Getting Rid of Those Pesky AtomsDirect marketers could learn a thing or two from Mr. Goins, my seventh-grade science teacher. An ex-fighter pilot and perennial student favorite, Mr. Goins spent a lot of his time showing students (often in live, smoke-filled experiments) that different materials have different properties and that materials react to their environments.
In some environments a material may thrive; in others it might burn and wither. If Mr. Goins were a direct marketer, he might have made a profitable transition to the Web.
Unfortunately, many direct marketers don't have the benefit of Mr. Goins' teachings, so I'll take it upon myself to expound upon them. Atoms, he might say, are cumbersome. They are usually weighty, have mass and are often messy (refer to classroom experiments with Mercury and Potassium).
Because atoms are generally cumbersome, they tend to cost money to put together and transport. Which is why, when I received a direct mail piece from a major auto insurer last week, this direct marketer had made a costly mistake. The envelope, with enclosed plastic credit card (made from nonrenewable petrochemicals, Mr. Goins would note) probably cost about 60 cents to make and deliver to me. And since I haven't owned a car in more than a decade, and have no plans to purchase one now, this was 60 cents completely wasted.
The laws which govern atoms have governed the direct marketing industry since its inception. The high fixed costs of materials made targeting the list a critical component - perhaps the critical component - of direct marketing. If it cost too much to send to everyone, then it made a lot of sense to send only to those likely to respond to the offer. Send auto insurance offers only to car owners, for example.
But what might happen if the rules changed? What would happen if the cost of mistargeting was low to nonexistent? What would it mean to be a direct marketer in such an environment? This new world, with its new economics, really does exist - it's called the Web.
Early Web media professionals have focused on targeting banners and e-mails in ways that wouldn't be possible in the atomic world. Their new tools and methods take one-to-one communications, micro-segmentation, and CRM to new heights, and perhaps to the absurd and intrusive.
Major publicly-traded companies have staked their fortunes (and often their clients' fortunes) on the notion that getting very targeted banners or e-mails in front of the right prospects is incredibly important. Marketers often pay excessive premiums to use these sophisticated tools to get ads in front of consumers - premiums frequently not repaid by a corresponding return on investment.
In focusing their efforts on targeting banners and e-mails, Web media companies have overlooked the principles of direct marketers and focused instead on the tactics. Direct marketers believe their decisions should be data-driven, and that their media dollars should be accountable. Tactically, this has meant that they've needed to target their offers because of the cost of mistargeting in the atomic world.
On the Web, targeting is often less important. If a direct marketer can buy on a cost-per-click basis, then the cost of mistargeting banners is effectively zero. Think about it. If you can pay only when people respond to your banner (thereby qualifying themselves), you're passing the risk of mistargeting banners onto the publisher.
Now you can focus on what's truly important - what happens after a consumer clicks on your banner. Because as a direct marketer, you don't really focus on getting people to open envelopes or click on your banners. You focus on making sales and on creating revenue-generating responses to your offer.
The traditional levers of direct marketers - list, offer and creative - are reversed on the Web. Getting in front of the right list is less important than having solid offers and creative to convert prospects into buyers. Because the cost of putting the wrong banner in front of someone is far lower than the cost of putting the wrong envelope in front of someone, tactics which reflect these new economics will prevail.
Direct marketers on the Web must renew their focus on developing and testing offers that get shown after a consumer clicks a banner. What premium? What price? What text? Offers should be split-tested and improved over time by measuring conversion of visitors into buyers by source.
Testing creatives is increasingly important on the Web. In this medium, traditional test variables are combined with new ones. What's the right scroll of the Web page? What's the right number and size of illustrations? How much supporting text do you incorporate?
Notice something? When sophisticated targeting and tracking issues are removed from the conversation, Web marketing becomes a lot like traditional direct marketing. Removing the focus from banners and applying analytics to offers and creatives allows direct marketers to once again use familiar metrics and terms. Marketers can again meaningfully discuss conversion, split-testing and ROI - and once again be proud to create things like good copy and solid results.
Direct marketers who transition to the Web should bring with them their sales-driven principles, not their cumbersome atomic baggage. These principles may look unfamiliar in this new economic environment. But rest assured, the same material can often behave differently in a different environment. And if you don't believe me, you can ask Mr. Goins.