An Interesting Advertising Observation; What Does it Mean?

I was recently paging through a couple of Transworld consumer mags (Surf and Skate I think) and something caught my attention. I don’t know what made me notice it, but I suddenly realized there was not one non-endemic advertisement in either mag. Okay, maybe I missed one, but there was no Ford Trucks, Mountain Dew, AT&T or any other of the major brands that had previously graced their pages. There was Nike. I’ll get back to that.

Talking about coming full cycle. I remember when there use to be none of these big advertisers in Transworld’s magazines at all and we thought that was a good thing. I had conversations with various Transworld people years ago about their efforts to work with these major brands. The brand, having exactly no understanding of the industry or the demographic they wanted to reach, would submit ads that were, well, not specifically too good. Transworld would try to work with the company to get it to change its ad, but that meant working through the advertising agency who could hardly go back to their client and say, “Actually, our ad sucked and we didn’t know what we were doing.”

And Transworld, no matter how much they wanted the money (and they charged these companies more than they charged industry brands) wouldn’t take the ads that sucked. Those ads made Transworld’s magazines look bad and inevitably generated irate phone calls from industry advertisers who found their ads next to the sucky ads of the companies that didn’t know what they were doing.
The economy has led brands in all industries to cut back on their advertising. But I can guarantee that Ford, Mountain Dew and AT&T have not stopped advertising everywhere. They have stopped advertising, however, in what I still consider the leading action sports consumer publications and have decided their dollars are better allocated somewhere else. Why?
I should note that if I had other action sports publications in front of me, I bet I’d find the same trend so this is not about Transworld.
You advertise through a particular channel because you believe that channel is the best way to reach and influence customers and potential customers. I can guarantee that action sports publications do not take up a big chunk of Ford’s advertising budget. Even though it’s a relatively small number, they found it expendable. Aside from the economy, there are a couple of possible reasons for that decision.
First are the changes in distribution that have occurred in the industry. Recent attempts to control certain distribution channels not withstanding, our products are all over the place. I suppose we could be critical of that (Hell- we are! All the time!), but it’s pretty much inevitable industry evolution.  In general (some brands are exceptions), we have sent the message that we’re not as exclusive as we use to be. And more and more of our customers are non participants so I’m guessing that the big non endemic companies no longer think it’s quite as necessary to be in the core publications to reach most of the action sports customers.
There’s also a certain decline in the panic that big non endemic companies felt when surf/skate/snow were growing like weeds and generating all kinds of publicity and excitement. Big brands were worried they were missing something, even if they weren’t exactly sure what it was.
Finally, there’s the recognition that the disposable income of the core magazine consumer has declined. Obviously, this has been made worse by the recession, but the decline in middle class real income is a long term trend that started before 2007.
Then there’s Nike, still advertising away in Transworld. The difference is that Ford, whoever they want to sell them to, still wants to sell pickup trucks. Nike wants to sell skate/surf/snow products and, in the process, build brand credibility across our demographic to sell the other related products they make.
So you can see why Nike is still in action sports magazines, but other big companies aren’t. The same analysis applies to Quik, Billabong, Volcom and other large action sports brands (if we can call them large in the same breath with Nike). They’ll be advertising in action sports magazines, but will spread their dollars to other advertising platforms as well. Because just like Nike, they want credibility in action sports to translate into sales in a broader market.
Only it’s not quite like Nike. Nike already has credibility and consumer recognition in the broader market and now wants to build that credibility in a small subset of that market. If they should fail (and it doesn’t look like they are going to), Nike will be just fine. Action sports industry brands are trying to go the other way- from a smaller, defined market to a much larger one. They focus every day on how to gain credibility in the larger market while keeping it in the smaller. They believe that without the later they can’t develop the former. And yet, ultimately, if they want to keep growing, they have to be able to keep larger market credibility even if they lose it in the market where they have their roots.
I think that, as much as anything, explains why our industry has evolved the way it has.