The Problem with Advertising — and Why Branded Entertainment Works
In Ogilvy on Advertising (1983), David Ogilvy tells a story of how the "wrong" advertising can actually reduce sales:
George Hay Brown, at one time head of marketing research at Ford, inserted advertisements in every other copy of the Reader's Digest. At the end of the year the people who had not been exposed to the advertising had bought more Fords than those who had.
I've been to many advertising conferences and talks over the decades. Last year I even had to endure the existential dread of watching a speaker distill Brat Summer into 4 pillars. It was Fall.
I have rarely seen an admission that advertising might actually hurt a brand like with Ogilvy's anecdote from 40 years ago, written in the twilight of his career. We have little incentive as an industry to look too closely, let alone admit such a thing.
Even when we look at the low-cost, conversion-driven digital advertising of the 2010s — the most one-to-one attribution you can possibly make between an advertisement and a sale — we saw an explosion of DTC brands leveraging performance marketing tactics fall nearly as quickly as they rose.
These performance ads ended up enabling a race to the bottom on price until they collapsed under their own weight once investors turned off the money spigot. Coasting from one conversion ad to the next rarely proves to be a sustainable way to do business.
It seems like brand has earned some more respect in recent years — backed by solid marketing effectiveness research — and we have less of this false brand vs performance showdown in marketing meetings. In my own experience, the C-suite takes a little less convincing these days to understand the value of their brand as an asset and why they should invest in it.
But if we're going to talk about effective brand building we need to talk about the role of advertising in helping (or possibly hurting) the effort.
So what's the problem with advertising for brand building?
- Most ads never reach the right audience.
- Even when they do, they’re ignored.
- Even when they’re not, they’re forgotten.
- Even when they’re remembered, they’re annoying.
Does that mean advertising is worthless?
No. It just means it's inefficient.
The 5% of the target audience who are about to make a purchase will notice category ads in ways they didn't previously. If you've ever decided to buy a new car you've experienced this effect— suddenly car ads everywhere.
A good advertisement that makes the right appeal will be instrumental in helping elevate a product in a customer's consideration set.
But for long-term brand building, advertising feels more like the guy at the bar using pickup lines. If (and only if) you've got the looks, the swagger and a hell of a line you might come off as charming. But dude, I'm just trying to do Jello shots with my friends to escape the carnage of existence before you interrupted my night with your cringey nonsense.
I believe it was PJ Pereira that asked us to imagine a world where the commercial break never existed and someone pitched the idea to a CMO: okay, so we will pause the content someone is enjoying and force them to listen to our message, then let them get back to their normal program.
First question I'm asking as that CMO is "wouldn't that just make them frustrated with us?"
Does that make me hypocrite because I make plenty of interruptive brand advertising myself? Yes.
But the business world is highly inefficient and imperfect. We use the tools we've got to make the most impact we can. When the alternative is not being seen you've got to do what you can.
I also write really good pickup lines.
But when I can get the buy-in for a better way, I take it.
Branded entertainment requires more effort than advertising, but has less risk of negative salience and more potential upside.
Branded entertainment is about engaging in a positive attention value exchange. Either through media or an experience that people choose to engage with — a film, a short, a series, an activation, a game, a podcast, a zine, etc.
Branded entertainment doesn’t chase—it attracts. It’s like the guy who’s hitting the gym, going to therapy, and volunteering at the community gardens. Instead of fighting for a fleeting moment of attention, he's earning trust and credibility and organically attracting the people around him.
Of course ads can and should be entertaining too. The more important distinction is consent by the parties who are engaging with it and its perceived value to the world.
Are you moving culture or are you interrupting it?
Yes, it takes more effort. Yes, it takes time. Yes, it's harder to track. But the returns are bigger, better, and built to last.
How do you create attention value?
On a high level there are three forms of value we seek from where we invest our attention:
- Amusement – To pass the time and release feel good brain chemicals.
- Knowledge – To make us smarter, more informed or more skilled.
- Belonging – To make us feel seen and validated and not so alone in a lonely world.
We tend to go to the movies and play games for amusement.
We read nonfiction and watch 2-hour youtube video essays for knowledge.
We check-in with friends on social media and immerse in conversational pods for belonging.
And most media is various shades of all 3. They aren't mutually exclusive ideas.
Advertising can deliver on all three too, but the value becomes diminished.
Funny ads are ad funny, not actually funny. Especially when they interrupt the John Mulaney special you’re trying to watch.
Ads that deliver useful information only work for people actively shopping. If you’re not in the market, they’re just noise.
And ads that try to make us feel a sense of belonging? They’re handicapped from the start. No matter how much “authenticity” appears in the brief, the audience knows what’s being done to them.
Branded entertainment flips the equation. It’s actually funny, actually insightful, actually immersive. It doesn’t beg for relevance—it creates it.
Branded entertainment works because it leverages psychological forces that traditional ads often can't.
People don’t just watch great stories—they experience them. This psychological process, called narrative transportation, makes audiences feel like they’re inside the story, creating a deep emotional bond with what they see.
Take A Charlie Brown Christmas. Most people don’t realize this beloved holiday classic only exists because of Coca-Cola.
Commissioned in 1965 as a branded content play, it embedded Coca-Cola into the nostalgia of Christmas without needing to scream, “BUY OUR SODA.” Decades later, that emotional connection lingers and the story stays highly culturally relevant even though its changed hands a few times and the Coke logo dropped off many decades ago.
Compare that to the atrocious AI polar bear ad Coke relentlessly ran this past holiday season. Which one creates a natural positive connection between Coke and nostalgia Americana and which one makes you consciously aware that we live in a consumerist hellscape?
And because branded entertainment increases the likelihood of an emotional response it has a higher degree of positive salience with the brand in ways that advertising can't achieve.
Consider The Last Barf Bag by Dramamine—a self-aware short film that turns a mundane motion sickness product into something unexpectedly funny and memorable. It works because it shows humans with all of our complicated quirks and idiosyncrasies, something rarely found in the artifice of commercials.
Branded entertainment isn't a universal solution, but our entire industry is severely under-investing in it.
Marketing effectiveness research suggests the sweet spot for marketing investment is 60% brand / 40% sales activation.
If you accept my premise that advertising is better for sales activation and branded entertainment is better for brand building, we should be seeing north of $600B in branded entertainment investments in America alone as a percentage of the total advertising pie. We are nowhere near that.
The independent film market is only $7.3B in comparison.
Wouldn't it be nice to invest more in making culture instead of interrupting it? For everyone.
P.S. we also made a nice slideshow about this topic you can check out here: