The Problem with Direct Response Marketing
There are many today who advocate direct response marketing to the exclusion of other marketing channels. These are very silly people.
The problem isn’t that direct response marketing (which I define as advertising with a concrete offer and a measurable response mechanism) isn’t important and necessary. It’s just not sufficient. As a matter of fact, it isn’t even close.
The real issue isn’t what direct response measures, but what it doesn’t. Those that ignore other marketing channels either aren’t aware of the facts or are just not thinking clearly.
The Allure of Direct Response Marketing
The case for direct response marketing is logical: Why waste money on lots of fuzzy concepts when you can directly spur sales and get clear, measurable results? Unfortunately, the results aren’t as clear as they might seem and branding isn’t as nebulous as direct response advocates often claim.
Firstly, direct response campaigns vary widely in their results. Some of this is due to how well the campaign itself is executed, but a lot has to do with how strong the brand being promoted is and what other promotion is going on at the same time. Marketing channels work better in combination than they do as isolated entities.
Secondly, branding metrics are as measurable as anything else. Many corporations regularly track their brands and can access brand data as easily as they do sales data. You can be sure that successful, profit oriented enterprises wouldn’t continue to do so unless they had clearly established a link between the two.
In truth, there is a lot more to a purchase than simply seeing an offer and responding to it.
The Path to Purchase
It has long been known that the purchase decision is much more than an event, it’s a process. The evidence for this is overwhelming and there are a wealth of frameworks to describe it (the agency that I work for describes 7 stages in the purchase process).
The following is my own summary, which is probably no better nor worse than any other.
Awareness: Awareness is probably the most overused term in marketing, so much so that it is often meaningless in common usage. In actuality, it is a blanket term that describes a variety of metrics, including aided and unaided awareness, awareness of brand attributes, etc.
Nevertheless, awareness is quite important and has been linked to brand usage. Although some skeptics point out that brand usage itself promotes awareness and the relationship is somewhat reflexive, awareness is something we can directly control and raising it increases sales.
Another issue is that many brands have nearly total brand awareness, so there is little utility in increasing it. However, even for the biggest brands, awareness of brand attributes (i.e. quality, value, taste, safety, etc.) remains an important factor for sales and again, raising awareness of an attribute that is something that is highly actionable.
Many direct response advocates point out that direct response produces awareness as well as sales and this is undoubtedly true. However, it does so much less efficiently than mass media and doesn’t communicate brand attributes as effectively.
Consideration: For most categories, consumers develop mental consideration lists (usually 3-5 brands) from which they will make their final purchase decision. While the consideration phase is less important low involvement categories like potato chips, it is essential for durables.
Take a car purchase, for instance. Let’s assume that consumers buy a car every 3 years, surely they will not respond to an offer for the majority of that time. They will only do so when they are actively in the market (usually the last 6 months or so). During the rest of the time, they are building their list.
Ask someone who is starting to think about buying a car. Inevitably, they will be able to rattle of a handful of brands that they are going to research further. Buying a car is a big deal that requires a lot of research and involves a lot of money, so consumers will use their lists to filter out other brands.
Consideration is a synaptic, emotional process, so direct response is not well suited to this phase.
Trial: Okay, this is where direct response marketing really shines. You can get people to try your product even if they weren’t aware of it or considering it before. If it’s really a standout product, you might be able to turn them into loyal customers.
However, it should be obvious by now that this won’t be very effective in isolation. People tend to respond to offers from brands they know better than ones they don’t. This is a big reason why some brands direct response campaigns perform so much better than others.
Loyalty: Many categories are essentially portfolios. People tend to frequent several restaraunts, drink several brands of soft drinks etc. Most families even have more than one car.
One way of increasing revenue is to market to current customers in order to increase your share of the consumer’s mix. Direct response marketing can be effective here, but so can a lot of other things, including events and TV.
Another aspect of loyaty is switching, which is often price driven. Many of the same channels that are effective for promoting loyalty work to promote switching too, but the messaging of course needs to be vastly different.
Advocacy: The ideal customer is one who not only buys your product, but goes out and recommends it to others. Non-traditional promotion such as events and social media thrive in this area and it’s tough to see how direct response can play much of a role.
Just like the previous stages, advocacy has specific metrics that can be monitored. The most popular is the Net Promoter Score, however it is fairly new and there are some detractors. This article gives a good overview of why some are skeptical.
Nevertheless, advocacy is increasingly recognized as an important marketing objective, however you want to measure it.
The framework described above is fairly basic and I don’t think many professional marketers would have much of a problem with the basic logic. There are, however, other approaches which have proved effective. One is recency planning, championed Erwin Ephron.
The basic idea is that the most effective ad is the one seen closest to purchase and we have no idea when that purchase will happen. Therefore, we should minimize campaign weights and seek to be on air for as many weeks as possible.
Many people believe that recency is an argument for certain types of direct response marketing (some consider point-of-sale a type of direct response channel). However, it isn’t. In fact it is an argument for efficiency and therefore favors mass media.
Again, we run into the same problem: response mechanisms cost money and there are other ways of monitoring marketing effectiveness. One of the reasons that cost-per-action pricing never took off on the web is that most marketers feel they can optimize conversions better themselves.
Who’s asleep at the wheel?
Before I sign off, I want to re-emphasize that I have no problem with direct response marketing. I do, however, have a big problem with the notion that there is no other way to monitor marketing effectiveness.
For each stage of the path to purchase described above there are well established methods of monitoring and a variety of solutions for different marketing problems. Direct response is a perfectly viable one for some marketing tasks, but absolutely deficient for others.
In my many travels there are two things that I’ve found no shortage of: Different ideas about how to do great marketing and incompetent jerks who think they’ve found the one, true path.