Media Zone: Online Ad Sellers' Direct Response Grumbling Could Backfire1 Sep, 2009 By: Timothy R. Hawthorne Response
As global ad dollars continue to shrink, even the trendiest new media is feeling the pinch. Internet advertising — a rocket-fueled $23.4 billion market in 2008 — was down 5 percent during this year's first quarter. ROI is the new mantra for even old advertisers, much to the chagrin of an unexpected suspect: the online ad industry itself.
Some online marketers are expressing regret that the format exploded on the strength of direct response arguments. Faced with plummeting click-through-rates and free-falling click-to-buy numbers, the industry that owes its quick growth to its DR positioning, shows signs of beginning to backtrack. Ari Rosenberg, among others, argues that online marketing's early DR focus prevents it from justifying itself with softer standards like brand building. It's an understandable impulse, but it's ultimately self-defeating.
Accountability measures have driven direct marketing for more than a century. However exciting and novel a new medium, it can't erase old behaviors as easily as dragging them to a trashcan. Of course advertisers want proof that their ad dollars work. Rosenberg is right that aggressively touting direct response accountability has helped entrench ROI in brand managers' vocabularies. But this isn't a problem — it's an opportunity.
This isn't an either/or world. In any ad medium, precious few creatives are singularly brand builders or calls-to-action. Good ads fulfill both roles. DRTV veterans have long understood the powerful brand value of in-your-face "call now" entreaties. A DRTV campaign can lift retail product sales upwards of 200 to 500 percent. But the cause-effect link isn't "direct." That's one reason why no direct response format is for the faint-hearted.
Because online display ads drew double-digit click-throughs when first introduced, Web marketing's young turks were ill-prepared for the current 0.1-percent click-through-rates that are roughly analogous to the sub-one-percent response DRTV delivers. But click-throughs are like ratings — measurable, but not nearly as persuasive as direct sales figures. If a "microscopic" response returns $3 in orders for each dollar of media, 0.1 percent is a wondrous thing. At the very least, measuring phone calls — or clicks — provides an invaluable ongoing feedback loop for testing and tweaking creative executions.
Okay, I'll admit it — I too, on occasion, whine about client stubbornness and challenging market conditions. But it never ceases to amaze me that when brand marketers pontificate, they often forget that they're DR marketers too. The job of a DRTV spot, for example, is to demonstrate a worthy product's problem-solving benefits, and to persuade a sufficient percentage of viewers that it's a value they just can't pass up. In other words, a pitch: the very same ploy that ad agencies use to persuade marketing directors of the agency's problem-solving benefits (driving sales), delivered at a value they can't refuse (ROI).
Sure market conditions are nasty, and certain clients' demands are unreasonable. Make a sale anyway. Presumably, that's what ad agencies do. If you're unwilling to sell yourself on the strengths of your product's most promising benefits — yes, Web marketers, I'm talking direct response — you give potential clients little reason to think you can sell anything.
Timothy R. Hawthorne is founder, chairman and executive creative director of Hawthorne Direct, a full-service DRTV, print, mail and digital ad agency founded in 1986. A 35-year television producer/writer/director, Hawthorne is a cum laude Harvard graduate.