When to Take the Competitive Ad Challenge

by in Marketing, Sales

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A curious sequence of images flickered across the television screens of many New Hampshirite homes earlier this year. The sequence featured alternating images of presidential candidate Donald Trump alongside a rather repugnant looking hippopotamus – both mammals with mouths agape. The 30-second clip, part of a $2.5M advertising campaign spearheaded by a super PAC, was intended to personify Trump as a hypocrite (a play-on-words of “hippopotamus”) and suggest similarities between the two lifeforms – for one, that they both belong in a zoo rather than in the White House.

The “Hippo-Crit” commercial represented one of many competitive ads that has been launched during the hotly contested presidential race. Trump has certainly been the favored target this season, having confronted approximately $62M in negative advertising during the primaries alone (more than half of the primaries’ total negative advertising spend).

Mud-slinging in the form of competitive political ad can certainly leave a stain: negative ads aimed at political candidates have been found to be more memorable than positive ones. What’s less clear-cut, however, is whether competitive ads ultimately impact voter choice. While some experts claim they increase the likelihood of voting for the attacking candidate, others report they do not shift votes in favor of the attacker.

Competitive advertising is not unique to politics; it has also found a home in the business realm. Freeman (1987) found that approximately 25% of advertising outright identifies a competitive brand. We need not look far to find examples. Apple is a poster child for competitive advertising: it’s hard to forget the “Hi, I’m a Mac”; “Hi, I’m a PC” ads launched in the late 2000s. The “Cola Wars” saw Pepsi launch the “Pepsi Challenge” and tout the results of a blind taste test that invariably concluded most consumers preferred the taste of Pepsi. The “Soup Wars” saw Campbells advertise that more Progresso soups contain MSG compared to its own, claiming, “Unlike Progresso soups, new Campbell’s Select Harvest soups never contain artificial flavors or MSG.” The “Sub Wars” saw Domino’s trumpet the results a “national taste test” that concluded its oven-baked sandwiches “Beat Subway 2 to 1”. And the “Breakfast Wars” saw Dunkin’ Donuts build a microsite, dunkinbeatstarbucks.com, where customers can send “Friends don’t let friends drink Starbucks” and other competitive attack messages. The battle list goes on.

Much like political ads, whether or not competitive brand ads impact audience preferences is unclear. While many competitive ads have proven successful (the Pepsi Challenge reportedly sabotaged market share from Coke), others have not (Samsung’s anti-iPhone Ads allegedly resulted in more sales of Apple versus Samsung products). What is crystal clear is that you are treading on thin ice by engaging in competitive advertising. This is not, however, to say that you should shy away from such a strategy. When flirting with competitive advertising, you’ll be more apt to usurp market share from your competition if you pay heed to three key mantras:

1. “Everything in moderation, including moderation.”Oscar Wilde

Competitive ads pose a high risk of alienating consumers. 62% of consumers believe it is unacceptable for brands to criticize each other via ads. If ads are disparaging against competitors and attempt to undermine them, it won’t look favorably on your brand image. Jeffrey Gitomer, author of The New York Times best sellers The Sales Bible, The Little Red Book of Selling, The Little Black Book of Connections, and The Little Gold Book of YES! Attitude, counsels, “What you say about your competition is a true reflection of your persona.”

It’s not surprising that negative political ads have been found to be most effective when aired in moderation. Competitive campaigns are likely to be most successful if they are spread out over time, rather than routinely deployed. This strategy will also help reduce the risk of the competition retaliating and fighting back. Koprowski (1995) offers some valid guidance: “Negative comparative advertising should be used as a tactic and not an ongoing strategy.” If it’s deployed as rapidly as gun fire, there’s a heightened likelihood that the competitor will fight back.

2. “You are entitled to your opinion. But you are not entitled to your own facts.” –  Daniel Patrick Moynihan

Competitive ads will be most successful if they center around objective facts, rather than opinions. Use competitive ads as avenues to cite results of surveys, studies, focus groups, taste tests, etc., rather than to make bold, highly-opinionated claims. Lee Yih Hwai, associate professor at National University of Singapore, cautions “It will not look favorably on your brand to make bold claims. It will lower your integrity.”

Opinionated competitive ads can reek havoc beyond jeopardizing your integrity – they can also result in false advertising lawsuits. The Federal Trade Commission (FTC), among other federal, state, and local governing bodies, regulates comparative advertising. If an attacking brand launches an ad that is untruthful or deceptive, it will be subject to a lawsuit. The FTC deems an ad deceptive if “it includes a representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances”.

3. “Everybody pulls for David, nobody roots for Goliath.” – Wilt Chamberlain

Odds are that competitive ads will be most effective if the attacker is a “David” – an incumbent – rather than a “Goliath” – a market leader. When Goliaths spearhead competitive attacks, there’s a high risk they will backfire. In fact, such attacks are apt to result in the incumbent competitor gaining market share. Manning, Miniard, & Barone (2001) found that competitive advertising enhances the perceived similarity between the advertising brand and the competition.

Competitive ads are more likely to garner empathy on the part of consumers when launched by underdogs. According to Elison Lim, assistant professor of marketing and international business at Nanyang Technological University (NTU), we “tend to see a big brand taking on a small brand as being “petty”, and will hence view them unfavorably and be less empathetic toward them.” Several bodies of research (Gnepa, 1993; Grewel, et al., 1997; Schaffer & Zettelmeyer, 2009) have found that competitive ads are typically more effective when launched by less-established brands. Consumers are more inclined to empathize with underdogs who they view as facing an uphill battle against the market leader. Capitalizing on this reality, Avis, for example, has launched competitive ads against market leader Hertz with the tagline: “When you’re only No. 2, you try harder.”

Once considered “taboo” (they weren’t a legitimate practice until 1972), competitive ads are now commonplace. Indeed, they can prove to be a successful avenue to usurp market share from competitors. When you follow the mantras described above, you’ll be primed to “take the challenge” and use competitive ads to get atop the competition.

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About The Author

Rebecca Hinds
Rebecca Hinds - View more articles

Rebecca Hinds graduated from Stanford University in 2014 with a M.S. in Management Science and Engineering. In 2013, Rebecca co-founded Stratio, a semi-conductor company developing infrared sensors. The company was selected by the Kairos Society as one of the 50 most innovative student-run businesses in the world.