instead of the music coming out of just one speaker, why not have part of it come from a speaker on the left and the rest of it come from a speaker on the right?”Customers did not ask for stereo but after they were exposed to it, they couldn’t live without it.Did Steve Jobs develop the iPhone because customers told him they wanted cameras in their cell phones?Was inventory-on-demand perfected as a result of customers saying, “I think it would be better if you waited to create the product until after I order it?”Did Tony Hsieh invest in Zappos.com because people told him they would like to buy shoes online without first trying them on? Yet 10 short years after Hsieh invested $2 million in Zappos, the company was making so incredibly much money that Steve Bezos bought it for $1.2 billion.Keep in mind that Zappos charges full-price for shoes. So any argument of Zappos having an unfair “price advantage” goes out the window. Zappos elevated customer service to a new level and changed an entire industry.Do You Really Need a Group of Strangers to Give You Permission to Do What You Want?After many years of conducting focus groups for America’s largest companies, Joey Reiman, a founding partner of the BrightHouse Institute, told the New York Times, “Focus groups are ultimately less about gathering hard data and more about pretending to have concrete justifications for decisions that have already been made.”If you have a weak idea that requires no courage and isn’t going to raise any eyebrows or make a difference, surveys and focus groups will tell you that you should definitely go ahead and do it.But when you have an idea that can change the future of your company, those same people are going to tell you it’s a horrible idea and that you have lost your mind.Don’t spend the money on a survey.Save it to buy champagne when it’s time to celebrate.Roy H. Williams

I ate too much and it made me heavy and slow.Using too many words is like eating too much.It makes communication heavy and slow.Short sentences hit harder.Nouns and verbs are fists that deliver punches.Adjectives and adverbs are gloves that soften the blows.Unless they are unexpected.A brass-knuckled uppercut is an unexpected adjective that modifies a noun you didn’t see coming.“Your soup tastes like old socks that have been marinated in diesel, sprinkled with urine, and baked for three days covered in a sack that’s been used to wipe a donkey’s backside.”– Richard Poole, Death in Paradise, Season 1, episode 6Soup is the subject.Tastes, marinated, sprinkled, baked, covered, used, and wipe are the verbs.Socks, diesel, urine, days, sack, and backside are the nouns.Unexpected words unleash vivid images when they splash onto your mind.We’re driving through Mike’s Express Car Wash in Indianapolis.A 4,000,000 BTU heater ensures the water never drops below 180 degrees. Hot water cleans better than cold water because it delivers more stored energy.Soap unleashes hungry electrons that dissolve the road film clinging to our car.Pressure pumps give the water kinetic energy as it is fired from the nozzles of the guns.Brushes and mitters deliver mechanical vibration, a fourth kind of energy.The soft-water rinse is chased by a tornado that rocks our car and leaves never a trace of moisture.Emerging from the tunnel, we look like we’re driving off the showroom floor.A well-written paragraph unleashes bright colors like a car wash in Indianapolis.Similes and metaphors allow us to use the known and familiar to reveal the unknown and unfamiliar, like a father telling his son about the birds and the bees.Paired opposites give us the power to shine light in dark places and bring wellsprings of water to thirsty deserts.Rhythms of stressed and unstressed syllables make our words memorable. Meter is music. Meter is magic.Alliteration gives us the ability to accelerate all 43 phonemes, like many mumbling mice making midnight music in the moonlight. Mighty nice.The names of shapes and colors and familiar things allow us to project images onto the movie screen of the mind.Words give us the power to speak worlds into existence.What future will you set in motion today?Roy H. Williams

There is, to my knowledge, only one way to profitably put the power of the internet to work for you.It’s simple; just give people what they want.But first you have to know what they want.Let me help you with that.(1.) They want answers, and(2.) they want entertainment.But the answers they seek aren’t usually about your product or service. The answers they seek are solutions to their problems.You must speak directly to the felt need.If you would win the attention of the people, give them the answers they seek.If you would win the attention of the giants, learn to speak their language.Do you understand Natural Language Processing, that algorithmic logic in the binary minds of Google and YouTube and all the other giants in the land? Learn to speak this language and the internet will become your trumpet.We’re always ready to be distracted by something delightful.Entertain us and we’ll give you our attention. Make us feel good and we’ll consider you our friend. Stand for something we believe in and we’ll give you our support. Make a difference and we’ll tell our friends about you. Give us happy thoughts to think and we’ll allow you to guide our minds.Win the heart and the mind will follow. The mind can easily find logic to justify what the heart has already decided.Entertainment is the only currency with which you can purchase the time and attention of a too-busy public. This is the essence of customer bonding.If you talk about yourself and why your solution is better than your competitors’, the only people who notice will be your competitors. But if you deliver a thrill of pleasure, the public will gather at your feet.Two young men sat through all the classes at Wizard Academy and learned how to use the life-changing tools of answers and entertainment.And with those tools firmly in hand, they wandered into the untamed wilderness of the internet exactly two years ago. They had no money to spend. None. But they had knowledge and time and energy.They chose to use their tools on YouTube. They could just as easily have chosen one of the other social media platforms, or they could simply have created a blog.The power is not in the platform. The power is in the answers and in the entertainment.They decided not to allow advertisers to attach ads to their daily YouTube show. This means they would receive no revenue from advertising, but it also means no false metrics created by click farms.Two years later, their worldwide audience is spending an average of 457,000 minutes a day watching their show. That’s more “viewing minutes” per day than are contained in 317 twenty-four-hour days. In a couple more months they’ll be receiving more than one year’s viewing time each day.Needless to say, they have become extremely influential in their chosen field and money is raining down on them like confetti in a ticker-tape parade.And they’ve not yet spent a penny on advertising.Roy H. Williams

When someone says, “Figures don’t lie,” know this: Figures lie, and liars figure.Never trust a weasel with a calculator.Do you remember the mortgage meltdown of 2008 and The Big Short, the movie that was made about it? There is a scene in that movie where investors Mark Baum and Vinnie Daniel go to visit Georgia Hale, an employee of the ratings agency Standard and Poor’s:Georgia Hale: So, alrighty, FrontPoint Partners, how can Standard and Poor’s help you?Vinnie Daniel: Well, we don’t understand why the ratings agencies haven’t downgraded subprime bonds since the underlying loans are clearly deteriorating.Georgia Hale: Well, the delinquency rates do have people worried but they’re actually within our models.Vinnie Daniel: Says you.Mark Baum: So you’re convinced the underlying mortgages in these bonds are solid loans?Georgia Hale: That is our opinion, yes.Vinnie Daniel: Did you check the tape? Have you looked at the loan level data?Georgia Hale: What do you think we do here all day?Vinnie Daniel: They’re giving these loans to anybody with a credit score and a pulse.Georgia Hale: Excuse me, sir. What do you think we do here all day?Vinnie Daniel: We’re not sure. That’s why we’re here.Mark Baum: Here’s what I don’t understand,Georgia Hale: We check, we recheck, we check again…Mark Baum: If these mortgage bonds are so stable, if they are so solid,Georgia Hale: Perhaps you should check your friend.Mark Baum: have you ever refused to rateGeorgia Hale: We stand behind them.Vinnie Daniel: That’s delusional.Georgia Hale: We stand behind them.Mark Baum: Georgia, have you ever refused to rate any of these bonds – upper tranche – as Triple-A? Can we see the paperwork on those deals?Georgia Hale: Oh, I’m under no obligation to share that information with you, whoever you might be.Mark Baum: Just answer the question, Georgia. Can you name one time in the past year where you checked the tape and you didn’t give the banks the Triple-A percentage they wanted?Georgia Hale: If we don’t give them the ratings, they’ll go to Moody’s, right down the block. If we don’t work with them, they’ll go to our competitors. It’s not our fault. It’s simply the way the world works.Vinnie Daniel: (after a dumbfounded pause) Holy shit.Georgia Hale: Yes, now you see. And I never said that.It seems to me the principal difference between the unregulated world of subprime loans and the unregulated world of online marketing is that there is no way to “short” the world of online ad fraud. There is no way to make a profit by exposing and ending it.In a widely-circulated news column published the day after Christmas, 2018, reporter Max Reid asked and answered an important question:“How much of the internet is fake? Studies generally suggest that, year after year, less than 60 percent of web traffic is human; some years, according to some researchers, a healthy majority of it is bot. For a period of time in 2013, the Times reported this year, a full half of YouTube traffic was “bots masquerading as people,” a portion so high that employees feared an inflection point after which YouTube’s systems for detecting fraudulent traffic would begin to regard bot traffic as real and human traffic as fake…”“In late November, the Justice Department unsealed indictments against eight people accused of fleecing advertisers of $36 million in two of the largest digital ad-fraud operations ever uncovered…”“Take something as seemingly simple as how we measure web traffic. Metrics should be the most real thing on the internet: They are countable, trackable, and verifiable, and their existence undergirds the advertising business that drives our biggest social and search platforms. Yet not even Facebook, the world’s greatest data–gathering organization, seems able to produce genuine figures. In October, small advertisers filed suit against the social-media giant, accusing it of covering up, for a year, its significant overstatements of the time users spent watching videos on the platform (by 60 to 80 percent, Facebook says; by 150 to 900 percent, the plaintiffs say).“In response to that story, Former Reddit CEO Ellen Pao tweeted,“It’s all true: Everything is fake. Also mobile user counts are fake. No one has figured out how to count logged-out mobile users, as I learned at reddit. Every time someone switches cell towers, it looks like another user and inflates company user metrics.”Also in response to that story, Aram Zucker-Scharff tweeted,“The numbers are all fking fake, the metrics are bullshit, the agencies responsible for enforcing good practices are known bullshitters enforcing and profiting off all the fake numbers and none of the models make sense at scale of actual human users.”Zucker-Scharff is director of Ad Tech at the Washington Post.But none of this is surprising, or even new.Two years ago, at the annual convention of the Interactive Advertising Bureau, (a business organization that develops industry standards, conducts research, and provides legal support for the online advertising industry,) Marc Pritchard, CEO of Procter and Gamble, the largest advertiser on earth, said,“We’re all wasting way too much time and money on a media supply chain with poor standards at option, too many players grading their own homework, too many hidden touches and too many holes to allow criminals to rip us off.”“We have a media supply chain that is murky at best and fraudulent at worst. We need to clean it up and invest the time and money that we save into better advertising to drive growth…”“Adopt one viewability standard. Implement accredited third-party measurement verification. Get transparent agency contracts and prevent ad fraud. Yet, for many reasons we haven’t taken enough action to make a difference.”“Now maybe one reason is that cleaning up the media supply chain is not really a very sexy topic. I mean let’s face it, it would be a lot more fun if I were up here talking to you about the latest VR experience than bot fraud. But maybe there’s another reason and I’m going to make a confession, which may sound familiar to some of you. I confess that P&G believed the myth that we could be the first mover on all of the latest shiny objects despite the lack of standards and measurements and verification.”“We accepted multiple viewability metrics. Publishers self-reporting with no verification, outdated agency contracts and fraud threats with a somewhat delusional thought that ‘digital is different’ and that we were getting ahead of the digital curve.”“We’ve come to our senses. We realized there is no sustainable advantage in a complicated, non-transparent, inefficient and fraudulent media supply chain.”Marc Pritchard looked the Interactive Advertising Bureau in the face, much like Mark Baum looked the ratings agency, Standard and Poor’s, in the face during The Big Short. I bring these things to your attention only to suggest that you be extremely careful when evaluating marketing opportunities.I’ve heard the stories of exciting success being created through online marketing. And I’ve investigated a number of those stories to see what they have in common. The denominator I found to be most common was that the big winners have remarkably high profit margins, with 18x and 20x markups being typical.This is because it takes a 20x markup to fund a cost-of-marketing that exceeds 30% of sales.Am I suggesting that you avoid online marketing? No, I am not. I am merely suggesting that an enthusiastic “true believer” in online marketing may not be the best person to entrust with your ad budget.I don’t get involved in the selection of online media. Instead, I have partnered with knowledgeable, experienced online marketers who know how to separate fluffy data from hard facts, and whose basic nature is to be quietly, politely suspicious of everything they are told.I can put you in touch with them if you like.As for me, I’m continuing to invest heavily in broadcast radio ads and broadcast television ads. And based on the growth of businesses I witnessed last year, anyone who says that radio ads and TV ads don’t work anymore has been woefully misinformed.Roy H. Williams