Brands Should Learn From Their Cousins, Direct Marketers

Oct 24, 2016 | 0 comments

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Edward Shannon, Chief Revenue Officer

 

Growing up in a family that owned a small business, I learned a number of valuable lessons about targeting customers that translate well over time and across any industry. For example, when I was a kid, my dad would have me ride my bike around the surrounding neighborhoods, identify where our regular customers lived, and then canvas the neighborhood with promotional flyers. It may not have been as sophisticated as look-alike modeling, but it reflects the same principles at its core: identify your customers and then build a data set that looks and feels as close to them as possible. The problem is once that work is complete–after I peddled countless miles mapping the area–we all make the same mistake of expecting the same messaging to work across the entire data set because the constituents look-alike, or live in the same neighborhood.

If I compare this primitive look-alike modeling with my 18+ years working in both digital direct marketing and brand marketing, there are a few concepts that stick out. The biggest one is that direct marketers tend to set the pace of innovative marketing, while brands lag behind.

When brand marketers were worried about Share Of Voice (SOV) and eCPMs, direct marketers were applying validations on the front end of consumer engagements to prevent Invalid Traffic (IVT) and fraud. Their tactics may seem unsophisticated today, but they helped solve an enormous problem burgeoning in the digital space. This is just one example of how big brands could have followed the example set by their online cousins, direct marketers.

Targeting consumers who display the same behavior as your desired consumer is not a new marketing strategy. Over a decade ago, direct marketers were buying email lists, or generic leads from aggregators, essentially triggering the birth of third-party data. From these rudimentary tactics evolved the modern practice of tagging sites and collecting data to create a preset of segmented users. The only question is, what are you doing with that data?

Here are three steps brands can take today to catch up with their direct marketing cousins:

1. Lead with creative

You can slice and dice data all day long, but it’s all about the messaging. If you do not understand what your target audience responds to, you are wasting your marketing budget. Just because I fit a demographic (40-year old male, lives in the tri-state area, soccer dad), that does not mean I will respond to the same message and creative served to a soccer mom or even another user in my exact segment. What we are doing today reminds me of why my childhood bike rides did not have a fruitful outcome. The person that opened the door to my dad’s flyer may not have had the same need as his neighbor, a current customer. Brands need to invest in innovative technology or partners that can help them understand what message, creative elements, or variation of ad layouts return the best results.

2. ROAS matters all the time

As marketers grow and become more brand-centric, consumers do not drastically change, but the positioning becomes more “advanced.” Marketers are looking to have greater impact and develop a connection with their customers that drives not just online transactions but offline transactions as well. The ability to move product offline via online marketing is the Rosetta stone for most major brands. Working with marketing mix modeling studies has become the norm, but these are costly, time-consuming, and can make it difficult to introduce new partners. Instead, it’s easier to work with partners who understand attribution and track meaningful metrics in real-time and in-campaign. This will result in better consumers both online and offline.

3, Consolidation of partners

Originally direct marketers outsourced their lead generation and cost-per-acquisition opportunities to 10-15 different partners per campaign. Initially, this seemed like they were getting a great SOV, but it was a mirage. Over time, it was clear that most of their relationships were brokering the opportunity downhill, creating more intermediaries. The partners caused massive markups and the end advertiser was pushed further and further away from the actual inventory. Sound familiar?

Consolidating to a single partner with real technology enables marketers to supervise and control their marketing dollar. By focusing on partners who offer multiple services, brands are able to reduce the mess of the LUMAscape. The less widespread the responsibilities, the less latency and operational fees brands will have to pay to execute their media. This approach puts more marketing dollars to work and encourages meaningful partnerships for long-term growth.