Advertising Where There Are No Customers?

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Here's a conundrum: What does it mean when a company advertises for customers... in a place where almost none of its customers exist? Better yet, what if that location is particularly expensive?

A friend of mine recently told me that he was diagnosed years ago with hypothyroidism. He took the medication Synthroid for several years.

One day, he was reading the New York Times Sports section, and saw an as for a law firm that had a class action lawsuit against Abbott Laboratories, the manufacturer of Synthroid.

These types of lawsuits happen all the time, so that wasn't strange at all. In the end, my friend did get a whopping $72 out of it, although I am sure several attorneys became quite wealthy.

What was strange is that over 90% of those with hypothyroidism - and hence over 90% of Synthroid users - are female. But the overwhelming majority of Sports section readers are... male. Why in the world would you advertise where your customers are not?

As always, it pays to look at the incentives. It appears that once the suit was class-action certified and then settled in 2000, to the tune of about $137MM, the law firm really had no interest in finding more claimants. They already have their millions in attorneys' fees, which was the real purpose behind the lawsuit in the first place, and so the nuisance post-suit claimants, who will get $72-111 each, are a lot of overhead and paperwork for the law firm.

And yet, the settlement (and the judge) requires them to notify the public about the settlement over a period of time.

So, they advertise... where they least expect customers to show up.

As Deep Throat / Mark Felt said in Watergate, follow the money. The most irrational behaviour will always make sense; you just need to understand how.