The Differences and Benefits of Direct Response
There are some major differences between Direct Response Marketing/Advertising and Brand Advertising. Advertising campaign types and goals are unique. Understanding the differences of each type can help guide you to the best fit for your company.
First let’s look at the definition of Direct Response Advertising and Branding or Brand Advertising. This will give us more clarity for comparison. According to Marketing Profs, Direct Response Marketing is “a type of marketing designed to generate an immediate response from consumers, where each consumer response and purchase can be measured and attributed to individual advertisements.” According to Entrepreneur Magazine, Brand Advertising is “the marketing practice of creating a name, symbol, or design that identifies and differentiates a product from other products.” These differences become more distinct and easier to understand when we look at examples of significant, widely-known Branding and Direct Response campaigns.
Top Branding campaigns include companies like Adidas, Nike, American Express, Apple, Ford, Chrysler, Macy’s, Sony, Taco Bell, T-Mobile, Target, Walmart and Walt Disney. One of the best branding advertising campaigns is for a bank: “Capital One. What’s in Your Wallet.” As a rule, these brands want you to think of them first when you are about to shop. You will most likely spend money with these advertisers at a retail location, dealership or online retailer. These advertisers have retail distribution, and their product or services are offered at these locations.
Some of the most well-known Direct Response campaigns include Geico, Progressive Insurance, Nutrisystem, Trivago, Wayfair, Vista Print, Priceline.com, Home Advisor and Proactiv. As a rule, customers will order products or services directly from the company either online or over the phone. Successful Direct Response campaigns that feature products—usually those that are easy to demonstrate, like Ready Seal—will end up on retail shelves. However, they first have to be successful in a Direct Response model to make it to retail.
There are real benefits to using Direct Response Marketing to generate sales and awareness for your product or service. Here are three key benefits you can bank on:
1). Instant Results. At the heart of every Direct Response marketing campaign is the drive to get potential customers to respond to your ads and offers immediately. With a solid Direct Response marketing plan, you will be able to see results the very first day you advertise. You will also have tracking and measurement abilities to see which media outlets are performing and which are not. There is technology available to see how many customers go to your website from each television ad that airs. You can also know exactly how many people called from your television or radio ads. With digital marketing you will be able to see how many unique visitors responded to your pay per click or social media campaign. You will also be able to measure creative performance and conversion ratios. It is in the Direct Response marketing campaign’s DNA to measure every response from every ad and deliver a cost per sale, Cost Per Customer Acquisition and ROI data. Many direct response advertisers develop a Media Effectiveness Ratio for every buy. This is communicated in a formula like 2 to 1. This means they generated $2 in sales for every $1 invested in advertising. There is never a question as to what advertising is working or what is not because you see the results immediately. That helps you limit waste and refine for success during the campaign.
2). Smaller Test Budgets. With Direct Response campaigns, you can test much smaller budgets to make sure your creative is working, your sales staff is selling, and your website is built to handle purchases. Then you can roll out from there. We worked with a well-known weight loss product that did $40 million dollars in a year in sales and ended up being carried in Big Box retail stores nationwide and sold even more. What most people don’t know is that the first campaign they did was on one radio station in a small California town with an investment of less than $3,000. The client knew it had a winner because that $3,000 investment generated $4,500 in sales. Then one successful station, turned into two successful stations, turned into 20 successful stations that turned into national radio and then national television. The beauty and genius of Direct Response advertising is that you can start small. Test your message, measure your results, refine your message and media mix and then replicate the formula you found successful. It does not cost very much to test out one or two radio stations or Facebook or even Google pay-per-click. You can start with small budget, measure your key performance metric or KPI (Key Performance Indicators) and grow. According to Forbes, branding agencies will charge $10,000 to $50,000 “there is no ceiling” just to develop a strategy. That does not even include the cost of designing a logo, much less executing a media buy and full-on branding campaign. When you have a great idea, plus an amazing product to sell but not a ton of cash, then Direct Response marketing is definitely the way to go.
3). Faster Return on Investment. Unless there is immediate negative feedback on your branding campaign (think Kendall Jenner Pepsi ad), then you don’t know for three to four months if your campaign is working. Brands look at recall, unaided recall, year-over-year sales and other data which takes time and research dollars. With Direct Response advertising, you usually know within 15 minutes after the ad ran if you made money or not. That gives Direct Response advertisers an advantage to get a faster return on investment. Most media salespeople will tell you “You need to be in for the long haul” or “You need at least 13 weeks to see if your campaign is going to work.” More than likely, this is how these salespeople were trained to sell and they don’t know otherwise or they care only about their commission check. We tell clients that you should be at 65% to 75% of your goal in the first two weeks or something is broken that needs to be addressed right then. Pause the campaign. Find out if it’s your creative strategy, media mix or sales process. But don’t throw good money after bad. That’s why Direct Response is so helpful. It takes the emotion out of your marketing decisions. You may think you’ve got the best product on the planet, and everyone from Rough and Ready, California to Slickpoo, Idaho will want one. You can find out quickly with Direct Response Marketing. You can also discover if it’s the goldmine you thought it was or if you need to keep digging. David Ogilvy said “If it doesn’t sell, it isn’t creative.” You know that much faster in Direct Response advertising.
As Mark Twain put it: “Many a small thing has been made large by the right kind of advertising.”
We hope this has helped you decide what the “right kind” of advertising is for you.