Wanna know a secret? I know how to tell which products are lucrative, without the need for a crystal ball, a time machine, or a magic wand. For those of you around during Watergate, you’ve heard this aphorism before: “Follow the money.”

Tell you what. Watch TV for a week, and tally up how many commercials you see for specific products. My unofficial survey shows that there are several product categories that take up a disproportionately large number of commercial time on TV:

• Pet food products
• Beauty products (shampoo, perfume, deodorant, etc.)
• Money products (loans, gold, investments)
• Automobiles
• As Seen on TV products

Kind of a strange, thought-provoking list, isn’t it? Let me explain each in turn.

Pet food products, more than just about any other products, are ripe for the influence marketing brings. There’s an old adage about fishing that applies here. Q: What are most fishing lures designed to catch? A: Fishermen. Unless you’re really, really weird, you’re never going to taste dog or cat food. (I’d say nobody’s ever gonna taste pet food, but I knew this drummer who used to eat canned dog food on crackers.) Since you’re never going to eat it, you are really buying the marketing of pet food. But there must be some BIG bucks in this market. I mean, you’re essentially selling things like “beef and beef by-products” (read: all the parts of the cow that no human would willingly put in their mouths…cow anus springs to mind). It’s not hard to see that marketing plays a huge role in selling this stuff.

Beauty products. Lots of money there. What marketers are really using is the ol’ FUD factor: Fear, Uncertainty and Doubt. Fear, that you’re ugly. Uncertainty, that you are not doing everything you can do to look beautiful, and Doubt, that you can’t get there without outside help. In BeutyLand, it’s all about the marketing. Boil it down, and you’re really selling soap, moisturizers and perfume. What makes one shampoo worth a dollar per bottle and one worth ten? Marketing. And if one company can sell a bottle of shampoo for a dollar and make a profit, realize that there are HUGE profits in ten dollar shampoos.

Money is weird. It costs money to borrow money. It costs money to buy money. It costs money to buy things. Money is expensive. But it’s still just…well…money. The one who sells it is the one that gets the vig on the sale. Marketing convinces you that one money vendor is better than another. There may not be a lot of lending going on right now, but the margins are so attractive (selling a commodity with profit margins tied to the perceived value of the marketing message), it’s worth trying.

There may not be a big profit margin in American automobiles, but that’s not because there’s no money to be made selling cars. It’s because of how screwed up Detroit is. Look at one of the Japanese companies, and you’ll see that there’s plenty of margin to go around – for a well-run company. The average profit per car is not too shabby.

When you see some State Fair-style pitchman hawking something, you can be sure of a couple of things – that the products are cheap to make, have some serious markup, and you can find ‘em cheaper from other sources (largely because you’re paying for the TV spots…hey – SOMEbody’s gotta). Is “ShamWOW!” any better than a generic shammy? I doubt it. But they make you feel like an idiot if you buy Brand X. As Seen on TV is your clue that you’re paying for some serious marketing markup.

What does this mean to you and your marketing? Well, if you’re selling one these products, you need to be nice to your marketing guys. If you’re marketing them, you need to realize you’re in the driver’s seat. And if you’re buying these products, you need to realize you’re paying for all that marketing. And when you want to look for opportunities, take a tip from Woodward and Bernstein – follow the money.

This entry was posted on Thursday, February 12th, 2009 at 9:29 pm and is filed under advertising, marketing, media.You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.