- Greg

I admit, it’s a strange notion, but not completely crazy. The basic reasoning, as I understand it, is that the internet has made direct marketing exponentially more efficient and therefore there is no reason to “waste money” on brand image.

Utterly mistaken, but not totally insane.

Thanks for your comment.

- Greg

Thanks for a great story. I’m a true believer in the media multiplier. The real media trend is toward media diversity:-)

- Greg

Having owned a couple of “traditional” ad agencies myself during the 80s and 90s, I’m now working primarily in the zeitgeist of online video abd web-based marketing systems (www.voodooviral.com).

I can say without reservation that traditional media and branding expenditures won’t (and can’t) go away. At the same time, I can also say that the process of enhancing brand equity and legitimizing a company and its products and services can be built in the online marketing process, depending on the business model you subscribe to.

One of my company’s clients launched a new product under a new company name about two years ago. They bought regional radio to drive traffic to a video-enhanced website that romanced the brand equity initially generated by the radio campaign.

From the beginning, the site has been converting over 10%, and often as much as 15% of unique visitors into buyers. Most of them come from radio, but many come from social media and blogs, along with a smaller number from SEO links and PPC.

But it’s what happens after the initial purchase that really makes things interesting. Our systems automate the company’s post-sale outreach, carrying video messages thanking the customer, explaining how to use the product, offering encouragement at the moment they’d otherwise be likely to stop using the product, offering discounts to keep customers well-stocked, surveying them about their satisfaction, asking them for product and packaging improvement ideas. Finally, after 3 months of automated hand-holding and trust-building, the systems offer the customer an auto-ship option.

This company is effectively selling without a sales force. Their product returns are negligible, which is pretty much unheard of in the DR world. 62% of recipients fill out the survey, and over 40% commit to an auto-ship subscription. And because of the way these web-based systems work, our client always knows exactly who’s opening the emails and watching the videos.

We watched the company grow from 0-$2 million sales in year one. Then, as they bit off additional regional radio markets, they grew from $2-10 million in year two. Still no sales force needed. Still less than 1% product returns.

This year, now that their manufacturing operations have been geared up to handle additional demand, they’re shooting for $50 million in sales. A chunk of this new business will be generated by the implementation of a new video-enhanced (and measurable) pass-along system we call “Referral Magic.”

What I find interesting is that even though the company’s web-based presence and tools (website and Voodoo systems) are handling so much of the brand-building, sales and post-sale customer experience, it’s doing all that work at a tiny fraction of the cost of the radio ad spend.

Based on documented success like this, traditional brand-building media and online sales and marketing (DR and post-sale outreach) can and should go hand-in-glove, and probably will for a long time to come.

Great points. Thanks for sharing them.

- Greg

New media is still growing a bit too fast to consolidate as an industry, but you’re right in that “merge to win” seems to be the new strategy. Instead of russing toward an IPO, strategic investors are in vogue.

- Greg