Ted Grigg's Reflections about Direct Marketing

I grew up in the direct marketing world starting with advertising agencies then moving over to the client side where success depended upon proper application of the discipline. But with everything changing faster than ever, I think we must sit back for a few minutes and get our bearings.

Let’s revisit the definitions of what direct marketing was to the earlier practitioners of the trade. The chart below does not represent all of the definitions out there. But the authors of these definitions represent some of the best-known leaders in the business over the years. (Double click the image below to enlarge)

Yes, direct marketing elicits some form of response. it tracks response, applies testing as a core strategy and uses all available media to solicit a response. All of these tools characterize the direct marketing discipline.

So we are left with determining if new media fit this definition. For example, is the new “social media” concept a direct marketing strategy? Is this activity trackable or is there a “measurable response”? I submit that if this effort is not measurable, then it no longer qualifies as a direct marketing strategy.

Some online activities may require the creation of an entirely new discipline that does belong to any established marketing category. If forced to categorize it, then I would place it in the branding camp.

The measurability dilemma existed long before the advent of new media. And the explosive growth of the Internet has made the quantification challenge more complex.

Could you help expand on this idea of where these new applications Internet belongs? Clearly, some aspects of online marketing fit comfortably with the trade. But there are new ideas about how marketers should view the selling challenge that do not belong in the direct marketing camp. What is your view?

According to TNS Media Intelligence, Internet marketing spending should grow by 13.4% in 2008. But strikingly, the research also confirms that the total marketing dollars spent on the Internet represents only 7.2% of the total amount spent on all U.S. advertising. The total US advertising budget is expected to hit $153.7 billion.

So looking at online marketing in the US, traditional marketing dwarfs the Internet. Online marketing is apparently still in the early adopter stage for many companies.

According to Knowledge@Wharton, there are a number of reasons why online spending has not grown as fast as some expected.

In their article of February 06, 2008 “If Online Marketing Is the Future, Why Are Some CMOs Stuck in the Past?” Marketing Professor Peter Fader makes this statement.

"When bad times come, people say, 'We can't abandon the brand. We can do those customer-centric things next year.' The CMO will stay with the skills and responsibilities that he has traditionally relied upon."

At the end of this article, Fader implies that CMOs are behind the times and are indeed stuck in the past.

 “Too often, Fader notes, CMOs delegate their web-oriented customer-tracking initiatives. He has a set of test questions about customers that he often asks marketing executives, such as, 'What is the distribution of repeat purchases across your customer base?' or, 'Of all the new customers you acquire this year, what percent will be with you a year later?' Many proudly reply that they have systems in place and can get the answer in a few moments. That's not good enough, says Fader. ‘You need to know it. If a CMO does not have a good sense of this, all the talk about customer centricity is just lip service.’”

The truth of this statement is nothing new to direct marketers. We have experienced low adoption rates for the direct marketing strategy at every turn for the same reason.

I am not talking about what some companies loosely call “direct marketing.” But rather adopters of the full spectrum of the direct marketing strategy including testing, database marketing and CRM.

CMOs have historically focused on branding and the big picture avoiding the trenches to learn more about their customers’ purchase behavior patterns. Analytics has never been their strong suit.

Have you ever noticed how many companies still do not see the urgent need to build a true relational database? Those that don’t are starving for reliable marketing intelligence. But that is the modus operandi for many CMOs in corporate America.

I submit that the barriers that are slowing online adoption rates reflect the same barriers that have caused lower than ideal adoption rates for the direct marketing strategy in many companies.

The online revolution is the zenith of direct marketing if done correctly. Yet customer centric spending goes begging.

CMOs are not just stuck in the past. Some will not do what is required to make more of their advertising dollars fully accountable.

The pressure is on for making all spending accountable. But this intimidates both general agencies and their clients who have not yet mastered tracking and full accountability for their advertising budgets.

The Internet leverages the power of the database and direct marketing discipline like no other medium. But to reach maturity in many companies, it will require a transformation not only of the CMO, but a new thought pattern for the senior executives who hire those same CMOs.

Most CMOs are, after all, a reflection of what their managers demand.

Do you think, as I do, that some marketing decision makers “either believe in the effectiveness of the branding strategy or don’t regardless of the evidence?” and that “they either believe in the one-to-one marketing strategy or they don’t regardless of the evidence?”

Have you seen resistance to the new media by some of the CMOs you know or work with? Do you see a correlation, as I do, between the adoption of online marketing and the acceptance of direct marketing as a critical component in the advertising mix?

I’d love to read your thoughts on this.

In his excellent Direct Creative Blog, Dean Risk recently posted an insightful article entitled "Reports of the death of advertising as we know it are greatly exaggerated."  In the following paragraph, he responds strongly to the now popular idea that disruptive advertising, or advertising that is not controlled by the consumer, is fading away in the Internet age.

“My prediction? People love and respond to advertising far more than they’ll ever admit. And the interruption-disruption model may be tinkered with and modified, but it will never die. Ever. Because no matter what you call it, selling means pushing products. And if you aren’t pushing, you aren’t selling. And if you aren’t selling, you’re out of business.”

Here is my comment to Dean about the unchanging nature of what I choose to call “disruptive marketing.”

About Disruption Dying Out ---

Disruption is fundamental to all communications, not just selling. Every time we ask a question or talk to someone, we are disrupting his thought process or something he is doing.

Think of how the world turns --- the mall-intercept interview, the dog that wants to be petted, the sick child, the gardener knocking on the door for his check, the e-mail asking the recipient to complete a questionnaire and so on. Some interruptions are not pleasant, others are.

That's the way it is with selling products. Some we like and don't mind the interruption and others we don't.

And as you say, this activity is as old as man himself. It will never go away.

If companies ceased disrupting and interrupting, then they would cease selling. But no one ever should think that these disruptive activities are always distasteful.

It is true that some distasteful interruptions are dying out such as door-to-door selling and unwelcome phone calls. These were indeed out of control. But other means of communication like mail and online (except for email) are easily controlled by the customer.

New, distasteful disruptions have come with the growth of new media. Nine out of every ten emails bombard the inboxes with spam and the problem continues to grow in size and complexity. And the Internet has enabled identity theft to grow to epidemic proportions.

So things are changing, but consumers are hardly getting more control over every aspect of their new age lives.

What works for print advertising, direct mail, DRTV and other traditional direct marketing advertising works with new media. People still respond to strong offers, certain words, longer copy and proven formats regardless of the channel used to communicate the message.

The chart below begins the process of cross-pollinating the learning from the traditional direct mail medium to email. Admittedly, this chart is far from complete. But at least it starts the dialog for more discussion on the issue.

 
It amazes me how little some online marketers who were raised in the online media world know about what works in the direct marketing creative realm. They know a lot about the technology and the importance of how emails are rendered by the various email clients on respondent machines. They also know about the importance of their corporate reputations with ISPs, the analytics of email response (sometimes) and spam control. But some have learned little from their more experienced peers on the traditional side about what elements make their direct response messages pull maximum response rates.

This is understandable since marketers today have to wear many hats regardless of what they know well. So just getting the work out becomes as much of a priority as getting it done right.

But this lack of knowledge also means that inexperienced direct marketers do not know what to test and what tends to impact response unless they just happen to run into it by accident.

So this chart begins the process of demonstrating the correlation of what works in the traditional direct mail channel when compared to email.

What other things are similar? Have you found through A/B split testing what elements impact email that has no correlation to traditional media?

This perennial question came up on LinkedIn’s Q&A where members ask questions of their network. The last time I checked, there were 17 answers to this question.

Isn’t it interesting that the person posing the question grouped snail mail and email in the same question? The answers tended to either agree that good direct mail also makes for good email.

Others answered the questions by specifying the channel.

Here are a few edited excerpts of the answers.

- A familiar address, one I personally know. Beyond that, little else. Afraid many folks are growing quite immune to spam mailings these days.

- 99%+ of the time, if I don't recognize the sender then I delete the Email or flag it as spam.

- For Direct Mail---yes, the stuff that gets put in your post box. The challenge is getting people to 'open' it. I believe that post cards are the best bet to grab attention.

- Unfamiliar email simply gets deleted without opening. As for postal mail, the messaging, color, design and timing may sway me. Unfortunately, it's such an overused tactic that getting bombarded electronically and paper based just annoys me.

- You usually just open and look at those who have your interest. My conclusion is that i don't think it's right when someone says they only look at mails that have a familiar address. You look at what your brain sees as a common interest and what you "need" to know.

- Unless it is from someone I know it gets deleted.

- For direct mail you mentioned the word Open. In my opinion an envelope is a barrier and you’re asking the customer to take additional steps to see your message. Unless the address is hand written and a real stamp is applied then it will get trashed 99% of the time with the envelope never getting opened. I think an oversize card is a better option. This way the customer will at least see your message and make a decision on how to act on it. Granted this decision is made in about 2.5 seconds but with an envelope the decision gets made without the consumer ever seeing the offer.

- I have one test. A familiar email address, or the expectation of receiving an email from a previously unknown sender determines whether I open an email or not.

What reaction do you have to these answers? Do you have valid testing to substantiate any of them? Where do you agree or disagree?

In the October 22nd, 2007 issue of DM News, Mike Maguire, CEO of Structural Graphics wrote in his article entitled “Integration of the senses” that he was surprised that 2006 saw direct mail spending increase by 7.5% and 2007 growing by nearly as much.

He further adds that the Direct Marketing Association reports that half of all Americans prefer to receive advertising by postal mail.

It makes you wonder how paper communication fares so well in the face of the online explosion.

He proposes that consumers use all of their senses with messaging including sight, sound, touch, scent and taste. And successful marketers use as many of these senses as possible to convey their stories and break through the clutter.

 
Three-dimensional direct mail leverages the sense of touch to full advantage. Maguire quotes from a Time magazine advertising survey that 91% of readers recalled a dimensional advertisement versus 51% recalling a “flat” advertisement.

But I think there is something else that strengthens the impact of direct mail.

Due to it’s escalating cost, more demanding execution and relative rarity, direct mail appeals garner more attention from recipients than the same messages found in their crowded email inboxes. With the explosive growth of email, printed direct mail has now gained more respect among consumers.

In addition, direct mail is more intrusive than the Internet that relies 100% on the consumer to access the advertiser’s web site.

What are your thoughts about the strengths and weaknesses of traditional channels versus online?