Direct Marketing vs Advertising
Let’s not kid ourselves. It’s hell out there. Show me a truly happy marketing person (vague term, I know) and I’ll show you a liar. Conditions aren’t good for anyone. But it is my contention that the DM industry in the UK has more reasons to be cheerful than other sectors of the marketing industry, particularly advertising.
So what grounds do I have for optimism? Well, let’s start with the facts. According to the Direct Marketing Association’s 2001 Census, DM expenditure grew by 10 per cent to a total of £11.14 billion. Not a bad increase – particularly when you put it into the context of a seriously unsettled economic and business environment. And in a year which has been the worst for the advertising industry for over 10 years.
When you drill a little deeper into the census findings (and what DM man doesn’t get an almost sexual frisson of excitement from a little number crunching?) it becomes clear that the growth in DM expenditure has been consistent across all areas, namely, web, e-mail, telemarketing, field marketing, traditional media channels and, of course, direct mail.
So far, so good. Then add to this finding the fact that even direct mail and door-to-door have shown healthy increases despite increased competition from expanding electronic and interactive alternatives.
So these are the bald facts. What’s the mood like? What mysteries lie in the ruins? Now, this is an area our cousins in advertising tend to feel themselves at home in – being based on hunch, hearsay and supposition (not a bad name for an ad agency, now I come to think of it). Well, there are considerable grounds for optimism here too for all recent surveys of marketing directors suggest that DM expenditure will be increased in future budgets.
But is everything in the garden rosy? Far from it.
Some DM agencies have suffered alongside their advertising counterparts. And there are regional differences across the UK.
But, by and large, the prospects for DM are far from bleak. And I believe the main reason for this is measurability and accountability. This was the principal reason why DM emerged so strongly from the last recession of the early 90s. And it has remained a key issue throughout the boom times until last year.
Put at its simplest – tighter budgets place greater demands on results and efficiency. DM disciplines such as testing mean that clients can find out what works and what doesn’t. So we can maximise the former and minimise the latter. Now call me old-fashioned, but that seems to make a lot of sense.
But today DM offers so much more. Because advances in technology and methodology allow us to better target, understand, predict and manage customers and their development.
By fully harnessing these technological advances, clients can get much closer to their customers. And this closeness allows us to tailor communications in a really relevant and personal way. In a way that inspires and motivates.
This “now with added closeness” factor is particularly important in the key area of customer retention. The acquisition of new customers is now no longer the be all and end all. The real emphasis now lies with retaining and developing best customers.
The Direct Marketing Association’s Census hits the nail on the head. “It is the customer driven components of direct marketing that will continue to drive industry growth forward as the convenience, speed and benefits of dealing with companies through these channels win over a greater proportion of the population.”
I rest my case.
As someone who has rowed for many years in the galleys of various creative departments, I am far from qualified to comment with any real authority on the finer points of the advertising versus direct marketing debate. But for some reason or another my opinion has been sought. And it would be churlish to refuse.
I believe it was that droll old French egghead Blaise Pascal who observed that the whole of human history would have been different had Queen Cleopatra’s nose been half an inch longer.
Eh? What? Come again? Well, what I think the old absinthe quaffer was getting at was that major events and trends are determined by very small details. And if you understand the details you understand everything. And if you understand everything you can control everything, and so on, and so on, and so on. And herein lies the rub between advertising and direct marketing.
Bear with me a moment and I’ll try to explain myself.
DM is about nothing if it is not about detail. And the better that detail is understood, the more pertinent, the more telling, the direct communication. Advertising is about gesture, presence, emotion, guts. And, needless to say, the two things are diametrically opposed in terms of their modus operandi. But they are by no means mutually exclusive. And, in fact, when the two black arts are combined they can form an overwhelmingly persuasive appeal to the target market.
The problems arise – and are evident just about everywhere – when DM and advertising work against each other. And this can be seen with blinding clarity during a recession such as the one we are currently experiencing.
Recessions breed uncertainty, insecurity and a marked cinching of belts. And, all too often, creativity – the only true grappling iron with which to storm consumers’ conceptions and preconceptions – is thrown out of the window in order to deliver a muted, measurable response.
I can understand this. It’s only human nature, after all, to gravitate towards the measurable, the calculated, the definable when surrounded by uncertainty.
Don’t get me wrong. Being able to prove something is hugely important. In fact, I’m all in favour of it. Let’s just make it effective, targeted and creative.
There are lies, damned lies and statistics. So let’s talk statistics for a moment. In fact, let’s go one step further and talk financial services statistics.
Financial services providers have always been heavy DM spenders – particularly over the last year, when the pressure to make every pound count has been critical. But according to the Financial Services Forum – the leading organisation for senior financial marketers in the UK – most respondents to a recent survey believe their marketing activity will transfer away from below-the-line.
So, who to believe? Good question.
Anthony Thomson, the Chairman of the Financial Services Forum, says: “We will see an increase in sophisticated branding activity.”
I agree. For this is the real battleground. This is where consumers are really won and really lost.
Take Barclays as an example. Yes – they continue to develop and implement effective below-the-line customer retention campaigns. And so they should. But the main thrust of their marketing activity is a £15m TV, poster and press campaign featuring Samuel L Jackson. Personally, I hate this campaign – but I applaud the courage.
The Forum’s research goes on to state that more than 15 per cent of members are poised to reduce their below-the-line expenditure substantially, 4.5 per cent are set to drop BTL expenditure markedly, 19 per cent are set to boost above-the-line spend slightly with 7 per cent substantially.
Alright, already. You don’t need to say it. The picture is distinctly murky. Recessions do that.
Some clients favour branding advertising, others are going DM. The really smart ones are doing both. And doing it with conviction.
There are so many competing offers out there (particularly in financial services) that consumers are finding it increasingly difficult to differentiate between the offerings.
As Sean Larrangton-White, CEO of the financial services forum, tank!, puts it, “Branding activity has been neglected and there is no doubt that we will see increasing amounts of above-the-line work from the ‘big four’. We will see more brand work, but also more brand responsive work.”
Quite right, Sean. DM and advertising must work together – not at each other’s expense. Only great above-the-line advertising can really build great brands. Only great DM can maintain and develop relationships between the customer and the brand.
The length of Cleopatra’s nose may well have altered the course of history. But Cleopatra as a brand was built above the line.
Dream large. But don’t forget the details.