The State of Advertising as Seen Through the Eyes of a Direct Marketer
For years, I've seen direct response TV advertisements that sell everything from vacuum cleaners and kitchen utensils to jewelry. Direct marketing newspaper, magazine and direct mail advertising now typically omit response coupons in favor of the toll-free phone numbers and landing pages. Even the Internet has strongly embraced the direct marketing strategy.
But this type of direct response advertising pales in comparison to the volume of advertising that creates awareness or positioning advertising in all channels (except perhaps the Internet).
I've always wondered why that was.
Perhaps it is the budget accountability required with the practice of direct response that does not appeal to agencies or some CMOs. Even today's social media craze requires little in the way of accountability for the effort and budget spent to maintain it. Awareness and positioning advertising strategies make sense as does social media. But how much of your budget should you allocate to these approaches if you do not connect them to sales?
I think those budgets get easily out of control.
On the other hand, direct marketing strategies are nowhere near their zenith in the marketplace. That may be because most advertisers do not understand database marketing and direct marketing to leverage their incredible moneymaking power.
Here's what I see as a direct marketing strategist when I look at the whole of advertising.
Poorly understood direct response strategies.
An unhealthy attraction to anything that appears new.
A lack of respect for the importance of the company's customer and inquiry databases.
A predilection to approve ever larger marketing budgets without requiring quantifiable proof that they achieve corporate sales goals.
The fundamental principle underlying all advertising is its ability to acquire new customers and retain existing ones at an acceptable cost.
Here are a few examples of how direct marketing campaigns require accountability for results to survive.
Direct Response TV (or DRTV) advertisements must meet an allowable cost per sale. Successful DRTV advertisers test many spots against each other. They also check the CPS (Cost Per Sale) results by the local station on a minute to minute and day to day basis. DRTV schedules expand or shorten based on actual sales results.
Besides DRTV, you’ve seen hundreds of direct mail pieces in your mailbox. There are direct response postcards that offer a free phone if you sign up now for a 2-year mobile contract. Others push Internet subscription services with 90 days free for a one-year subscription. These postcards usually contain big headlines and a couple of paragraphs of copy.
Other mailers come in the form of the classic #10 envelope package with long letter copy, a brochure and a personalized response form. A/B split test results should determine the control format used by an advertiser.
Again, these results are evaluated based on an allowable cost per sale or cost per lead. Yet many small and large advertisers cannot answer “Yes” to most, if any of these questions.
Are you testing offers, mailing lists, and other media to establish winners?
Are you tracking response by customer, by offer and by medium?
Are you using broadcast and print as awareness builders? If so, have you considered converting some of your brand or positioning advertising to direct response?
Are you giving proper results attribution to all channels in making a given sale? For example, did SEO or your direct mail piece take the prospect to your e-commerce website to buy your product? Are you tracking all leads and sales based on an offer? Does your DRTV offer differ from the one made in your direct mail piece when they are run concurrently?
Do you have an allowable CPS or CPL (Cost Per Lead)? Many large advertisers cannot answer this basic question.
Are you testing and evaluating costs per sale for all available channels such as online, direct mail, DRTV, DRradio, print and so on regularly?
Advertisers sell through many channels and make various offers. But does this qualify them as direct marketing? No, it doesn't. They could dramatically increase their ROI by applying all direct marketing strategies.
One of the most important strategies is A/B split testing, regardless of channel. It is also the most underused direct response tool. Why is that so?
I think many advertisers do not test because they have not developed an allowable CPS or some similarly quantified evaluation tool. Either that or they do not understand the critical importance of incremental improvement that drives successful marketing programs.
Once your evaluation tool is firmly established, then take every opportunity to test the following items across all channels. This represents a partial list.
new offers
new channels
new mailing lists and target markets
a variety of direct mail package formats
different creative approaches
DRTV spot lengths
Over time, your best channel and creative execution will weaken. Don't get caught dead in the water with marketing approaches that no longer work. Aggressively test to stay on top of your game.