In a tough economy when businesses are slashing budgets and wanting a clear ROI on every Rand spent, there’s nothing like direct marketing to validate your marketing investment.
Direct Marketing and Conventional Advertising
A Glimpse of the Future
By Bryan Halsey
Personally, we at TheMarketingSite.com are delighted to see how relevant our content still is. Thanks Bryan.
Three years from now - or perhaps sooner - the direct marketing scene (the scene not the techniques) will be barely recognisable from that which we know and love today: the carefully delineated, agencies; the internecine warfare; the specialists and non- specialists; and so on, will all begin to disappear.
Why? For several unstoppable reasons.
Firstly, because the techniques and capability of direct marketing will have been rendered so commonplace - b us - that most of the new users will not know how, or where, or w en they learned them... they will simply absorb them as part of their overall learning. For them our beloved methods, our precious specialisation, will be just another subhead in their total marketing budget.
Many will overlook, or more likely deny, that any differences in the disciplines of direct and conventional marketing ever existed. In so doing, they will lose sight of the very strengths of the direct marketer's approach. But it will happen, I guarantee it.
BUT, the conventional marketer's comfortable, established routine is under threat too. Dyed-in-the-wool conventional marketers are themselves in the throes of an irreversible revolution they don't like, and don't understand - a revolution fuelled by the need to target ever-smaller audiences more selectively, to reduce waste and cut costs...the very areas in which we direct marketers excel. We have, in fact, helped to bring about their revolution through the sheer effrontery and energy (and, I would argue, occasional misconceptions) of our own propaganda.
And so, as they, albeit subconsciously, seek to absorb us... and we inevitably continue to impact on them...the stage is set or a totally new approach to marketing: one that combines the very best of both disciplines.
I don't simply mean that each side will mimic the other's methods in some half-learned, half-baked way - which already happening. And I don't simply mean that some organisations will use both disciplines - plenty do that now. And I certainly don't mean that isolated elements (the odd picture or slogan) will stray from one medium to the other to effect some token continuity. I mean working together to achieve a common objective; using rather than blurring our separate skills; accepting each other, and, above all, respecting each other.
At Grey we call it integrated advertising - someone suggested INTER-GREY-TED but that was tacky. The few agencies that can offer it have been called by 'Fortune' magazine The Super Agencies. For today's audience I shall call it TOTAL MARKETING. Tomorrow, mark my words, it will be simply MARKETING.
In a few minutes a case history and how it was achieved, but just let's re-examine more closely why this coming-together is happening. Why it has to happen:
Firstly, the marketing and sociological factors:
The de-massification of markets and media - in the UK not long ago all telephones were black and you were lucky to get one. Today British Telecom needs many forms of communication to sell a vast range of phones to a plethora of sub-markets.
Escalating media costs - decreasing audiences, the availability and certainty of narrowcasting as opposed to broadcasting. Consumer choice.
The high cost of recruiting new customers - plus, thankfully, the growing recognition that lifetime customers are worth their weight in gold. Ford Motors recently computed the lifetime value of a first-time Ford buyer at over $200,000. It makes the high cost of direct marketing suddenly very affordable.
Brand proliferation - leading to ever increasing competition for the same dollar; niche products; own labels; a clamour for survival. In the UK, certainly, retailer power is also a major threat to manufacturers.
Short-term planning - all over the world shareholders now demand their dividends sooner, causing tactics to triumph over brand creation. 15 years ago, in the US and UK, 65% of total marketing budgets went on brand creation, 35% on promotion.
Today, this has almost exactly reversed.
The changing shape of homes and families - ageing population. Ethnic influences. Working wives. In the UK only 14% of homes are now 2 adults and 2 children. 1 in 8 males lives alone (1 in 6 in the US). The old-style mass marketer is being forced to think afresh. No wonder someone said 'lifestyle' advertising is becoming less effective - everybody's promoting the same lifestyle...but it isn't everybody's lifestyle.
The second major factor is, let's face it, our technology. Today we all have computers. Every day they get smaller, cheaper, faster, easier to use, and cleverer. Already the word 'database' is no longer the private preserve of us direct marketers. It's used and understood by all marketers. Today all marketers store customer information in a database of sorts; all marketers know the theory of targeting selected individuals from that database; soon all marketers will be able to measure the efficacy of their promotions; most accept the desirability of communicating individually with their customers - if only they could justify the, costs. At least they have all grasped the theory.
A third reason for the revolution is undoubtedly pressure from the direct marketing lobby. Too many suppliers chasing too little old-style direct marketing work (I'm sure it's happening in Oz too) has turned attention on the conventional brand marketer. This energetic lobby comprises; among others, the world's Post Offices, the computer industry, the gizmo makers, the origami printers, we agencies, our trade associations and, yes, the conference organisers. And young people.
Together this youthful, pushy consortium has done everything to raise the visibility of direct marketing, along with, I would say, many false hopes.
Young people? Yes, they're a major force. Numerate. Literate. Computer aware...they move into the lower rungs of great corporations, quickly latching onto direct marketing and making it their own. In next to no time they secure not only big jobs, but also small empires. Good luck to them, but I wish they knew more about marketing.
Finally, there's the Everest syndrome. "Because it's there". Now that we have the means, and the knowledge, you can be sure that integrated or total marketing will take root. But let me tell you something highly confidential...actually, as yet, there's no great irresistible pressure from the major conventional advertisers to taste the fruits of the direct marketer's approach.
What there is: is what my US colleague George Wiedemann calls a "pubescent awakening". There is, out there, a whole generation of conventional advertisers shyly rubbing up against direct marketing - not sure of how it's supposed to feel or what to do next. All they know is that it gives them a strange but not unpleasant sensation and they look forward apprehensively to doing it properly at some point in the dim and distant future: They're right to be apprehensive. The course of true integration does not run smooth.
Why do I say that? Because true integration requires the merging of two vastly different cultures. Make no mistake, they are vastly different.
For a start, like it or not, there are the old deep-seated prejudices:
To the conventional marketer, direct marketing is automatically a little tacky. At best a tactic rather than a strategy. At worst a tacky trick rather than a tactic.
To the direct marketer, conventional marketers are self-indulgent wimps, scared to have their precious creations subjected to the cold light of accountability.
But behind these prejudices are some very real technical differences: the mass marketer creates brands and brand awareness through emotional images (all the more so on British TV that the world seems to admire so much). The direct marketer pursues leads or sales, by offering reason, facts, information, incentives - and by providing the means for the recipient to ACT.
There are many less obvious differences. Even the people are different. 'They' think of products and markets...we think of people, individual people, receiving our personal communications. We tend to use different media. And when we use the same media we use it differently - with different creative, different media patterns different objectives. Direct marketers, I've noticed, tend to be introvert or else they're aggressive; conventional marketers tend to be more extrovert but, dare I say it, less deep.
Finally there is suspicion. Yes, there are very definitely situations in which our disciplines can, and do, conflict. Take the case of a bank with a million customers, and a million dollars to keep them happy. Which is better, a million dollars blown on a TV burst, or a million dollars of personal contact?
I know where I'd put my money. But then again, take the case of your famous XXXX beer taking over Britain right now - no direct marketer would have known where to begin to create such a phenomenon.
And so, not only do we have different attitudes and prejudices, different technical methods; we have suspicion and even conflict and here am I saying we could soon all be in the same business. Integration, maxi-marketing, wonderful theory but how shall we achieve it without one or other discipline being swallowed up en route?
Fortunately there is some common ground. Modern students of marketing have at least concluded that awareness alone does not automatically result in sales...pumping the customer full of awareness without providing a path for the sale is like filling a cow with fodder and not milking it...a recipe for disaster! What the direct marketer knows how to do is milk that awareness...turn it into cash...connect with the customer... fill the bucket with orders.
Hang on, I hear you say, isn't that what sales promotion used to do, still does in fact? Exactly! I said the direct marketing lobby is pushy - and all because, basically it tamed the computer before anybody else. But doesn't it perfectly demonstrate my central thesis: in total marketing we shall use each other's skills with or without full co-operation.
At Grey we have been working for over two years on developing our capability in this new sphere ready for the day when... clients are ready for it. Here, from practical experience in the US and UK, are 10 tips we've learned along the way:
- To achieve total integration you must have 100% commitment from the very highest levels of management:
- to ensure singleness of purpose
- to encourage co-operation.
- Next, you need a new breed of manager - to unite, enthuse,
oversee and, yes, occasionally referee the specialists a widely
experienced total communications executive someone not narrowly partisan
to one or other discipline.
- You need time. Integrated campaigns take time to produce: the brand awareness component must be
established before the direct marketer puts pen to paper. All sides
must be represented early on. Some good awareness ideas simply don't
translate into direct marketing - and vice versa.
- All sides must be represented early on. Some good awareness ideas simply don't translate into direct marketing- and vice versa.
- Results. The campaign must, of course, aim for awareness, but it must be measurable in sales - not noting or research.
- Don't try and force all the available services down the throat of a project that doesn't need them.
- Budgets - work it out together. It's not enough just to hive
off a token amount for one or other activity. Anyone who's doing that
- Every company needs a Total Marketing Convert - to set up
in-house seminars, keep the company informed, and watch out for
- Integration requires you to be good across many more
disciplines, whether agency or marketing director. Being integrated is
no substitute for being good.
- Systems won't help - integrating is a people art; above all it needs mutual respect - and that's what I'm advocating right here and now.
Finally I'd like to show you what I believe is one of the most exciting examples of total marketing so far produced, anywhere: The HUMANA Story.
We say Humaana, they say Humanna (let's call the whole thing of` Humana's business is private medicine.
Humana has three main divisions:
- day clinics.
Humana are huge, very successful - they were hitting problems. The usual ones of:
- rising costs
but also a confused public.
Not surprisingly, perhaps, since they had no less than 25 agencies (!), including several different direct marketing agencies, all telling different stories, in different ways.
The brief was essentially simple-
Make Humana a household word-
and make it synonymous with:
In addition there were three specific tasks!
- Re-establish the brand character.
- Differentiate and promote the individual products.
- Stimulate activity i.e. sales.
The brand character was developed in TV and press ads. The specific product differentiation was carried out in TV, press and radio. The TV also made direct offers of information. The selling was down to direct mail, and long (2-minute) TV commercials.
First I'd like to show you the TV. First the old TV...three commercials... before integration:
"Cuts" - nothing wrong with it - a bit gimmicky perhaps.
"Phone a Nurse" - a bit more serious - a good proposition... twist at the end.
"Twin Sisters" - convincing start...inevitable twist...the use of humour is another basic difference in our cultures.
Now six new commercials.
First the theme for the entire campaign:
"Theme": "Healing Touch"- a typical good awareness commercial. But it�s about where most conventional admen would stop.
Now - a direct marketing commercial...
- "Seniors/Birthday Party"
- "Save 40%"
- The Brochure
- Telephone Number.
And what conventional advertiser would include a detail like "Pre-existing conditions covered"?
"Golfer" - each target group will be followed up in other media - campaigns within the campaign targeted at different groups.
"Broken Arm" - I wonder how many direct marketers would have been so careful with the casting?... Casting, I believe, is what makes these commercials so effective.
Now a 2-minute direct marketing commercial:
Note the brochure demonstration again. Overlooked by so many mainstreamers, the brochure was actually the hero of this commercial.
Finally the theme again, the thread that runs through all these commercials.
True integration calls for:
- continuity of image
- consistency of message
- evenness of production values. Seamless in fact, there's another word for it.
Remember: there were two distinctly separate teams at work here, each with their own skills, knowledge and objectives. Working together under a good all-rounder.
I think they pulled it off. What do you think?
Now for the rest of the materials...
Press ads used images directly from the TV. By the way, getting hold of stills from the TV shoot is one of the special requirements of integrated advertising - harder than you'd think!
Now some direct mail. Tests showed that personalities from the TV increased response by 30% when used in the mail follow-ups, especially in the envelope.
The TV link was so strong that even cold mailings were successful - and that happens as rarely in the States as it does here.
Properly integrated advertising has many advantages:
- Each minute impression contributes to the total image.
- Continuity of message, one tone of voice, helps to cut through the clutter.
- Specific product jobs can be done within the branding framework.
- in planning and budgeting
- in forming the strategy
- in creative and execution
- in media planning and buying.
- in results evaluation.
It can be done.
Here's how Integrated Advertising has been described by another of my US colleagues:
"The last legal means to achieve an unfair advantage over the competition".
To begin with, this campaign met all its objectives and was a tremendous success; but, here is perhaps the most important single lesson I can pass on to you, because Grey felt they had the problem cracked they formed a single team to take the business, led by conventional marketers and containing only direct marketers who were not in themselves leaders. The results began to slip immediately.
Remember: these are still different disciplines. It will be a generation yet before integration-comes naturally. Meanwhile, as I said, it requires contact from the very top all the time until such time as we have a new breed of max-marketing man or lady to ensure it works. Perhaps you will be one of those.
Ladies and Gentlemen, integration is not blurring or losing but keeping and using our separate skills - working together.
An online presence can take several forms and have any one of multiple objectives.
First published in 1995, the report is released every other year in conjunction with DMA’s Annual Conference and delivers historic trends, current year estimates, and one-year and five-year projections for direct marketing expenditures, sales, ROI and employment.
In the recent past, the position and relevance of direct marketing (DM); in the information age has been viewed as a 'dying' facet of the advertising industry. However, research and trends have proved that direct marketing will have an impact on the economic growth and lead the industry in one-to-one marketing.
Steve Cuno from Response Advertising, USA, says: "Whenever I'm asked to sum up the differences between traditional and direct response advertising, I oversimplify it: Traditional advertising seeks to create positive awareness of a product in enough minds so that your target market will eventually reach for your brand. Direct response advertising improves on that."