In the interest of protecting client confidentiality I won't name the town. Recently, however, I was out west in a beautiful spot in the Rocky Mountains working with a company doing extraordinary things in its commitment to lean. Like a few of my other clients they are making money doing what is supposed to be impossible – manufacturing low-tech consumer products and not only selling them in big quantities in the USA, but exporting them. By coincidence I happened to be staying in the same hotel as a film crew.
Thirty four people – count 'em – thirty four of them – were there to spend four days filming 2012 Toyotas driving in the snow. They were not actually filming a commercial mind you – just creating fim footage for an advertising agency that would sit on the shelf in case either Toyota or its dealers wanted to make a commercial that included Toyotas driving in snow. Most of the 34 were flown in from Los Angeles for the task.
A few weeks ago I wrote a piece that pointed out the fact that Ford spent $3.9 billion on advertising in 2010- a billion more than they did on value adding direct labor. They are right in there with the rest of the auto industry and well behind the spending levels at major league advertisers like P&G – $11 billion plus. Now I am sure there is a lot to the advertising game I don't know, but I do know that 34 manufacturing people working 4 full days would create a pretty impressive pile of valuable stuff and I have to wonder exactly what the value is of the product of these folks work. They are basically creating inventory that may never be used.
More important, I know that 34 manufacturing people would be micro-measured and there would be relentless pressure to challenge whether what they are doing is needed at all and, if so, to see how it could be done with 33 people. I have to wonder exactly where is the value in this – and in advertising in general? It seems to me that advertising spending is driven more by conventional wisdom than by the relentless pursuit of data and the continual cost/benefit focus on the operating side of the business. This was at least a $25,000 venture by the time they were finished and what executive would spend $25,000 on a manufacturing investment without demanding precise justification, cash flow and ROI analysis and a comparison to alternatives?
Perhaps I am the odd person out there, but I do not buy cars or beer, book airline flights or do much of anything else based on advertising. (Oh I know that the ad folks would say that I actually do based on some subliminal impact – sounding a lot like the global warming folks who say that blizzards are also proof of global warming – the old, no matter what happens I'm right argument). I TiVo through all the ads I can and hit the delete button on virtually every ad that pops into my email inbox. If the occasional ad sparks my curiosity and I try something I certainly do not decide whether to buy it again based on advertising once I have personal experience with the product.
So I have to question just how a company – the fact that the company in question is Toyota notwithstanding – claim to be lean and focused on customer value and send 34 people into a resort town to take film of cars in snow that create no value at all for its customers?