I believe billions of dollars are wasted each year on advertising campaigns.
Most advertising is waged in an effort to create awareness in the minds of a target audience about a certain “positioning.” Advertisers spend money buying impressions and slathering their tag line all over people’s frontal lobe with TV, radio, print and other media trying desperately to create an association between their company and some succinct concept like cool, hip, value-oriented or sexy. The success of such a campaign is measured in terms of audience recall, unaided recall, GRPs, Q Scores and top of mind awareness.
This is the essense of brand advertising. Tell them repeatedly who we want them to think we are. When they believe it, they will buy from us.
I would never say this not effective. It’s just weak. It’s a weak form of business communications.
No one runs a business in order to generate unaided recall. A business runs in order to sell stuff. The goal is to generate a customer and sell something. Generating awareness comes in the middle. It’s not the end goal. Now, what if you oriented your advertising around generating customers?
Advertising dollars should be spent to make sales. If enough sales are made and customers created, a brand develops. This branding comes from the consumer experiencing a positive feeling when buying or owning the product. They come back and buy again. They tell their friends. Branding this way is a whole lot better than tag-lining someone to death. This type of branding is born of experience.
That brings us back to advertising. I love great creative. I love a clever tag line and a smart campaign. The great error in most advertising is that it is built and measured around the intermediate goal of awareness instead of the real objective – sales. The sad reality is that you can create a lot of awareness and still make no sales. If, on the other hand, we orient, measure and manage all our advertising and marketing efforts around the sales they drive, then we are making the highest and best use of our advertising dollars. When we sell to enough people and they like us- a brand image develops.
Direct Response marketing used to be called “accountable advertising” because all marketing dollars are tracked to their efficiency at driving a sale. The metrics are different. Direct marketers toss aside murky awareness and share of voice metrics and replace them with “cost-per-sale,” ”cost-per-lead,” and ”ROAS” (return-on-ad-spend). More importantly, they measure LTV- life time value. This way they know more than just if a sale was made, but whether a great customer was acquired.
Great customers who buy from you repeatedly create real brand loyalty. That’s a whole lot better than unaided recall. That’s I’ll open my wallet and buy from you again recall.
Many people dismissively think direct response advertising is relegated to infomercials and direct mail. They think- “build the awareness and the customers will come.” That is what wastes the billions of dollars. Direct Response is not a media type, it’s a philosophy about advertising. It’s a firmly held strategy that mandates that the creative, the offer, the media and the campaign should drive sales. It’s advertising with a profit & loss statement attached. Isn’t that what business is about?