Under the Influence with Terry O'Reilly - S1E25 - Ask Terry 2012

Episode Date: June 23, 2012

In this final episode of the season, Terry answers listener questions about the advertising industry. Some of the very insightful questions include: When was the very first ad every done? Do celebrities have to actually use a product before they endorse them? Why do advertisers still use Imperial measurements in ads? Does product placement work better than traditional advertising? And "what effect will the loss of the penny have on traditional 99 cent sale prices?" Hope you'll join us for some very surprising answers. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. From the Under the Influence digital box set, this episode is from Season 1, 2012. You're soaking in it. Scores of it in an instant. Your teeth look whiter than noon, noon, noon. You're not you when you're hungry. You're in good hands with Austin.

You're under the influence with Terry O'Reilly. Leroy Anderson was called the master of the minute. He was a classical composer who wrote short, light concert pieces. One of his most famous songs was written in 1950. It was titled The Typewriter Song. In it, Anderson actually played a typewriter accompanied by the Boston Pops Orchestra. The first commercially successful typewriter was manufactured and sold by E. Remington & Sons,

a sewing machine company. This was also when the QWERTY keyboard was adopted. One of the reasons for the design was to avoid typewriter keys from jamming. Prior to QWERTY, letters often paired like T and H and S and T would jam, as fast typists would cause both keys to strike almost simultaneously.

So QWERTY separated those letters, causing a split-second pause. One myth was that QWERTY was developed to slow typists down. Not true. It was invented to speed typing up. When I started typing, there was no exclamation mark on the keyboard. And may I say right here, I'm not that old.

If you're over 45, you'll remember a time when an exclamation mark involved three keystrokes. You had to type a period, then a backspace, then type an apostrophe. The true exclamation mark didn't actually appear on keyboards until well into the 1970s. Because it involved three keystrokes, it was used sparingly. Unlike today, where it is used with hyperventilating frequency on emails and tweets,

the Globe and Mail called it the grammatical mascot of the younger generation. Another interesting key is the at symbol, which is above the number two. It sat there lonely for decades, an obscure accounting symbol meaning at the rate of. Now it doesn't know what hit it. The at key is the heart of every email address and Twitter handle in the world. It may be the most used key of the era. Another dark horse on the keyboard is the octothorpe.

It is the pound sign, sitting proudly atop the number three key, a symbol so rarely used just three years ago that some people had to press alt plus three just to generate one.

Most people now know it as a hash, and Twitterers will recognize it as the symbol of a hashtag, a marker that allows tweets to be grouped by subject. But maybe the most interesting key of all is the question mark.

It was first used around the 4th century as a vertical double dot. In the 8th century, it resembled a lightning flash striking from right to left. By the 13th century, the lightning flash transformed into more of a sharp curve and was put over a dot. Another school of thought believes it comes from the Latin word quistio, meaning question. It was abbreviated in the Middle Ages to be a simple Q-O, with the lowercase q written over the lowercase o,

which then transformed into the modern question mark. Either way, it is one of our most profound symbols as it begs response, answers, and solutions. Because this is our last show of the season, I thought it would be the perfect time to answer questions that have been sent in, or, shall I say, typed, by our wonderful listeners. When we put out the call, the responses came in fast and furious, with ats and hashtags and lots of exclamation and question marks attached.

So sit back, grab a coffee, and I'll answer the very smart and insightful questions you've sent in. Or, at least, I'll try! Bracket, exclamation mark, bracket. You're under the influence. We receive dozens and dozens of excellent questions. Some I've answered in past shows, but many were new. I had to do some research for some of them,

and for others, I called up a few of my colleagues in advertising to get a point of view. So, let's begin at the beginning. Listener Eric Lisenko asks, What's the oldest known ad? Did Romans, ancient Egyptians, or even cavemen post ads for services or products? Excellent question. Very hard to answer that conclusively, Eric, but let's take a trip together, all the way back to the year 1704. As I mentioned in our classified advertising episode,

the first printing press in America arrived in Cambridge, Massachusetts in 1638. But the first successful newspaper wasn't established until 1704, called the Boston Newsletter. America's very first classified ad appeared in its debut issue and was written by the publisher himself. It was an ad to solicit ads. But it's not the first ad. Let's go back to 15th century England. Here, advertisements are beginning to appear

as hand-builds or hand-written signs nailed to posts. Hence the name, Poster. But we're still not close to the first ad. Pack your bags. We're going to take a big jump back... ...to Pompeii, Italy. If you look closely on the walls of the ruins, you'll find listings painted in black or red for local house rentals and various services offering their wares.

And this is the year AD 79. or red for local house rentals and various services offering their wares. And this is the year AD 79. But we're not finished yet, Eric. Welcome to ancient Rome, circa 264 BC. In this era, the Romans used posters to advertise circuses and gladiator matches. Not only that, but gladiators actually endorsed products. Ridley Scott, who directed the movie Gladiator, was going to have lead character Maximus endorse an olive oil product in the story, but didn't think audiences would believe it was real.

But it is historically accurate. You, the small round gladiator, you're next! Uh-oh, gotta go. We still have one more stop. Welcome to ancient Egypt. Thebes, to be precise. Prior to the written word, Egyptian vendors would hawk their wares on the street. But by 4000 BC, advertisements were printed on papyrus or painted on walls, many searching for escaped slaves. Beyond this date, it's a mystery, as so little remains.

Some cave art in Australia has been carbon dated to 40,000 BC. Were there hunters for hire? Cave interior decorators? Who knows? But there you go, Eric. There were ads at least as far back as 4,000 BC. It's time for Animaniacs. I'm a baby to the max. So kiss me back and relax. You'll learn how to do my Animaniacs.

Okay, Blair Packham tweeted this question. Why do so many women's hair product and tampon ads run on kids' shows? I went to two of the top media buyers in the country for an answer. First, they said that many advertisers do bulk media buys at a discount. While the upside is a large package of commercial time at a lower price,

the downside is that the commercials run in a bulk assortment of shows. As a result, some commercials will run in oddly matched programs. But because the media buy is so inexpensive, advertisers feel that having the commercial occasionally surface in the wrong show doesn't really matter. Then there's another interesting reason why this may happen. Advertisers know that a high percentage of mothers watch television with their kids.

It's called co-viewing in industry jargon. So ads are placed in those shows to reach the secondary audience, moms. It's the same reason why Sesame Street puts so many jokes in their programs for adults. They know mom and dad are watching too. It's interesting to note that advertisers only pay for the intended target audience though. So if the audience is 80% kids, the advertiser only pays for the 20% that is mothers. And because daytime TV is in such low demand these days, broadcasters will take whatever revenue they can get. Then the reverse often happens.

Recently, DreamWorks printed a sticker for the release of the animated movie Madagascar 3 and put it on 100 million dole bananas. So mom buys the bananas, mom sees sticker, notes new movie release, she gives banana to her kids. Kids see sticker. Kids bug her to take them to the movie. It's a marketing strategy called the nag factor. Kids nag mom to buy the product. This happened all the time when my daughters were growing up.

Call it karma for an ad man. It's so simple yet so smart. Protection for today, security for life. All from a company I greatly admire. Guarantee Trust Life. I know them personally. They really do care about the families they protect. Celebrities, like Barbara Eden, have endorsed products forever.

And Chi Chi Lam asks, Is it a myth that celebrity endorsers must use the product in order to advertise it in a campaign? Hmm, a timely question, because the guidelines have changed recently. For years, celebrities could endorse whatever they wanted in exchange for money. Can you believe it? They're still trying to compare themselves to Coca-Cola. But these guys tried it, these guys tried it, these guys tried. But these guys tried it. These guys tried it.

These guys tried it. These guys tried it too. And these guys are still comparing themselves to Coca-Cola. The presumption was that the celebrity liked the product and used it. But that wasn't always the case. In 2007, the Raymond Weil Luxury Watch Company sued their own celebrity endorser, Charlize Theron, because she was seen wearing a Dior watch in a perfume ad. They were paying Theron a reported $20 million a year to wear Weil watches exclusively.

While celebrity endorsement guidelines used to be a little fuzzy, they are certainly changing. In 2009, the U.S. Federal Trade Commission, or FTC, brought in new guidelines. Essentially, the FTC Act now states that both the advertiser and the celebrity endorser are now liable for false or unsubstantiated claims. That's new. So if a celebrity endorses something they haven't used or don't really believe in, and if they're found to be making false or misleading claims, they might be liable. That could spell big trouble for celebrities who haven't done their due diligence or don't

use the products they endorse. Celebrities must now also disclose their material connections with the advertiser. In other words, a celebrity must now tell the public when they are being paid to endorse the product. Listen to Donny Osman talk about a product

on the Dr. Phil show. Wow, that's non-stop energy. Well, I cannot even imagine. For example, last night, you did a show last night that was 90 minutes starting at 730 that's right then you went through that then you came here you're here this morning that's right doing all of this it's non-stop I don't sleep anymore all right so where do you get the energy seriously I mean look at you well we've known each other a long time. You don't ever get older. Well, thank you.

It's quite funny because, you know, people are kind of shocked when they hear that I'm 54 years old. And they say, how do you keep your youth? I have found something, Dr. Phil, that I think is the closest thing to the fountain of youth. Oh, you do have a secret. I have a secret, and I've never really talked about it. I've been doing this for the last two years. It's called protandum, and it works. I have a secret, and I've never really talked about it. I've been doing this for the last two years. It's called ProTandem, and it works. I'm telling everybody about this.

In that particular clip, he doesn't say he's being paid, but he is a paid spokesperson for the product. For years, those guidelines only pertained to commercials and print ads, but new endorsement guidelines cover talk shows and social media, too. In Canada, the Advertising Standards Council states that testimonials must reflect the genuine, current opinion of the endorser based on adequate information or experience with the product.

If a court finds the claims to be false or misleading, an individual may have to pay a penalty of $750,000. A corporation may have to pay between $10 and $15 million. That's enough to even put a dent in a movie star bank account. So yes, celebrities better be using the product they stand behind. And by the way, these stipulations apply to anyone who endorses a product, even ordinary consumers.

And we'll be right back. If you're enjoying this episode, why not dip into our archives, available wherever you download your pods. Go to terryoreilly.ca for a master episode list. Steve Romain Facebooked an interesting question. He notes that when car dealerships in Victoria run radio commercials, they all quote miles per gallon when talking fuel efficiency.

But if you spent your formative years in school after 1973, you grew up in the metric age. So Steve's question is, why do Canadian advertisers still refer to imperial measurements? Good question. You'll notice some retailers offer up both imperial and metric measurements. You get a price per pound and an equivalent price per kilogram. That's a good marketing strategy, I think. I'm old school and prefer imperial, so I like to have prices explained in pounds and gallons.

I still have no idea how warm 19 Celsius is. My kids have no idea what 66 degrees Fahrenheit feels like. One industry that seems to have successfully hung on to the Imperial system is the building trade. You still ask for 2x4s and half-inch copper piping. But in the end, the answer is to know your customer. If marketers are catering to multiple generations, using both Imperial and Metric is a smart thing to do. What price would we pay?

What behavior would we forgive? If they weren't pretty, if they weren't temperamental, if they weren't beyond our reach and a little out of our control, would we love them like we do? Jaguar, at last something beautiful you can truly own. Both Lena Eljabi and Jennifer Thuncher asked, which works better, traditional advertising or product placement in TV shows and movies? The answer is, it depends.

Traditional advertising focuses on a product or company without any other distractions in the messaging. It is completely controlled by the advertiser. On the other hand, product placement is when brands are put into movies or TV shows as part of the storyline. The chances of a viewer sitting through a product placement segment in a TV show are higher than that same person sitting through a commercial break. But the product is not the star as a rule.

In many instances, the product is incidental to the action. For example, the hero may enjoy a Coke while having a conversation with another character, but the Coke has no impact on the story. On the other hand, there have been times where the product placement is central to the story. In the TV series Mad Men, for example, Hilton Hotels was a central plotline one season. Hilton paid for that, and the storyline was terrific. Sometimes, brands get used in plotlines without their permission. In this past season of Mad Men,

ad agency Sterling Cooper Draper Price was pitching the Jaguar account. The Jag client says he'll give the account to the ad agency if he can sleep with one of the agency's female employees. That episode didn't make Jaguar look good, but it was fiction. By the way, Matthew Weiner has stated that he can use brands

without their permission because it's fiction set almost 50 years ago. So, Lena and Jennifer, sometimes product placement is good, sometimes not Logan gamble sent us a very insightful question he asks what effect will the loss of the penny have on 99 cent advertising excellent question using 99

cents in a price offer is a long-standing technique in marketing, especially in the world of retail. A combined $50 value, yours today for only $19.99. And get the other phone absolutely free. Other kitchen slicers sell for double the price and they don't even include the catch container. But order right now and you'll pay just $19.99. And for a limited time, order your stocking for just $19.99 and we'll include a matching ornament absolutely free. Order your potty patch today for just $29.99. 99 cent price endings are often referred to as charm prices, as they make people feel they are getting an especially good deal. There is interesting psychology at work here.

When we hear a price ending in 99 cents, we tend to round down. So a 9.99 price reads as $9 in our minds. Retail analyst William Poundstone calls this the left-digit effect. Shoppers will tend to evaluate the price based on the left digit, not the right ones. One exception to this would be markdown prices.

We tend to think if a discount is easy to calculate, it's a better bargain. So, an item that says, originally $20, now $15, sounds better to us than, originally $20, now $13.99. You'll be tempted to go with the first offer, even though the latter saves you more money. Simplicity overrules logic. Back to Logan's question about how the disappearing penny will affect 99-cent charm pricing. At 11 a.m. on Friday, May 4th of 2012, a ceremony was held at the Royal Canadian Mint to say goodbye to the one-cent coin. While it will take until the fall to distribute all the pennies now on hand, the Mint will no longer produce them. According to the government,

every penny struck costs 1.6 cents to make, which costs an additional $11 million per year. So, here's the going-forward plan. The government expects that businesses will apply rounding in a fair and transparent manner. The rounding will not be done on single items, but on the final bill of sale after taxes. If the price ends in a 1, 2, 6 or 7, it gets rounded down to 0 or 5. If the price ends in 3, 4, 8, or 9, the price gets rounded up.

This will only apply to cash transactions. Prices will still be charged to the cent with credit and debit cards. If you're sitting on a jar of pennies and wondering if you should start using them before they get pulled out of circulation, apparently the Currency Act states a purchase in one-cent coins is legal tender only if the item costs no more than 25 cents. Never knew that.

Guess that's why I get the hairy eyeball from my dry cleaner every week. Moving on. According to a study done by the Bank of Canada, the inflationary effect of eliminating the penny will be small to non-existent. But the effect on marketers will be interesting. Infomercials have long relied on the pull of 99-cent offers, a seductive price point that signals a bargain is in the air.

But because those purchases are usually done via credit cards, it probably means 99-cent pricing will remain for a while yet. Australia and Brazil and many European countries have all gotten rid of their pennies, but the U.S. hasn't, so commerce will continue to be influenced by the penny for some time. A very interesting question, Logan,

considering how powerful the 99-cent offer has been in marketing for decades. Thanks for that. Melanie Ju tweeted this question. What is a more important objective for a startup company? Creating culture with clients or sales numbers?

My answer is always culture. Create an internal company culture first. Culture attracts the top minds and they in turn attract the best clients. I talked about this in a recent episode. The purpose of your company will determine its success. Not your product or your service, but the reason you offer it. Company culture is a competitive advantage. Your competitors can copy your price and your look, but they can't create culture out of thin air. A unique culture attracts loyal employees. Loyal employees attract loyal clients. Sales numbers will fall out of that. My two cents,

or I guess I'll have to round that down to my zero cents. Doesn't have quite the same ring, does it? In case nobody's told you, weight loss goes beyond the old just eat less and move more narrative, and that's where Felix comes in. Felix is redefining weight loss for Canadians with a smarter, more personalized approach to help you crush your health goals this year. Losing weight is about more than diet and exercise.

It can also be about our genetics, hormones, metabolism. Felix connects you with online licensed healthcare practitioners who understand that everybody is different and can pair your healthy lifestyle with the right support to reach your goals. Start your visit today at Felix.ca. That's F-E-L-I-X dot C-A. We make this show for you, so your input is welcomed and appreciated. The questions we answer today are no exception. But of one thing there is no question, and that is how amazing the people are behind the scenes at Under the Influence.

And being that this is our last show of the season, I'd like to tell you who those people are. Our incredible sound engineer is Keith Oman, who has engineered every single episode since day one, seven years ago. Our great theme music was written by Ari Posner and Ian Lefevre. Studio booking and show distribution

is handled by Tina Mertzke. All show coordination and scheduling is handled by Debbie O'Reilly. Digital and podcast responsibilities deftly stick-handled by Tim Whitley and the CBC's amazing Ananda Kerchinski. Visual elements for each episode posted by Sydney O'Reilly. I had some very resourceful researchers on board this season. Thank you Myra Elbayoumi, Courtney Pitcher, and Warren Brown.

And a big thank you to Chris Straw, Senior Director of Network Talk at CBC for all his unwavering support. And to Chris Boyce, Executive Director of CBC Radio, who took a chance on a crazy little show about advertising seven years ago. And finally, thanks to you for tuning in. We'll be under the influence again next January. Have a great summer. I'm Terry O'Reilly. Thank you. Hello, Terry. This is Logan Gamble calling.

You featured my question today about the disappearance of the penny. I have to say I'm not happy about the disappearance of Under the Influence. January is a long wait. What do you say we just round that off to August? New year, new me. Season is here and honestly, we're already over it. Enter Felix, health care company helping canadians take a different approach to weight loss this year weight loss is more than just diet and

exercise it can be about tackling genetics hormones metabolism felix gets it they connect you with licensed health care practitioners online who'll create a personalized treatment plan that pairs your healthy lifestyle with a little help and a little extra support. Start your visit today at felix.ca. That's F-E-L-I-X dot C-A.