Exploring Marketing Technology
All opinions are my own
Improving the response rates in every direct marketing medium: Print, Online, Direct Mail and Broadcast
Years ago a mentor told me that in consumer advertising, there are many motivations for someone to act. But when you’re talking to someone about a product or service for their business, the motivations are less varied. In fact, they boil down to two:
Period.
That was nearly 20 years ago. A lot has changed, but I cannot see any evidence that this has changed at all. Your thoughts?
Not all online marketers can make this claim, but if you peered into my soul (or some would say analyze my circuitry), you’d see a direct marketer. I’m proud of it. And I feel vindicated when I read articles like today’s in the Advertising section of the NY Times. It’s about LowerMyBills.com and how they’ve annoyed millions with their silly online ads. And made a fortune. Here’s an excerpt:
The company, one of the Internet’s biggest advertisers, routinely festoons Web sites large and small with its ads, spending $74.6 million on them in the first 11 months of 2006, according to TNS Media Intelligence. The surprising success of the ads led LowerMyBills to a significant payday: the credit agency Experian bought the eight-year-old company for $400 million in 2005.
But on the path to prosperity, LowerMyBills has run into a lot of people who say the undulating characters in the ads are highly distracting and have so little to do with low-interest loans that they border on the surreal.
The most memorable LowerMyBills banners feature silhouetted dancers like the prancing cowboys, or the couple doing a jig on their roof under a full moon.
As a direct marketer, I know that the only way you can tell if an ad is working is by testing. And there is little logic to what works and what doesn’t.
My background as a direct marketer makes me passionate about the opportunity that the web provides to test many creative concepts and refocus spending on the best of those, in a matter of hours instead of weeks (as is the case with direct mail). This same background makes me quite boring. When I client says, “Should we do it?” — whatever it is — nine times out of ten I have to tell them, “Let’s test!”
Congratulations, by the way, to James Gardner, whose online “hobby,” Adverlicio.us, got him some ink in the article. He’s a great guy and deserves all of the attention this article is sending his way.
Â
Today I had lunch with my friend Don Buck of Buck Marketing. He owns a list brokerage. I was explaining why I had not yet installed the program he swears by, Trillian by Cerulean Studios. It’s a way to aggregate all of your instant messaging (IM) identities into one account. That way, regardless of which system someone wants to reach you in — AOL, MSN, Yahoo, Google (Jabber) or a less popular IM account — you can receive and send through one account.
Pretty clever. But it was a solution to a problem that I don’t have.
I only have Google IM, and that’s primarily to communicate with my team members. Few people beyond my coworkers are in my Google buddy list, and I have no need for other accounts. Don said, “That’s interesting but not surprising. I find that my contacts in the email marketing industry use IM to do their work, but those in direct mail use email.”
I have a theory why. Direct mail takes weeks to plan and execute, as do most other marketing projects nowadays. Passing information via email is sufficient to meet those types of deadlines.
Email projects are usually more immediate — at least when you are in the execution stage. We’re talking lag times of days instead of weeks. IM may be the only collaboration technology immediate enough to keep things on track and still keep a record of what’s discussed (otherwise you can just pick up the phone).
Or perhaps it’s something else that turns email marketers away from their lingua franca. Perhaps those who send emails for a living can’t bear to lean heavily on that medium to manage the projects. Sort of like the guy who makes donuts every morning never wanting to sample his own work.
Actor, comic and screenwriter Steve Martin wrote the character of God — or at least an omniscient sage — into his 1991 romantic comedy L.A. Story. This is car-centric Los Angeles he’s talking about, so the voice of God wasn’t in the form of a burning bush or an intervening angel, but was the flashing lettering of a freeway sign. Instead of the sign reporting the typical warnings of delays, it gave the lead character personal advice and admonishments. Our star eventually heeds these digital messages, and his own personal heavy traffic magically lifts for a happy Hollywood ending.
I was reminded of this when I pulled to a stop at a notoriously busy intersection near my home. There, in the muted half-daylight of dusk, was a glowing billboard so rich in color and crisp in detail that it almost seemed to open my door and climb in beside me. I was riveted.
This was a new digital billboard by Lamar Advertising. Both Lamar and competitor Clear Channel Outdoor have posted these LCD boards in my city, along with many others. Over coffee this past Sunday, a friend of mine mentioned the sighting of one of them. They are noteworthy enough that their arrival gets people talking.
It also got me thinking.
LCD billboards grab attention by their picture quality and brightness, and also by the fact that they can rotate ads as frequently as every six seconds. These boards have helped fuel incredible growth in this ad category, called out-of-home advertising. The category is second only to Internet ads in terms of its growth. These boards have also fueled traffic safety concerns, as reported in this recent New York Times article:
“There’s a perception in the advertising industry that you have to up the ante,” said David Zald, assistant professor of psychology at Vanderbilt University. “We see so much information coming at us that for it to actually leap out and capture our attention, one has to go at a more salient level than you used to.”
But, he added, “there’s a trade-off between the advertiser’s need to grab our attention and the actual safety implications of that attention capture.”
It’s a real concern, especially when the signs are new to a particular roadside. But the danger caused by their novelty will fade. Perhaps their introduction can even be made less jarring by slowing the rotation time — less to gawk at, and thus, more time to think about driving.
What really got me thinking was how a formerly analog medium can work harder when it goes digital. I’d like you to consider for a moment a digital billboard that’s smart enough to anticipate traffic speeds and potential dangers. There are a couple of methods being tested now using things like anonymized cell phone signals to better understand in real time the traffic speeds and conditions of pinpointed stretches of road. Using this sort of information, the signs could respond. When traffic speeds up, rotation could be throttled back.
Now take that traffic-sensitive capability a step farther. Remember, these digital billboards have essentially taken a two-dimensional ad medium and added the third dimension of time. Driven by a computer, anything can be served up on a board, and changed at any time (sometimes the computers fail, with comical results).
What if, when traffic slowed to a crawl, a message was flashed that drivers could respond to immediately, with their cell phones. When you’re bumper-to-bumper, it’s easier to manage a phone conversation and still remain safe. This slowly passing line of drivers would be flashed direct response offers that they have the capability — and free time — to respond to immediately.
Anything that eases their frustration with the wait would drive interest and action. As a public service, and as an added incentive to make the call, the end of the recorded message that consumers would hear would be specific information about the cause of the slow-down — an accident, stalled car or construction — along with verbal instructions on what might be done to ease the slowdown.
Is this smart? Dumb? I’d like to know. What do you think? One thing I’m quite sure of. This idea absolutely cries out to be tested.
This year, ROI (return on investment) has become a battle cry for marketers in every industry. On this, the last day of the year, I’d like to present a Digital Solid award to the marketing medium that has shown the best overall ROI in 2006.
And the award goes to … the envelope please? [sound of ripping paper] Well, no surprise here. Once again it’s that marketing workhorse, direct mail.
Yes, with all of the marketing technology tactics going – including those with incremental costs in the pennies (e.g., email marketing) and precision targeting that is a direct marketer’s dream (e.g., search engine marketing) — the trophy goes to the grand dad of them all.
Direct mail marketing continues to generate returns averaging between 13 and 16 times original investments, as measured by Direct Marketing Association research. This is as reported by The Winterberry Group, in its December, 2006, white paper on vertical marketing trends in direct mail. Professional associations have been known to puff up their numbers, but these don’t particularly surprise me.
I have several friends who manage multi-million dollar annual direct mail budgets. Each is in a different business category. None of them likes what they have to spend on the medium (postage, printing and lists are all going up faster than inflation), but they all report results that far, far outpace this spending.
What does this tell us about the future of marketing technology? Do we abandon online and mobile techniques and begin (or resume) pouring resources into direct mail? No way. The same Winterberry study emphasizes diversification of techniques and their careful integration. I and my friends agree with this recommendation: Direct mail yields the best ROI when complemented and supported by other media.
It’s also no accident that direct mail marketing is the most mature of measurable marketing technologies.
As other techniques “grow up,” we’ll see them morph and focus, just as direct mail has. Guided by smart marketers and the feedback loop of a well-designed CRM database, other media will evolve to be as effective as direct mail. With lower incremental costs, other media will quickly surpass direct mail in terms of ROI.
Watch this blog in 2007 for up-to-the-minute news on how other media are faring in their progress at delivering improved ROI. It will be an exciting race to the 2007 award, with many promising contenders.