Direct Marketing Agency Triumphs Over ‘Mad Men’

“Wonder Who?” was not an unusual “Mad Men” reaction in 1960s when direct marketing agency Wunderman, Ricotta & Kline, already at the top of the direct mail and mail order agency league table, might be mentioned in a social or business conversation. “What do they do?” was the usual semi-curious follow-up, if there was one.

“Wonder Who?” was not an unusual “Mad Men” reaction in 1960s when direct marketing agency Wunderman, Ricotta & Kline, already at the top of the direct mail and mail order agency league table, might be mentioned in a social or business conversation. “What do they do?” was the usual semi-curious follow-up, if there was one.

In the sacred haunts of ad men (there were precious few women, but more on that later), the direct and data-driven marketing discipline just didn’t have the sex appeal that came with real advertising; especially real advertising that could be seen on television and bragged about over cocktails. It was an exciting world, where 30 seconds of peer-acclaimed, but unaccountable, genius had far more value than judgments based on the measurable and accountable return on marketing investment.

That we now live in a very different world could not be better illustrated than by the recent announcement that WPP has folded 150-year-old J. Walter Thompson, the citadel of “brand” advertising, into Wunderman, described by Adweek as “the first direct marketing agency” and “the darling of WPP.” The result will be Wunderman Thompson, with 20,000 people across 90 markets.

Wrote Avi Dean in Forbes: 

“This comes a couple of months after digital agency VML merged with traditional agency Y&R to form VMLY&R. While these are positioned as mergers of equals, they are essentially a takeover by the digital agencies of their older siblings.

“JWT’s demise is a metaphor of the demise of Madison Avenue.”

The ironies are too numerous to mention.

There must, incidentally, have been a compelling reason for the WPP management’s recent pairing of VML with Y&R to form VMLY&R. Could it have been that folding Y&R into Wunderman after Wunderman had been previously folded into Y&R might have been too much even for the traditional “Mad Men” to stomach?

The “demise of Madison Avenue” can be traced directly to the cultural clash between traditional agencies and their owners who looked down their noses at “mail order” and what became data-driven direct marketing. From the earliest days of the agency, its founder, Lester Wunderman, while optimistic, maintained a healthy skepticism about whether the chasm between these two cultures could truly be breached, given the opportunistic motivation driving most “mergers” of the disciplines.

In the early 1970s, when general agencies realized they needed to be seen to embrace direct marketing, Wunderman was acquired by Young & Rubicam. The embrace, however, spun to clients and the marketing world, was less driven by passion and an honest and sensitive understanding of the changes that were impacting the market than giving clients some comfort if, God forbid, they wanted some DM advice or service. There was — and to a lesser extent, still is — a historical incompatibility of two cultural systems.

The traditionalists mostly considered DM practitioners, if not second-class citizens, not to be the folk you would want to bring to a top client meeting — unless you had to. For those of us who experienced the “had to,” how the “essential” half-hour direct marketing portion of the big client presentation got reduced to 15 minutes and then to five (if there was still time before the client left to catch his plane), however demeaning, made our subsidiary status perfectly clear.

When Wunderman proclaimed that “Data is an expense. Knowledge is a bargain,” most of the traditional advertising world nodded their heads but didn’t quite get the “knowledge” part, or see how it would impact the future of every aspect of marketing. Writing about this future in the last chapter of his 1996 book, “Being Direct: Making Advertising Pay,” Wunderman said:

“The way of creating effective combinations of price and service is by creating knowledge-based direct channels between manufacturers and consumers, in which the media becomes the marketplace. The Industrial Revolution created the practice of branding, but in the Information Age, brand images increasingly provide only a thin shield against competition.”

The ever-expanding “knowledge” of the consumer and the market, made possible by the handling of data and of the accountable value of every advertising spend, are the forces that have propelled CMOs, as described by Avi Dean, to “care less about agency labels than ever before. They care about effectiveness and results.” So it’s hardly surprising that what we might call the “accountable” culture — making advertising pay — has overtaken the “image” culture. Or so it seems.

Because direct marketing had long been “down-market,” to quote an oft-used phrase, it attracted a disproportionate number of very talented women — many of whom knew they would never make it in the testosterone-dominated “advertising business.” Ironically, that’s all changed, as well, and two women have been appointed as “Chairman” (Chairperson? Chairwoman?) and CEO of Wunderman Thomson.

Some veterans of this culture war still insist that “brand” and “accountability” are, if not incompatible, not happily married, either. They mourn the loss of JWT and fear for the clients.

Quoted in the UK’s Campaign, Rosalind Gravatt, former director of communications, Lloyds Banking Group, said:

“I believe that the JWT brand name could have evolved and still has huge cachet (particularly among blue chip clients) in a way that the Wunderman name never will.”

Lindsey Clay, CEO of Thinkbox, was more emotional:

“It feels to me like someone I care about has died … I just hope that the brand guardianship and culture-defining creativity, which were central to the JWT ethos, live on beyond the name.

The loyalty to JWT is admirable, but the premise that brands will lose cachet and suffer when tainted by the Wunderman name and/or accountability, is a remnant of another age.

“Wonder Who?” is a question that isn’t asked anymore. What goes around comes around.

[Author’s Note: As the founder and first CEO of Wunderman Worldwide, the international arm of the original Wunderman company, and after the Y&R merger, the Wunderman member of the Y&R International Board, I’ve been privileged to have had a unique, if slightly prejudiced, view of the changes described above.]

Toasting 2018 Silver Apple Honorees: In Their Words

You might have heard of a big event that happened last week in the USA. No, not THAT one. I’m talking about but the presentation of the Direct Marketing Club of New York’s 2018 Silver Apples honors. Here’s more about the awards, from the Silver Apple honorees themselves.

Silver Apple Honorees ballroom
Photo Credit: Edison Ballroom via DMCNY, 2018

You might have heard of a big event that happened last week in the USA. No, not THAT one. I’m talking about but the presentation of the Direct Marketing Club of New York’s 2018 Silver Apples honors. Here’s more about the awards, from the Silver Apple honorees themselves.

The Silver Apples recognize leadership, stewardship and business success mid-career in the data, direct and digital marketing field. Each honoree has (more or less) 25 years of experience, with matching achievements to point to … and all have additional contributions to our industry, community, mentoring and giving back.

With the assistance of newly named The Drum U.S. Editor Ginger Conlon, I thought it worth amplifying a few key industry insights shared by this year’s individual honorees:

Anita Absey, Chief Revenue Officer, Voxy (New York):

Favorite Data Story: “Back in the very early days when I was at Infobase, we were doing data overlays on customer databases, which was novel at the time. While working with a large insurer, doing overlays of demographic and socioeconomic data on their database, the profile and segmentation scheme that emerged from that work actually defied some of the assumptions that they had about the characteristics for their customers’ profile. The insights we provided them helped them make subtle changes in their communications and targeting to customers, which improved the overall risk profile of their customer base. It was gratifying to see how data could affirm or deny assumptions and enable our client to make decisions that helped improve the risk profile of their business.”

Measurement: “Hope is not a strategy. Your actions have to be data-based, not hopeful. Similarly, you can’t manage what you can’t measure. Unless you have data that points you to the actions and decisions that are best for the business, you’re running blind.”

Matt Blumberg, Co-Founder and Chief Executive Officer, Return Path, Inc. (New York):

On Choosing Marketing: “The thing that drew me to marketing was the Internet. I had been working as an investor at a venture capital firm that invested in software companies. Once Netscape went public and people started figuring out the short- and the long-term potential of the Internet, I got very excited about working in that field. Unbeknownst to me at the time, the Internet is all about direct marketing. For the first several years of my career, I would never have described myself as a direct marketer; but in hindsight, obviously, I was.”

On Inspiration: “It’s several sentences out of a speech by Theodore Roosevelt called ‘The Man in the Arena.’
It’s incredible. It goes:

” ‘ … The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.’

“I take it as the entrepreneur’s motto. It’s a beautiful passage that I have taped up everywhere.”

Pam Haas, Account Director, Experian Marketing Services (Providence, RI):

Overhyped: “Display and programmatic technologies are overhyped. It’s like the early days of email marketing: People just started sending millions of emails, hoping some would stick. The same thing is happening in display and programmatic. That part of the industry still needs to mature.”

Best Metric: “Right now, it’s the ROAS: Return on Ads Spent. I love that. For every dollar that the client is spending, we know that we are driving X number of dollars in sales.”

Career Advice: “Diversify. In marketing, there are so many different angles and specialties that you can focus your career on. Throughout my career, I’ve [been] able to gain experience in multiple facets of marketing: direct response, email technology, and in databases and modeling. Digital is so sexy right now, but the fundamentals still apply; so it’s important not to pigeonhole yourself into one area.

“While in a mentor program at Equifax, my mentor was a woman and she told me, ‘You have to be your own PR person. You have to make your accomplishments known, because nobody else is going to do that for you.’”

Keira Krausz, EVP and CMO, Nutrisystem, Inc. (Fort Washington, Penn.):

On Her Current Assignment: “I’m proud of where we are at Nutrisystem and I’m particularly proud of what we’ve built as a team. Our job is wonderful, because we get to help people live healthier and happier lives. Since 2013, we’ve nearly doubled the business, which means we’ve helped a whole lot more people get healthier and happier. Along the way, we’ve revamped nearly every aspect of our business that you can think of, and we’re just getting started.”

On Mentoring: “In my first years in marketing, I was always being asked what my goals were and how I saw myself in years to come, and I always felt flummoxed, because I didn’t know what to say. I wasn’t one of those young people who had their whole life planned out when I was 25, and I often felt insecure about that. But it turns out that was OK.

“So, one thing I did that I would advise is, from early on, try to work for someone you can learn from. Somebody who you admire, who has something unique, and who can teach you something that you think you’re missing. The rest will fall together.”

Tim Suther, SVP and General Manager, Data Solutions, Change Healthcare (Lombard, Ill.):

On Career Choice: “I’ve always been technology-oriented, from learning to code when I was 17 to graduating college with a finance degree. With that background, naturally, I was suspicious of marketing. A lot of marketing felt inauthentic and superficial to me. But I had this one moment where I actually saw a dynamic gains curve for the first time and I thought, ‘Oh my god, this is one of the most interesting things I’ve ever seen.’ It was the intersection of the art of marketing and the science of data that really drew me in; and boy, did I get lucky on that one, because that’s what it’s all about today.”

On Being Data-Driven: “This might surprise you a little bit, but it annoys me when marketers say that they’re data-driven, because that’s like saying, ‘OK, it’s time to turn off my brain and just let the data drive the story.’

“I think marketers are far better off when they are data-informed, where they’re combining what the data is telling them with their own business judgment to make the right decision. Human behavior is still too complicated to purely reduce to what an algorithm tells you to do; it has to be a combination of what the data is saying, creative savvy and business judgment.”

This year, DMCNY added two special awards not tied to mid-career, but recognizing two huge drivers in our business today: advocacy and disruption. The inaugural Apples of Excellence 2018 honorees include:

Advocacy:

Stu Ingis, Chairman, Venable LLP (Washington, D.C.):

On Policy-Making: “The whole privacy concern is overhyped. What’s not getting its fair recognition, in the policy world, is all of the innovation that the marketing community brings to society. For instance, they’re bringing real-time targeted marketing to television and delivering marketing communications that consumers are interested in on a personalized basis.”

On Careers: “Take the long view. Work really hard; don’t worry about the compensation or the glory, and then persevere. Stay with it. Don’t switch jobs all the time thinking that something else is always better. If you develop your skills, the good work will come to you. You don’t have to go to it.

“I’d been representing the DMA for about two years, and I had an opportunity to leave the law firm and go out in the early Internet age at Yahoo!

“Yahoo! stock was going up. I would have made millions of dollars a day. I went to Ron Plesser and said, ‘I like working for you; I like the clients; I like the work I’m doing. But I could go get really rich working for this company.’ He said, ‘Why do you want to do that? It’ll ruin your life.’ For whatever reason, I actually believed him and agreed with him. And I stayed at my job. It was probably the best decision I ever made. I don’t regret it for a second.”

Disruptor Award, Presented by Alliant:

Bonin Bough, Founder and Chief Growth Officer, Bonin Ventures (New York):

About Bonin: “His unique approach of applying innovative technology to create breakthrough campaigns helped to reinvigorate traditional marketing brands, such as Gatorade, Honey Maid, Oreo and Pepsi.

“But his influence doesn’t stop there. Bonin believes in supporting young talent and savvy entrepreneurs. While at Mondelēz International, for example, he created internal programs to mentor young talent and launched a startup innovation program, Mobile Futures, to provide a platform for marketing-tech and agency start-ups to work with the CPG giant.

“Stephanie Agresta, global director of enterprise growth at Qnary, describes him best in her recommendation on LinkedIn: ‘Bonin is a force of nature … A true rockstar from Cleveland to Cannes, Bonin has been [at] the forefront of the digital revolution from the beginning. Smart, successful, and connected, Bonin has the pulse on what’s next. Those that know Bonin well can also attest to his generosity, commitment to mentorship and a deep belief that anything is possible.’”

Since I had the privilege of interacting with Bonin at DMA &Then18 recently, I can attest the walls fall away when you converse with him. Disrupted, indeed.

All of these honorees as well as corporate recipient Winterberry Group have many things to teach us. That’s why it’s important we continue to recognize these business leaders, as marketing today, as Matt Blumberg says, is a 100 different things. It’s the business outcomes that matter.

Marketing Metrics Aren’t Baseball Scores

Lester Wunderman is called “the Father of Direct Marketing” — not because he was the first one to put marketing offers in the mail, but because he is the one who started measuring results of direct channel efforts in more methodical ways. His marketing metrics are the predecessors of today’s measurements.

Lester Wunderman is called “the Father of Direct Marketing” — not because he was the first one to put marketing offers in the mail, but because he is the one who started measuring results of direct channel efforts in more methodical ways. His marketing metrics are the predecessors of today’s measurements.

Now, we use terms like 1:1 marketing or digital marketing. But, in essence, data-based marketing is supposed to be looped around with learnings from results of live or test campaigns. In other words, playing with data is an endless series of learning and relearning. Otherwise, why bother with all this data? Just do what you gut tells you to do.

Even in the very beginning of the marketer’s journey, there needs to a step for learning. Maybe not from the results from past campaigns, but something about customer profiles and their behaviors. With that knowledge, smart marketers would target better, by segmenting the universe or building look-alike or affinity models with multiple variables. Then a targeted campaign with the “right” message and offers would follow. Then what? Data players must figure out “what worked” (or what didn’t work). And the data journey continues.

So, this much is clear; if you do not measure your results, you are really not a data player.

But that doesn’t mean that you’re supposed to get lost in an endless series of metrics, either. I sometimes see what is commonly called “Death by KPI” in analytically driven organizations. That is a case where marketers are too busy chasing down a few of their favorite metrics and actually miss the big boat. Analytics is a game of balance, as well. It should not be too granular or tactical all of the time, and not too high in the sky in the name of strategy, either.

For one, in digital marketing, open and clickthrough rates are definitely “must-have” metrics. But those shouldn’t be the most important ones for all, just because all of the digital analytics toolsets prominently feature them. I am not at all disputing the value of those metrics, by the way. I’m just pointing out that they are just directional guidance toward success, where the real success is expressed in dollars, pounds and shillings. Clicks lead to conversions, but they are still a few steps away from generating cash.

Indeed, picking the right success metrics isn’t easy; not because of the math part, but because of political aspects of them, too. Surely, aggressive organizations would put more weight onto metrics related to the size of footprints and the rate of expansion. More established and stable companies would put more weight on profitability and various efficiency measures. Folks on the supply side would have different ways to measure their success in comparison to sales and marketing teams that must move merchandise in the most efficient ways. If someone is dedicated to a media channel, she would care for “her” channel first, without a doubt. In fact, she might even be in direct conflicts with fellow marketers who are in charge of “other” channels. Who gets the credit for “a” sale in a multi-channel environment? That is not an analytical decision, but a business decision.

Even after an organization settles on the key metrics that they would collectively follow, there lies another challenge. How would you declare winners and losers in this numbers game?

As the title of this article indicates, you are not supposed to conclude one version of creative beat the other one in an A/B test, just because the open rate was higher for one by less than 1%. This is not some ballgame where a team becomes a winner with a walk-away homerun at the bottom of the 11th inning.

Differences in metrics should have some statistical significance to bear any meaning. When we compare heights of a classroom full of boys, will we care for differences measured in 1/10 of a millimeter? If you are building a spaceship, such differences would matter, but not when we measure the height of human beings. Conversion rates, often expressed with two decimal places, are like that, too.

I won’t get too technical about it here, but even casual decision-makers without any mathematical training should be aware of factors that determine statistical significance when it comes to marketing-related metrics.

  • Expected and Observed Measurements: If it is about open, clickthrough and conversion rates, for example, what are “typical” figures that you have observed in the past? Are they in the 10%to 20% range, or something that is measured in fractions? And of course, for the final measure, what are the actual figures of opens, clicks and conversions for A and B segments in test campaigns? And what kind of differences are we measuring here? Differences expressed in fractions or whole numbers? (Think about the height example above.)
  • Sample Size: Too often, sample sizes are too small to provide any meaningful conclusions. Marketers often hesitate to put a large number of target names in the no-contact control group, for instance, as they think that those would be missed revenue-generating opportunities (and they are, if the campaign is supposed to work). Even after committing to such tests, if the size of the control group is too small, it may not be enough to measure “small” differences in results. Size definitely matters in testing.
  • Confidence Level: How confident would you want to be: 95% or 90%? Or would an 80% confidence level be good enough for the test? Just remember that the higher the confidence level that you want, the bigger the test size must be.

If you know these basic factors, there are many online tools where you can enter some numbers and see if the result is statistically significant or not (just Google “Statistical Significance Calculator”). Most tools will ask for test and control cell sizes, conversion counts for both and minimum confidence level. The answer comes out as bluntly as: “The result is not significant and cannot be trusted.”

If you get an answer like that, please do not commit to a decision with any long-term effects. If you want to just declare a winner and finish up a campaign as soon as possible, sure, treat the result like a baseball score of a pitchers’ duel. But at least be aware that the test margin was very thin. (Tell others, too.)

Here’s some advice related to marketing success metrics:

  • Always Consider Statistical Significance and do not make any quick conclusions with insufficient test quantities, as they may not mean much. The key message here is that you should not skip the significance test step.
  • Do Not Make Tests Too Complicated. Even with just 2-dimensional tests (e.g., test of multiple segments and various creatives and subject lines), the combination of these factors may result in very small control cell sizes, in the end. You may end up making a decision based on less than five conversions in any given cell. Add other factors, such as offer or region, to the mix? You may be dealing with insignificant test sizes, even before the game starts.
  • Examine One Factor at a Time in Real-Life Situations. There are many things that may have strong influences on results, and such is life. Instead of looking at all possible combinations of segments and creatives, for example, evaluate segments and creatives separately. Ceteris paribus (“all other factors held constant,” which would never happen in reality, by the way), which segment would be the winner, when examined from one angle?
  • Test, Learn and Repeat. Like any scientific experiments, one should not jump to conclusions after one or two tests. Again, data-based marketing is a continuous loop. It should be treated as a long-term commitment, not some one-night stand.

Today’s marketers are much more fortunate in comparison to marketers of the past. We now have blazingly fast computers, data for every move that customers and prospects make, ample storage space for data, affordable analytical toolsets (often for free), and in general, more opportunities for marketers to learn about new technologies.

But even in the machine-driven world, where almost everything can be automated, please remember that it will be humans who make the final decisions. And if you repeatedly make decisions based on statistically insignificant figures, I must say that good or bad consequences are all on you.

Understand and Optimize the Value of (Third-Party) Data for ’Growth’

With DMA’s &Then18 in Las Vegas taking place this past week, I may report that the transformation from “direct marketing” to “data-driven marketing” is complete, and that the disruption of marketing overall, in all its forms, continues to accelerate. Third-party data, for growth, is a marketing trend we’ll discuss here, too.

With DMA’s &Then18 in Las Vegas taking place this past week, I may report that the transformation from “direct marketing” to “data-driven marketing” is complete, and that the disruption of marketing overall, in all its forms, continues to accelerate. Third-party data, for growth, is a marketing trend we’ll discuss here, too.

DMA, a division of Association of National Advertisers, now represents mastery in “Data Marketing & Analytics” and the conference curricula certainly emphasized the present and future of data-inspired marketing. No time for tears and nostalgia, we all have work to do. Yes, direct marketing has provided the foundation and discipline for data-driven marketing to flourish — testing, measurement, accountability — but with the speed, sources and size of data, it’s clearly a new day.

Brands (ANA) are now firmly focused on data and measurement (ANA’s ownership of DMA). As one big family, the conference opened with a hefty statement from ANA President & CEO Bob Liodice and DMA Group Executive VP Tom Benton about why all this matters: “Growth.”

If we’re not disrupting, we’re being disrupted — and probably we’re being disrupted, anyway. Growth does not belong to the hesitant. Still, being agile doesn’t mean being foolish, it means being “fuelish” — understanding the data you have and acting on the insights data, the fuel, presents. Perhaps this is good reason why Bonin Bough served as emcee for the conference. His in-your-face energy reflects the energy in Data Marketing & Analytics that must be unleashed for desired business outcomes to be achieved.

It’s not so easy.

Data sits in silos. Enterprises have legacy systems. New marketing technology doesn’t easily interact with these systems, if at all. Data goes stale. Data isn’t trusted. Quality may be elusive. Integration raises conflicts. And well-meaning but ill-advised privacy regimes, as public policy, could tank responsible data flows.

Use Data Wisely, Responsibly and With Confidence

One focus in programming was a needed one: how to make sure brands access and use data with confidence.

Matt Tipperreiter, senior product strategy director at Experian Marketing Services, presented an enterprising perspective on “data4good.” This was not about social good and cause marketing. It was about providing a professional approach to pursue quality, actionability and best for first-party data management, third-party data sourcing, identity profiles and single customer view, campaign and media activation. I’ve included this image that speaks to this helpful construct.

DMA talks third-party data for growth
Photo taken at DMA, a division of ANA &Then 2018 Conference, Experian Marketing Services Talks Data4Good. | Credit: Chet Dalzell by Experian Marketing Services

Another panel included data experts from Alliant, Dun & Bradstreet, FCB Chicago, LiveRamp and Stirista — which examined third-party data, in particular. [Disclosure: I have a client relationship with two of these companies.]

Of late, brands have expressed some concern with their planned use of both online and third-party data. In research from the Duke University Fuqua School of Business, “The CMO Survey,” nearly 12 percent report they are likely to decrease third-party data use in the coming two years — while six in 10 will maintain a steady commitment. If brands and businesses are truly committed to growth — as ANA and DMA maintain — then they must not abandon reliance on third-party data. All the first-party data in the world cannot provide a whole view of the customer — at least one that can enable smarter decisions about audience targeting and understanding.

“The customer must be the central focus — not the data, not the technology,” said Josh Blacksmith, SVP, General Manager — CRM, FCB Chicago. While brands are sacred, the audience is more sacred.

I’ve maintained that without third-party data, customer growth in an efficient manner is much less likely. So it is imperative that data providers tackle brand safety and brand confidence concerns with third-party data for growth — which is most often tackled through data due diligence, testing and proof of concepts, and a commitment to data quality.

‘Data Label’ Me Transparent

Right on cue, another panel explored the new data labeling initiative by ANA (DMA) and the Interactive Advertising Bureau Tech Lab, among others. Currently, the marketplace is being asked to provide comment on the proposed label [label sample available at the link] that the working group has put forward. The goal is to increase transparency as to the source of commercially available data, and to give an apples-to-apples view for such data.

Finally, making the greatest business case for data marketing and analytics expertise is showcased in this year’s ANA International ECHO Awards. Congratulations are in order for all this year’s finalists and winners. DMA members have access to a brief synopsis of each winning campaign, but anyone is free to read of them online here.

The next ECHO Awards presentation is slated for the next ANA Data Marketing & Analytics conference, March 2, 2020, in Orlando, Fla. See you there!

Denny Hatch Takes on a Direct Brand With Direct Marketing

Harry’s is what’s now classified as a direct brand. But is traditional direct marketing more powerful? Politically correct or not, “It ain’t over till the fat lady sings” reminds us that the piece we write today may be chuck full of insight and wisdom now, but demands a fresh new look only a few milestones down the road.

Harry’s is what’s now classified as a direct brand. But is traditional direct marketing more powerful? Politically correct or not, “It ain’t over till the fat lady sings” reminds us that the piece we write today may be chuck full of insight and wisdom now, but demands a fresh new look only a few milestones down the road.

Denny Hatch’s name should not be an unfamiliar one here. Former Target Marketing editor, blogger and general gadfly, Hatch retains the mantle of data-driven marketing’s provocateur, par excellence, now sadly deprived of his joy at being able to limit his writings to twice the number of characters of the original Twitter. His new marketing blog is full of good stuff.

For his recent 700-character, “Getting Your Prospects to Say ‘Yes’ ” piece, he has turned his sights on Harry’s, the upstart direct-to-consumer razor company featured in this Maverick space almost a year ago. At that time I asked you, our readers:

Will the powerful copy and offer, the Harry’s against Goliath approach, go viral or sufficiently viral to extend the reach of the promotion well beyond the media that has been paid for? Will it bring the cost of trials and conversions down low enough to be “affordable,” attracting customers whose loyalty generates sufficient lifetime value to amortize the total marketing costs over that lifetime and let Harry’s end up with more than a sustainable profit?

direct brand Harry's
Credit: Peter J. Rosenwald

Although headlined, “Make Your Bet on Harry’s or Goliath,” readers were only asked whether they believed that the soft, brand-focused approach would be enough to build a loyal and profitable client base. This direct brand ad and similar treatments break all of the DM101 rules and, because they keep appearing, either they are driving a satisfactory response or, sooner or later, the remains of Harry will be marketing history.

The Denny Hatch traditional direct marketing answer to the “will you bet your money on Harry?” question is a snarling “no.” And he is willing to put his “cheek” (so to speak) where his money is, by offering Harry’s a Denny original, an ad designed to test the “on your face” Free Trial offer against the company’s editorial lede with the same Free Trial offer.

Hatch’s proposed direct marketing ad, seen here, is a classic old school mail-order: “FREE,” “GUARANTEED,” “No Cost,” “No Risk,” “No Obligation.” The call to action couldn’t be improved: “CLICK HERE FOR NO-RISK FREE TRIAL.” And the copy appears to be signed-off by a real person. It’s got everything.

direct brand vs. direct marketing ad
Credit: Denny Hatch’s Marketing Blog by Denny Hatch

But is “everything” what moves today’s consumer, or is the intriguing narrative about changing a $13 billion industry better attuned to today’s sensibilities? Problem is: Will we ever know the results? At this writing, Harry’s soft-focus direct brand ads are everywhere I seem to go on the web.

If Harry’s would run a valid split test of Hatch’s direct marketing ad against one of its regular ads, we would know which one had the better clickthrough. And if we waited long enough, we would know which would have the better lifetime value. (A parenthetical aside: The trouble with measuring lifetime value is that, theoretically, you have to wait until everyone is dead. That’s likely to be longer than you care to wait.) Hopefully, we’ll be able to get some data in this case and share it with you sometime in the future.

When there is more to come, journalists advise you to “watch this space”!

By Association: Brands, Data and Marketing Finally Have Come Together

Call it marketing data’s destiny. On July 1, if membership approves, the Data and Marketing Association (DMA) will be owned and operated by the Association of National Advertisers (ANA). Perhaps a merger more than 100 years in the making.

Call it “marketing data’s destiny.”

On July 1, if membership approves, the Data and Marketing Association (DMA) will be owned and operated by the Association of National Advertisers (ANA).

The former first began in 1917 — the latter in 1910. Perhaps this moment is destiny 100-plus years in the making.

In 1915, William Wrigley sent chewing gum to every household listed in every phone book in America — more than 1 million at the time. That was “direct marketing.”

What David Ogilvy Knew, We All Must Know Now

One of the greatest advertising practitioners of all time – David Ogilvy – knew that “direct response” advertisers — no matter what the medium — knew which ads worked, and which didn’t, because of their discipline to measure. Direct marketing was Ogilvy’s “secret weapon.”

Google did not invent analytics — direct marketers were always data-driven, and have been testing and analyzing and measuring every piece of advertising real estate under the sun. Google helped to introduce analytics to digital-first marketers.

Early on, direct marketers recognized Amazon as what it truly is — front end to back end: “direct marketing on steroids.”

DMA knows data. Its conferences, content, professional development — and advocacy and representation — have always advanced the discipline of data-driven marketing, in quality and quantity. Accountability, efficiency, return on investment, testing and audience measurement — these attributes, for perhaps decades too long — were relegated “second-class” citizenship by Madison Avenue, general advertising and the worship of creativity.

Oh, how times have changed.

Data Streams — What Direct Response Started, Digital Exploded

Even before the Internet was invented, smart brands — leading brands — started to recognize the power of data in their advertising and marketing. While some had dabbled in direct mail, most pursued sales promotion techniques that mimic but do not fully commit to direct marketing measurement. It was the advent of database marketing — fueled by loyalty programs, 800 numbers and credit cards — that gave many “big” advertisers their first taste of audience engagement.

Brand champions were curious, and many were hooked. Nothing helps a brand more than customer interaction. Data sets the stage for such interaction through relevance — and interactions enable behavioral and contextual insights for future messaging and content.

Digital marketing — and mobile since — have exploded the availability of data.  So all-told, brands must be data-centric today, because that’s how customers are found, sustained, served and replicated. In fact, data-centricity and customer-centricity are nearly indistinguishable.

ANA and DMA coming together — it’s as if brands understand (or know they need to understand) that data champions the consumer and serves the brand promise. Data serves to prove the effectiveness of all the advertising, marketing and engagement brought forth.

ANA has been acquiring organizations — Word of Mouth Marketing Association, Brand Activation Association, Business Marketing Association and now the Data and Marketing Association. There certainly may be more to this most recent transaction than my humble point of view here today.

But I’d rather believe that data-driven marketing, finally, has received an accolade from brands 100 years due. Congratulations are in order.

 

3 DRTV Testing Tips for Digital Marketers

Lately, I have been talking to several marketers that want to test direct response television advertising for their brands. Interestingly, these companies that want to test DRTV are category disruptors, born from the Internet. These are companies founded on direct relationships with consumers established through search engines and social media.

DRTVLately, I have been talking to several marketers that want to test direct response television advertising for their brands. Interestingly, these companies that want to test DRTV are category disruptors, born from the Internet. These are companies founded on direct relationships with consumers established through search engines and social media.

The reasons to complement data-driven digital marketing with television are convincing. These internet brands are faced with many challengers in the same space. It is difficult to establish a unique brand position through search. Television remains the most powerful medium for quickly communicating a message and establishing an identity.

More importantly, marketers are finding that building companies one-click at a time is not achieving their goals for growth. Nielsen reports the average American still watches 5 hours a day. With that large an audience television can quickly scale the reach needed to grow businesses.

Most companies are concerned with the high-entry costs for television and not getting the instant ROI expected from digital channels. That’s what makes the more accountable DRTV so compelling. The opportunity to lower media costs with the assumption that the spots will generate response.

These expectations for DRTV might be misunderstood and a little high. One of the companies that I spoke with did a test of television (on their own and not with my direction). They ended up canceling after 2-weeks because of cost and perceived lack of performance.

Before testing television’s impact on response and acquisition, ensure your test is set-up to deliver effective and measurable results. A poor test could result in mistakenly dismissing a potentially valuable channel for marketing.

Here are a few tips for an effective test:

Tip #1 – Utilize Television to Its Strength – Reach

Television is a mass medium and is most efficient when used to reach a mass audience.

Digital marketers might believe that an impression delivered to a non-targeted prospect is useless and a wasted expense.  Restricting reach to select areas using cable or specific homes through addressable OTT may seem to solutions for waste. However, these options reduce consumer reach while increasing media costs, impairing the benefits of television, efficiency and scale.

With your initial television test, utilize the networks, stations, and dayparts that best reach your target audience.  If the results are good, you can start looking for ways to optimize your buy to drive more efficiency. If the television doesn’t drive results, at least you don’t need to second guess your media execution.

When putting together a test with the right stations and dayparts, be less concerned about Reach, Frequency, and GRPs.  Those are metrics to predict the effectiveness of a traditional television buy. If you are testing DRTV with the intent of generating response, results should be the measure of effectiveness.  Do look for deals as a lower cost per spot should contribute to a lower cost per response.

Tip #2 – Track All Results!

My preferred method for tracking the performance of a DRTV test are dedicated phone numbers assigned to each station.  With time-stamped, phone number data it is possible to identify the best stations and dayparts for driving results.

However, a digital disruptor may not be set-up for phone calls. They will likely want to drive response to its online sales-funnel.  Spot airing times and web-traffic data can be aligned to measure direct response to the ads. Establish site traffic baselines before spots begin airing to quantify traffic lift in response to television.

When tracking all results, also look for lift in response rates to other channels. Unlike other mediums, the awareness created by television is likely to increase response in other channels.

Quantifying the impact television can have on other channels can be done with the classic tactic of Control versus Treated. By holding out a market from a recent program, I had comparison data to quantify the lift DRTV had on other channels. The test showed a 25% increase to the direct mail response and a 50% lift in the search clickthrough rate.

If a control hold-out isn’t possible, compare response rates from pre and post television advertising. The lift in response rates can be enough to support using television as a compliment to other direct channels.

Tip #3 – Give DRTV Testing Some Time

Testing television for the first time is big decision.  It requires company buy-in and investments of time on money to develop a spot and get it on television. The desire to show immediate success is great, however, it is a test. Results can take time to develop.

It can take a couple of weeks for a brand with limited awareness to connect with consumers.

Two-weeks of frequency may be needed to build enough interest to elicit a response. It can take longer depending on your DRTV schedule.

If results are limited after two-weeks consider adjusting the television schedule to test different programming.

At 4-weeks you should have quantified results, either direct response to the television or response lift in other channels. With results you can begin assessing the opportunities for expanding the program.

If the results are not seen in 4-weeks, then it might be time to suspend the program. As direct marketers know, more spending isn’t likely to improve ROI.

Because the initial test didn’t produce the desired results does not mean that television cannot work for your brand. Go back and reconsider all elements of the program including the spot, the offers, and the media buy.

Thank You, Arthur Blumenfield, Joyful Storyteller

This past week, we bid farewell to a gentleman and a marketing pioneer, Arthur Blumenfield. For those of us in the New York marketing community, who revere data and data-driven marketing and media — as well as the camaraderie of our community — Arthur truly was a leading light.

This past week, we bid farewell to a gentleman and a marketing pioneer, Arthur Blumenfield.

For those of us in the New York marketing community, who revere data and data-driven marketing and media — as well as the camaraderie of our community — Arthur truly was a leading light.

Arthur was full of stories, and he was a masterful storyteller. He was also joyful, and one couldn’t help feeling the warmth when you were with him. One of my favorite stories was a visit he had taken to Jerusalem, where the locals told him to get a room at the Yimcah Hotel. Up and down he rode the bus route, having to remind the forgetful bus driver a couple of times to drop him off at the stop nearest to the hotel. Peeling his eyes along the route, looking for the hotel — back and forth, as other riders jumped in to say the bus had passed the hotel. Really? Finally, when he actually had the correct stop, he exited the bus and wandered about, finally discovering the Yimcah Hotel, otherwise known as the Y-M-C-A.

That was it, you never knew if it was urban lore — or a true experience. But it really didn’t matter, it was Arthur sharing a tale, and earning a laugh.

He loved his regular OGLE meetings — Old Guys Lunch Experience. Last summer, I received a coveted invitation.  And Arthur truly had a plan for inviting me there. There were plenty of folks in our field — with wisdom a-plenty — with their own stories to be told, and shared. He shared with me Eddy Boas’s book, “I’m Not a Victim, I am a Survivor — how one of our industry’s own endured the Holocaust in a camp with his family, only to survive, rise and build a career in Australia and beyond as a direct marketer. Arthur’s career crossed paths with many such personalities, most of them colorful like himself.

His accomplishments professionally preceded him:

  • He invented the de-duping processes for mail data files, as well as “Me-Books” — that’s personalized print and storytelling coming together;
  • He served as longtime treasurer for the Direct Marketing Club of New York, earning both Silver Apple (1994) and Golden Apple (2013) honors. The company he founded, BMI Global OMS, a family business, was a Silver Apple corporate honoree itself last year;
  • He was a founder of Direct Marketing Days of New York;
  • He cared deeply for the education mission of DMCNY — and our collective support for the future of our field;
  • He developed an order management system first used by the Direct Marketing Association (now Data & Marketing Association) for its conferences; and on and on.

He loved his craft, he loved our field, and loved most of all his family — husband, father, grandfather.  You know when you were invited to a summer outing in Easton, Conn., it was an extended family affair.

Thank you, Arthur, for your warmth, stories and achievements — all of which you so readily shared. We are all the better for it, and — in your spirit — I’m hopeful that any of us can pay it forward at least half as good as you did, with that ever-present smile. That would be remarkable.

Medicare Marketing: 3 Strategies to Address Acquisition Declines

If you’re responsible for Medicare marketing, you are most likely already prepping for the eight weeks in the Fall that have become pivotal to your business strategy. It’s the only time of year that most seniors can make a change to their Medicare Advantage coverage so the noise during this timeframe has built to a crescendo. But beyond market competition, you face another challenge. In recent years the rate of seniors who switched plans has plateaued or outright declined. You need to rethink your approach.

If you’re responsible for Medicare marketing, you are most likely already prepping for the eight weeks in the Fall that have become pivotal to your business strategy. It’s the only time of year that most seniors can make a change to their Medicare Advantage coverage so the noise during this timeframe has built to a crescendo.

For acquisition marketers, the stakes are high and your goals are clear. Entice eligible seniors to switch to your plan during the Annual Enrollment Period (AEP).

But beyond market competition, you face another challenge. In recent years the rate of seniors who switched plans has plateaued or outright declined.

As recently as 2015, 23% of seniors switched plans. Today, it’s a mere 9%. What does a decline like this mean? If you apply the 9% to your marketable universe before calculating your expected return, the math itself will demonstrate the problem.

You need to rethink your approach to Medicare marketing.

But before you move to a new strategy, let’s dig a little deeper into the data. Turns out, the Medicare switchers are largely, if not exclusively confined to those who had an event or interaction that would predispose them to switching during the year.

It could be a customer service issue, a price complaint — or something else entirely — either way, it points to the conclusion of Deft Research that “switchers are not created during the AEP. A combination of consumer experiences and insurer outreach throughout the year creates them.”

How best to react? Embrace the challenge with a proactive approach to change.

3 Strategies to Address Medicare Marketing Declines

1. Rethink seasonality — Only 88% of seniors who had decided to switch plans by the start of AEP, actually switched. Similarly, 90% of those who decided to stay with their same 2017 coverage ultimately did. What does this data imply about seasonality? Although transactions occur during the AEP, the real work –relationships with members are year-round endeavors.

2. Engage with your audience — Embark on a strategy to build or establish a relationship ahead of the transactional AEP. Since today’s 65-year-old was in their mid-40s when the Google search engine launched, they are internet savvy, social and will engage. There are lots of ways to keep them warm, informed and connected.

3. Get to know the “new” senior — Could it be that the new senior audience is misunderstood? Let’s think about that… while “misunderstood” is a term usually reserved for teenagers, today’s Boomers see themselves, and aging very differently. They are dealing with their own version of being underestimated by today’s businesses. The boomer generation is dedicated to changing the way society thinks about retirement and aging. Loyalty is a two-way street with this audience. While the “old” senior citizen may have been known for their loyalty, the new senior is discriminating and looking for value to support their lifestyle — their needs come first!

While switching has been down — shopping behavior has not.  This dynamic leaves the window open for more change to occur, especially if you take their lead and engage the new seniors outside of a transactional and limited approach.

Direct Marketing ‘Discovered,’ at Last

After years of being the poor relative to brand advertising, our direct discipline has finally been discovered by the big brand purveyors — all of those Mad Men who traditionally looked down their noses at any marketing efforts that demanded some form of response and were driven more by results than ego-polishing.

Perhaps we should all now breathe a welcome sigh of relief.

After years of being the poor relative to brand advertising, our direct discipline has finally been discovered by the big brand purveyors — all of those Mad Men who traditionally looked down their noses at any marketing efforts that demanded some form of response and were driven more by results than ego-polishing.

MediaPost’s’ editor Joe Mandese recently wrote an article with the intriguing, if slightly confusing title, “Excuse Me For Being Direct, But So Will You.”

“The most disruptive challenge to conventional media-based, brand-building advertising happened during the earliest days of Internet advertising, when agencies and brand marketers failed to define emerging digital platforms like the Internet — and ultimately, mobile — as a branding medium.

“Instead, direct-response marketers embraced the medium because of its real-time immediacy, access to data to track and ability to modify conversions and sales on-the-fly, and pure ROI efficiency.

“According to some experts, that trend is about to accelerate — as conventional brand marketers throw in the towel altogether and begin leveraging digital media to become direct sellers themselves.”

Conventional brand marketers throwing in the towel … becoming direct sellers themselves: That’s big news for those of us who have spent the better part of our careers trying to explain to those brand giants (and capturing some of all that money they seem to throw around) that while metrics like ‘reach’ and ‘frequency’ certainly have their value, nothing beats affordably capturing the business of new and returning customers and knowing their ROMI, the return on the marketing investment in each one of them. It is surprising they didn’t discover it years ago.

That expression “branding medium” suggests that those marketing initiatives which include a call to action and urge the consumer to “act now” do little or nothing to enhance the brand and often drive general agency art directors berserk, because those calls to action get in the way of their elegant designs.

Some years ago, before there was any significant “subscription” advertising in Brazil, where I now live, the small group who controlled newsstand distribution forbid publishers from advertising for subscriptions on pain of having their publications banned from the newsstands. They reasoned that this advertising would lure magazine buyers away. But when presented with the indisputable fact that offering subscriptions would allow a much greater advertising spend and in the best of all possible worlds, only 5 to 7 percent of the people who saw an ad would reply, while the rest would be positively exposed to the brand and many would purchase at the newsstand, they gave the publishers the go-ahead. Brand and subscription have gone hand-in-hand ever since, to their mutual benefit.

Quoting Publicis Groupe Chief Growth Officer, Rishad Tobaccowala on the reason for the “direct” discovery, Mandese wrote:

“… conventional brand-building media models aren’t working as well as they used to. It’s because big brands are realizing that the only way to have a relationship with and understand their consumers, is to cut out the middlemen and have a relationship with them directly.”

Wow! That’s a quantum leap from the historic paradigm that “direc”’ was, if not a strategy of last resort, well down the list of priorities. Working in big general agencies, how many of us have been asked to prepare 30-minute presentations to be an integral part of the same pitch with the agency’s brand campaign, only to see the time for it reduced to 20 and then 10 minutes or even — as time ran out — being asked to mention the “direct” recommendation while taking the client to the elevator?

Two important factors have principally changed the game:

  1. The emergence of vast amounts of data, the machines to process it and the ability of marketers to creatively use this data for their marketing initiatives;
  2. The growing understanding of CRM, the essential proactive relationship between brand and known customer.

Of course this hasn’t happened overnight. Data-driven marketing gurus have been planting and nourishing these seeds for decades and, as a result, the industry has grown and grown. Lester Wunderman said famously: “Data is an expense. Knowledge is a bargain.” As knowledge has grown and become more widely accessible, brand marketers are being increasingly drawn to it.

Poor relatives no more, “direct” practitioners have finally been “discovered” and have emerged from the shadows.

It feels great in the sunlight.