Isn't It Ironic? Technology Advances Bring Marketing Back to Basics
By Joan Ritter, VP, Direct and Relationship Marketing at Slack Barshinger
Direct marketing can be considered the unremarkable workhorse in a stable of flashy new thoroughbred media approaches. But under the headline of “What’s old is new again,” direct marketing in all of its visages has once again emerged as a contender at the finish line.
Huge leaps in technology, together with the instant gratification of real-time campaign measurement in Internet marketing, have converged to bring the issue of marketing accountability to the front page of the business section. And out of all of this comes the unlikely juxtaposition of high tech with snail mail in a performance race to end all.
Forbes’ (May 23, 2005) coverage of Dell’s success in implementing a 1940’s statistical approach called the Taguchi Method to increase marketing ROI is just the latest headline to call interest to the power of direct marketing. The Taguchi Method is basically an approach to experimentation that seeks to streamline test designs. The objective is to design a test that balances two needs—achieve a minimum number of test cell variations while ensuring that the validity of results are not compromised. The fact that the approach Taguchi developed fifty years ago is used to simplify product design testing by major companies, such as Kodak and Ford just serves to provide high-tech intrigue to what is really just a tough math problem.
The gist of the article is that a statistician is publicizing the utility of this approach to design complicated online direct-marketing campaigns that reveal the ultimate combination of marketing variables to spark a consumer’s attention on the Internet.
Ho hum. These same challenges that have faced direct marketers for decades have become boardroom conversation as the Internet lowered the point of entry for marketers who would never have considered using a marketing approach as lowly as direct response. And isn’t the Internet really just the newest direct-marketing medium?
For decades, direct marketers have labored with their calculators in the back room, striving to maximize sales and leads generated via direct marketing campaigns. They design in-market tests that pit various elements of a marketing campaign in head-to-head performance tests. Elements to be tested can include the obvious—manipulation of pricing or discounts and perhaps the use of an incentive or premium to motivate more people to take action. Less obvious tests may include varying the size or shape of mailers or switching headlines as well as other copy points.
It is interesting that what has remained constant in direct mail and Internet alike is the acceptance of the longstanding tenet that it is the quality of the mailing list, not the more exciting creative variables, that is overwhelmingly the biggest driver of success. In the Internet world, the selection of a Web site takes the place of the mailing list in significance of impacting results.
So here’s the irony. When it comes down to performance, at the end of the day, more often than not. it is direct mail over digital marketing that comes out the winner. It seems to defy logic.
At the front end you would assume correctly that Internet marketing is fast, easy and relatively inexpensive. Certainly less expensive than printing and postage. And just about anyone can find a resource to put a banner ad together. There really isn’t much copy to stumble through. And wouldn’t at least 10% of onsite traffic be interested in what you have to offer?
Here’s the story. Even with the rising costs of paper and postage, tried and true direct mail can significantly out-perform even the snazziest online campaign. In the contest for lowest cost-per-lead, best conversion rate or highest customer lifetime value, the math is easy enough for any CEO. And the immediate link of these direct marketing metrics makes ROI pretty clear. In direct marketing there is no room for vanity in media selection—if the rich media banner on wsj.com does not perform there can be no saving it. Unless of course we use time-machine technology to retroactively define the objective of the banner as a brand-building tactic.
There are precious and few survivors of the Baby Boom on the marketing agency side, but we are cursed with the wisdom of our years. We see that Internet marketing has been the unlikely benefactor of old-school direct marketing issues. “Cost-per-lead and cost-per-conversion” is the vocabulary of the C-suite these days. These of course along with the newer “open rate, closed loop tracking and click-through rate” are metrics against which MBOs are set and careers are made.
Joan Ritter is VP, Direct and Relationship Marketing at Slack Barshinger. While she has actually successfully used multivariate test designs in complex marketing campaigns for big-name clients, she is still intermittently irked and delighted to see the long-shot mail campaign payout. She welcomes comment to her point of view or other lively reparte