Tag Archives: direct marketing

Uber Eats and Airtasker run amazing suburban launches using…

23 Tuesday May 2017

Posted by in Branding, Digital marketing, Direct Marketing, Marketing

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As you know dear reader I like to keep abreast of the latest digital disruptions and the amazing “new rules” of marketing they have introduced. How will the old rules survive?

So I thought I’d share the most recent ads that launched Airtasker and Uber Eats in my suburb. Here’s an earlier post on similar disruption technology.

The brands are obviously on to something, as they used identically shaped die-cut cards. These disruptive cards included a discount to encourage people to trial the services. Such innovation.

The Uber Eats card was in my letterbox, along with at least a dozen non-disrupting brands. So now I can use my phone to order cooked food delivered to my home – unbelievable.

While the Airtasker card was shoved in my hand at the shops – I think I was on a customer journey at the time. Let me recall – I had my backpack, water bottle, GPS map, crampons (just in case any climbing was required – who knows where a customer journey will take you?) and my sunblock. Yes, I remember now. I was on a customer journey to buy some bread when a random stuck out their hand and gave me the card.

So there you have it folks – amazing insights into the new ways of marketing by the digital disrupters. Fascinating stuff indeed.

Have to go now. Am going on a customer journey to get some milk. Where are my hiking boots and personas?

17th century practices drive dynamic digital disruption dollars…

15 Friday Jul 2016

Posted by in Branding, Digital, Digital marketing, Direct Marketing, Marketing

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Once again this week, I saw another media article about the amazing digital disruptor, the Dollar Shaver Club. By all accounts it is a very successful company. And so it should be. It has taken a 17th century publishing model and used 21st century technology to digitally disrupt an industry. Amazing stuff.

After all, who would have thought people would order a product remotely, rather than walk into a store, and get the company to deliver the product to them by mail? This type of innovative thinking is digital dynamite.

To think that a company can completely disrupt human behaviour by applying one of the most continually successful analogue business models to a digitally-based business, well it’s just business gold.

Let’s analyse this shall we…

ANALYZE THIS, Robert De Niro, Billy Crystal, 1999. © Warner Bros.

The business model is called the subscription model and it uses a negative option offer.

A negative option purchase is one whereby the customer agrees to have goods or services provided automatically, and the customer must either pay for the service or specifically decline it in advance of invoicing.

And this may come as a surprise to some of you dear readers, but Dollar Shaver Club was not the first to offer a negative option. Strange but true.

Columbia-House-Ad1-e1451096912812

Research indicates the subscription model first started in the publishing industry in the 17th century in the UK. Over time it expanded to the US in the 19th century when chapbooks (cheaply printed paper covered books) were sold door-to-door.

Regular readers will know that door-to-door selling is now one of the primary channels for digital distruptors like Uber, Hello Fresh, et al.

door to door

As markets grew and new technology disrupted society – automobiles, telephone, courier services, faster postal services – the subscription industry boomed. By the mid 20th century you could order books, magazines, vinyl records, plates, stamps, collectibles, vitamins, cosmetics and food – all delivered to your home, using a negative option payment method.

By the end of the 20th century in addition to the items above, I’d worked with clients selling wine, nappies, car washes, food, CDs, DVDs, education, tools, newsletters, coffee and more on a negative option subscription model.

In fact, any regularly consumed item is perfect for a subscription model – as long as the cost of delivery is not prohibitive. Many business software programmes are now sold on a subscription service – including this blog platform for example.

So let’s quickly look at Dollar Shaver Club.

shaving

In Australia they provide razors for either $4, $7 or $10 per month. They mainly promote their business using the digital medium of television. You select the offer you want from the website and then keep an eye on your letterbox. Your razors arrive by post and that’s one less item you need to worry about when you go shopping. Marvelous stuff.

These digital disruptors are bloody geniuses. Who’d have thought hey?

But congratulations to the lads who built the business. They understand that technology changes – human nature doesn’t. Humans all love a bargain and as the laziest species on the planet, we love things made easier for us. Tap into those two emotional triggers and you can make money.

Seems the adage is becoming standard practice – the more things change, the more they stay the same…

So in summary, here’s the lesson: if you want to go forward in digital disruption, just look backwards…

I’m off to a meeting, better have a shower – where’s my razor?

Youi’s awesome marketing automation is still failing awesomely – even for ex-customers…

02 Thursday Jun 2016

Posted by in BIG DATA, Branding, Content Marketing, Customer Service, Digital, Digital marketing, Direct Marketing, Email marketing, Marketing, Marketing Automation, small data, social selling

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Regular readers of my musings may recall the appallingly mediocre service I received at the hands of Youi. I eventually rang them to ensure they had cancelled my policy, because they were still charging my credit card.

The lady who served me was wonderful and agreed I had received shocking service. She fully understood why I was leaving and was going to raise the issues with her supervisor. The supervisor was probably an awesome supervisor, most likely wearing lycra and a cape. After all, Youi constantly tell us how awesome they think they are.

awesome service

An awesome Youi supervisor?

At the end of the call, the customer service lady said I would receive an automated survey. I mentioned I was aware of the survey (see previous post). I explained it was designed by fools and didn’t allow me to rate individuals like her really well, as it wanted an overall rating for Youi.

She agreed the survey was badly designed and wished me luck. And you guessed it folks – the survey never arrived.

I haven’t been a Youi customer for a couple of months now. So I ask you dear reader, what do you think arrived in my inbox yesterday? Yes, that’s right, another Youi email asking me to “share my winter warmers” – as if I was still a customer. There’s even a hashtag #winterwarmers to create digi-credibility.

Here’s the first screen:

Youi 2

Malcolm, do you have a winter warmer to share?

What is going on at Youi? Why is the marketing automation so appallingly bad? They have my complaint on record, in numerous blogs, social media posts, emails, phone calls and text messages. I’ve cancelled my policy. I am an ex-customer. As John Cleese stated in the famous Monty Python dead parrot sketch; “this is an ex-parrot, he’s ceased to be”.

parrot

And I’ve ceased to be a Youi customer – yet their marketing automation technology is still sending me customer communications – I bet their digital marketers call it content marketing? Why do they accept such marketing mediocrity?

Here’s the second screen:

Youi survey 2

Even if I was a Youi customer, how am I supposed to remember the name of the person who served me, so I can mention them in my winter warmer? Certainly their CRM system wouldn’t be able to identify anyone linked to my account – that would require a simple computer system that works. And it’s pretty obvious Youi’s doesn’t – work that is.

How is it possible that I cancel my policy, have a customer service person state they are raising the reason for my cancellation with their awesome supervisor, and Youi still gets it sooo wrong?

Youi’s ridiculous tag line is “we get you”. Well they (and their marketing automation) obviously get you riled, frustrated, upset and p***d-off at the time-wasting they cause and the lack of service. Not to mention the lack of faith they create in modern data-driven automated marketing.

Worse still, even if I was a customer, they want me to go to their Facebook page and help grow Zuckerberg’s bank account, as well as influence my social feed to Youi-oriented posts for the next month. What planet is the Youi marketing team living on?

So dear reader, should I give them a red hot winter warmer and share my awesome customer experience journey? (I had to get some marketing jargon into the post) If you have a minute, please let me know your thoughts thanks.

poker

Here’s a winter warmer for you…

And if I am no longer a customer, does it mean Youi is in breach of the Privacy or Spam Act, by using my email address without my awesome permission?

Hmmm, maybe I should send an awesome complaint to the Privacy Commission – then Youi would really get me…

#youi
#winterwarmers
#awesome

The essential media channel most successful digital start-ups can’t do without…

31 Tuesday May 2016

Posted by in Advertising, Branding, Digital, Digital marketing, Direct Marketing, Marketing, Media, Sales Promotion

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Here’s a quick quiz for you digital marketing experts:

Question: What do all these online brands have in common?

Google, Uber, Kogan, Catch of the Day, Deals Direct, The Iconic, Hello Fresh, Helpling, styletread, carnextdoor, suppertime, Charles Tyrwhitt, Naked Wines, Virgin Wines, Marley Spoon and loads of other digital retailers…
(Hint: Direct marketers have an unfair advantage here)

Answer: they all rely on print as their most valuable media channel for acquiring new customers.

That’s right folks – print technology. You know, that ancient old-fashioned relic of a media channel, arrogantly ignored by so many naive digital marketers?

inserts

printed inserts are key to new customer acquisition

FYI a quick piece of digital advice – if you are an alleged digital marketing expert who advises clients to only use digital channels, or a digital marketer who only uses digital channels, you may need to rethink what you do. Because if you are not using the proven channels and only using the (often) unproven digital channels, you really should leave the industry. You’re giving it a bad name and costing marketers a sizeable fortune.

I’ve written previously about Google’s use of direct mail. You’ve probably received some of their mailings. So let me share the ParcelPush story with you.

Bjorn Behrendt is a successful German entrepreneur with a background in online direct marketing – also known as digital marketing. He launched styletread, an online shoe store, in Australia. He then sold it for loads of money. Now he’s launched another three digital start-ups in Australia to service digital retailers. And these start-ups are all print-based businesses.

Gotta love it when one of the fastest growing digital start-ups, which exists to service digital start-ups, is providing print services to those digital start-ups!

If you’ve worked in direct marketing, particularly online retail or mail order, you’ll probably already use printed inserts in fulfillment parcels to acquire customers. This channel is at least 50 years old.

But if you don’t have any DM experience this channel might be new to you. Bjorn discovered printed inserts when he owned styletread. Loads of other online retailers asked if they could put their inserts in styletread’s shoe boxes when they were delivered to customers – for a fee of course.

Long story short, Bjorn partnered with Australian Craig Morris and launched ParcelPush – a specialist business owning the rights to access online retailer’s fulfillment boxes/parcels. They pay to insert a branded envelope into them. Then they sell inserts into those envelopes to other online retailers. For example, in the Aussie Farmers Direct fulfillment box, they insert an envelope branded “Aussie Farmers Direct” and it is filled with third party offers and samples.

logo

This has become one of the cheapest channels for online retailers to acquire new customers. After all, they are making offers to people who have already bought a product online, so these prospects don’t need to be educated to shop online. It’s the same process as mail-order companies that used inserts to convert existing mail-order customers to buy other products by mail-order. What’s old is new again – again.

More importantly they are using tactile media – the media that affects all five senses – sight, sound, touch, smell and taste. Digital media only affect sight, sound and touch, so are relatively limited in their customer engagement ability. (I had to get customer engagement into a marketing blog to demonstrate my digi-credibleness). As I’ve said before the physical nearly always outperforms the virtual.

Most digital marketers struggle to make digital channels profitable for customer acquisition. The digital channels are much better for retention and repeat business.

Here are some samples of the inserts – all shapes and sizes:

Parcel Push 2

Parcel Push

In addition, and as a result of the success of ParcelPush, they’ve also launched two other print-based businesses:

www.letterboxpush.com.au – this is a competitor to the Yellow Envelope and other distributors of catalogues and brochures into letterboxes.

www.printpush.com.au – this is an online print business. Who’d have thought we needed another printer? But the ParcelPush print volumes have made it possible to offer good value printing – and distribution.

So if you want to succeed with digital marketing, here’s some career advice. Find a grey-haired direct marketer and buy them a drink. Then sit back and listen. They’ve lived through and created more disruption in marketing than anyone else in history. And they continue to do so. You’ll be surprised how fast your career takes off.

But remember, just because digital marketing techniques are new to you, doesn’t mean they’re new to the world. Technology changes, but human’s emotional reasons for buying remain constant…

The future of marketing is the same as it was 32 years ago – according to Marketo

11 Friday Mar 2016

Posted by in Advertising, Branding, Digital, Digital marketing, Direct Marketing, Email marketing, Marketing, Marketing Automation, Sales

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In 1984, Apple launched its first personal computer to change the future of computers. And in 1984 ADMA held a 4 day conference in Sydney at the Regent Hotel in Circular Quay. It was a huge success and where I first met my good friend and business partner, Drayton Bird.

Apple

On one evening, there were two boats for the delegate’s harbour cruise. The majority of the delegates crammed aboard the first boat, which left a small handful for the second. Mr Bird and I boarded the second boat. Despite our best efforts all evening, eating prawns and oysters, while drinking for Queen and country, we hardly put a dent in the seafood. We did give the beer and wine stocks a decent nudge though.

The topics at the ADMA conference included such things as the future of marketing, acquisition and retention, CRM, customer relationships, customer contact strategies, touchpoint analysis, data driven marketing, personalised messaging and much more. The consensus was the future of marketing was not mass marketing, but direct marketing – how to acquire and keep customers profitably – driven by relationships, data, insights, computers, testing, tracking, analytics and relevant personalised creative delivered in context.

There was nothing really new though, as marketing has always been, and always will be all about, acquiring and keeping customers profitably.

So it was with a sense of deja vu, I attended a breakfast seminar this week in the MCA, located next door to the former Regent Hotel (now the Four Seasons). It was run by Marketo, a very successful marketing automation software company – and it was about the future of marketing. (Hint – you can always draw a crowd when you’re predicting the future).

fortune teller

Predicting the future of marketing…

Of course there were the obligatory marketing buzzwords – our industry would die without them: these included “customer journey”, “incremental customer journeys”, “customer journey tools”, “customer engagement”, “engagement marketing”, and the new impressive job title for senior marketers – “the CMO”.

It’s interesting how a job title changes over time. The head of marketing used to be the VP of Marketing, or the Marketing Director, or the National/Regional Marketing Manager. Now the same role is the CMO – and they occupy a similar spot on the corporate food chain as they did in 1984. Though they are only ever addressed as an acronym – CMO – never Chief Marketing Officer.

CMO-tenure-feature2

But I digress.

Marketo’s business depends on marketers believing the future of marketing lies with computers and software that automates what humans used to do. So we were told mass marketing is dead – despite it being everywhere you look on posters, public transport, buildings, television, radio, in letterboxes, cinema, the internet, sports clothing, coffee cups, etc.

Curiously there were Marketo branded cups, booklets, pens, lanyards, banners and clothing everywhere you looked at the event – it was a riot of purple – which sort of argued against the mass media argument, if you get my argument?

Marketo 1

Marketo’s mass marketing was everywhere…

And certainly the Ehrenberg-Bass Institute for Marketing Science, publishers of the brilliant book “How Brands Grow” wouldn’t agree mass marketing is dead. They’ve proved it using science and customer data.

Apparently campaigns delivered directly to your customers to sell them stuff, via email, mail, phone etc, are also dead. Yet the seminar, which was free, was promoted directly to me via email. Go figure? But I’m easily confused.

So the future is not about mass marketing or even directly selling to your customers. What fool wants to sell things to stay in business? We were told the future is all about customer engagement – connecting with customers on every touchpoint in their buying journey – using data and computers to delivering your non-selling messages along the way.

Given Marketo’s business model though, one might cynically believe their predictions for the future of marketing are a tad biased?

I suspect Bob Hoffman, the Ad Contrarian wouldn’t agree with them either. While the event was being run, he published his latest blog titled Data Vs Probability in which he candidly argues: the more you study data, the more you realise that data is just the residue of probability – brilliant insight.

The speaker summarised by revealing the following bullet points as the key things we all need to understand about the future of marketing:

  • Relationships
  • Listening
  • Marketing everywhere you look
  • Outcomes
  • Context
  • Engagement marketing

So in summary, nothing has changed in 32 years – even the location for marketing events.

Technology changes, humans don’t. We still buy emotionally and justify rationally. Only now we have loads more channels in which to learn and buy – and marketers have loads of new channels in which to advertise (sorry, I meant place their content in context).

The problem for marketers of course is what I call “The John Howard Conundrum“. Just as he put it to Australians in his 2004 election campaign: “Who do you trust to run the economy…” – now marketers have the same conundrum as voters did: “who do you trust to do your marketing in the future?“

John Howard

Who do you trust to do your marketing?

I do like the good folk at Marketo, they put on a great show – but I’m not sure the average punter really wants brands to have computers engage with them and follow them through life on their buying journeys – whatever that means.

Most research I’ve seen, concludes customers don’t care much about brands except in the moment they buy or when something goes wrong. People don’t awaken and rush into the day looking for a relationship with their toothpaste or a tin of sardines, for example.

Unfortunately much of the customer engagement software we’re being sold, is driven from the marketer’s point of view, not the customer’s, and leaves cigarette burns all over the punters in its wake.

But the brekkie and coffee were good, the view at Circular Quay was enhanced by the presence of the QE2, while the presentation was not too heavy.

qe2

The QE2 in Circular Quay

And for a couple of hours I drifted back in time to 1984, when I was younger and enthusiastically thought the future of marketing was all about:

  • Relationships
  • Listening
  • Marketing everywhere you look
  • Outcomes
  • Context
  • Customer relationship management

Aaah, what’s old is new again, again and again…well done Marketo!

Does Marketo believe all marketers are idiots…

02 Tuesday Feb 2016

Posted by in B2B Marketing, Content Marketing, Copywriting, Digital marketing, Direct Marketing, Email marketing, Marketing, Marketing Automation, Social Media, Telemarketing

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Some of you may have seen this subject line recently. It’s a Newsflash so it must be important:

Capture 5

It’s from Marketo and it’s close to being the most insulting subject line ever written about marketers. Either that or it reveals the Marketo team is comprised of fools.

Hands-up all of you who thought email was dead or gravely ill for that matter? Who among you no longer uses email to communicate with customers, because you thought email was dead?

emaildead

Were you as relieved as I was to discover from Marketo that “email is not dead“? I suspect very few of you even believed the headline. It’s the equivalent of saying “the atmosphere still exists around planet Earth“. Of course it does and of course email is not dead – what fool would make such a claim?

cxg9kk

Here’s the supporting paragraph:

Marketers are spoilt for choice when it comes to digital marketing channels. Programmatic, social, mobile apps… the list goes on. Despite all the latest and greatest, tried-and-tested tactics still have their place in any marketing strategy this year: when it comes to true audience engagement, email is still king.

It’s true, marketers are spoiled for choice – and tried and tested tactics still have their place in any marketing strategy. And when it comes to true audience engagement (whatever that even means) nothing beats face-to-face selling, telephone, direct mail and then of course email – the science proved it years ago. So while email may not be king, it’s certainly close in the pecking order beneath the throne.

Curiously Marketo is addicted to email – it’s the primary way they communicate directly with subscribers. They certainly don’t call their subscribers on the phone – despite the obvious profits in doing so.

images

So let’s consider why they published such a headline.

Option 1 – They believe all marketers are idiots and stopped using email for marketing purposes. As you and I know dear reader, marketers have never stopped inundating inboxes with marketing messages and won’t stop any time soon, so it can’t be this option.

Option 2 – The Marketo team members are stupid, as they thought email was dead and they stopped using it for their marketing purposes, when every other brand in the world continued to use it. I don’t think they are stupid and they certainly haven’t stopped using email if my inbox is anything to go by, so it can’t be this option.

Option 3 – Maybe a junior with no experience wrote the headline? As you can tell, I’m grasping for explanations. There is no sensible reason for making such a nebulous claim – unless the Marketo marketing team is just plain lazy and decided to be sensationalist to sell their webinar? I’m leaning toward this option.

The problem with using a sensationalist headline, is it must be believable if it is to work – like the headline in this blog. And given most marketers, including Marketo’s team, don’t believe email is dead, this headline makes no sense whatsoever and insults even the most mediocre marketer.

If you are interested in catching up on the latest in email marketing then you may want to join the webinar. Dave Chaffey is well worth listening too – he’s a very smart marketer. Though I suggest he would have written a different headline. Here’s the link to the event – so my good friends at Marketo get a free plug:)

But the headline does reveal the number one truth of content marketing – any fool can type crap and sadly many fools do…

Should all alleged Content Marketers be sacked on sight?

13 Friday Nov 2015

Posted by in Advertising, BIG DATA, Content Marketing, Copywriting, Digital, Digital marketing, Direct Marketing, Email marketing, Marketing, Marketing Automation, Media, Sales, SEM & SEO, Social Media, Thought Leadership

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Your headline is one of the most important parts of your content. It attracts the reader to continue to read/watch/listen.

Of course I don’t believe all content marketers should really be sacked – it’s merely a figure of speech – but hopefully, given the current trend in animosity towards content marketing, the headline will attract readers:)

Like many, I’m concerned about marketers being duped by the latest new-new thing in marketing – another label for something that’s decades old. This time it’s content marketing and if you follow Gartner’s Hype Cycles, it seems content marketing is on its way out as we read – making room for the next bright shiny digital object. Mind you Gartner predicted there’d be no mail by 2000.

Gartner Hype Cycle

Content Marketing heading into the abyss…in the trough of disillusionment

Creating content is not new to marketing. In fact, creating content has been in our culture since mankind stood upright. Think cave paintings to record content and communicate to others.

Check out this image from a 17th century book:

1742

The headline reads “Contents“. OMG dear reader – physical evidence of content creation in publications.

As you well know, the majority of books (including ebooks), magazines documents et al, begin by listing the content you will find in the publication. Who’d have thought hey?

So why do alleged marketers claim the creation of content is new? Whose interest are they really serving?

I can only go from my humble experience, as like most marketers I’ve been creating and curating (to us a digi-term) content since nappies. More than 30 years ago when a Marketing Manager of TNT I wrote a weekly editorial article in the Daily Mirror – an afternoon newspaper in NSW. The column was called Property Protection and gave tips on home security to readers. Accompanying the column was an ad from TNT Alarm Systems – one of the brands I managed.

So the reader saw the content in two parts – the paid content in the ad and the editorial content. The editorial wasn’t earned content – I wrote it free of charge as an “industry expert”.

Let’s move forward to 2015 and rewrite what I just wrote, but using “digital content marketing language“.

I published content in the Daily Mirror, alongside the paid media. Interestingly it wasn’t earned media because I published it free of charge. It wasn’t owned media, as Rupert owned the paper. And it wasn’t paid media because that was the ad below it.

It was thought leadership delivered as native advertising, as part of my content marketing strategy. WOW, WOW & WOW!!!

Not only was it all that – but the UX (user experience for the digitally challenged) was omni-channel wonderfulness, as the reader was able to turn the page using their finger and read both the paid ad and the native advertising in an integrated format, without having to leave the platform. Unf***gbelievable. The content was consistently presented on the user interface – that’s the page, in case you’re wondering.

You get the picture.

Yet despite all the evidence, a whole content marketing industry is booming.

There’s even a private company called The Content Marketing Institute. It’s nothing of the sort – an institute that is – but don’t you wish you’d invented that money-making-machine? Call yourself an institute and you gain faux credibility and get the gullible to part with money. Hats off to the founders for getting away with it – brilliantly I might add.

Interestingly, my mate Drayton Bird recently wrote that the founder of said “institute” believes content marketing is a fad and will only last another couple years. But hey, they’ve made their money.

So here’s today’s first lesson – if you think creating content for marketing purposes is new, you need to go back to marketing college or leave the industry – you obviously know little about marketing.

Lesson number two – if you think consumers have miraculously changed their DNA and don’t consume paid ads, you are deluded and need to go back to marketing college or leave the industry – see above.

Lesson three – if you think the future is about brands telling stories without any proposition to entice you to buy (short or long term) see lesson one.

Here are some insights from an earlier post:

Amazing Insight 1: Customers don’t really care about brands

Amazing Insight 2: Customers don’t want relationships with brands

Amazing Insight 3: Customers don’t want to engage with brands

Amazing Insight 4: Customers don’t want to join a conversation with a brand

Amazing Insight 5: Customers get pissed off if you irritate them with irrelevant content marketing about your brand

But maybe I’m preaching to an empty church?

empty church

I should jump on the content marketing bandwagon and open a content creation and curation company.

But I cannot call it a content marketing agency, as there is no such thing – it’s a commercial impossibility.

It’s against the law of natural commerce to call yourself a content marketing agency. An agency is named because it earns commission from publishers for placing paid media as their agent. This is why they are called advertising agencies.

Given the entire purpose of the content marketers is to create content that isn’t for paid media – only for earned and owned media – then by its very nature, a content marketing agency cannot exist.

There are no paid media commissions involved. So there aren’t any agents – which means there are no agencies. Simple really.

So any alleged content marketing expert calling their business a “content marketing agency” should therefore be sacked on sight for fraudulent misrepresentation – oops…

 

P.S. I’m running a content marketing seminar in Brisbane in two weeks. If you’re interested you’ll need to register today by clicking here.

David Ogilvy’s Direct Marketing predictions still resonate in a digital world…

03 Wednesday Jun 2015

Posted by in Advertising, Branding, Content Marketing, Copywriting, Digital marketing, Direct Marketing, Marketing, Sales, Thought Leadership

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I was lucky enough to run Ogilvy & Mather Direct during the first great decade of growth for DM – the 1980’s. And I was also lucky enough to spend some one-on-one time with my boss David Ogilvy on a few occasions, in a few different countries.

david-ogilvy-ReasonWhy_es__1

He was passionate about Direct Marketing – it was his first love and his secret weapon. He regards DM as the reason his advertising agency Ogilvy & Mather was such a success. In his final few years running the Ogilvy agency, based in Paris, he left the advertising agency and worked from the DM agency office. He was frustrated with the wasted focus on creativity and lack of accountability in the advertising agency.

In those days the DM people lived in a different world to the advertising agency troops. We were far more involved with our client’s business, not just their advertising. We had our hands in their databases, sales lead management, offer development, call centres, marketing collateral, customer surveys, competitions and more.

As a result we were often asked to do their brand advertising and sales promotions, as well as their DM. Mind you we regarded every message as a brand message. Most of us had already worked in brand advertising, but preferred the tougher challenge of DM.

And we believed passionately about our cause. Yet we were often misunderstood by our advertising agency partners, so to help them get to know what drove us, we’d show them this video from David Ogilvy. Rather than get them enthused about DM, it just made them dislike us even more. With hindsight I see why:)

Interestingly his words still resonate today – his wave of the future had a long tail, so to speak. The internet is a pure DM channel and the skills now in demand today are those of direct marketers. Who would have thought databases and data scientists would be sexy?

ogilvy-bird-ad-2

Early 1980’s O & M Direct UK house ad – the wave of the future…

The video is only 7 minutes long but worth all 420 seconds. Get yourself a java and watch it here. Share it with anyone you know who works in digital marketing. If only more young marketers did what David did and invested in their own education at a young age, the internet would be way more successful as a marketing channel.

David’s prediction about the future of advertising also came true. The industry is now littered with traditional brand advertising agency personnel looking for work. Their skill set is in decline in the digital world and they are struggling to remain in the industry. Ironically if they had listened to their DM partners they would have had more opportunities.

spruce-image-3

A quote from 50 years ago that still rings true today…

I read DO’s books every couple of years. I always learn something, or am reminded of the advertising fundamentals so many of us ignore, as we pursue the latest bright new shiny object.

I’m off to read “The Unpublished David Ogilvy” again – always a laugh, not to mention a good education, particularly about corporate culture.

And in case you’re wondering, Ogilvy & Mather Direct was rebranded to OgilvyOne. I’ll let you judge whether you think DO would have approved…

Is the Marketing Manager now redundant in small and medium companies?

02 Tuesday Jun 2015

Posted by in Advertising, Digital, Digital marketing, Direct Marketing, Marketing

≈ 15 Comments

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Most SMEs don’t have marketing departments. They may have a marketing manager, sometimes supported by a marketing assistant. The reason is simple – these companies don’t have the marketing budget to warrant a marketing department.

This causes three problems for the business:

1. High churn rate of marketing staff

2. Lack of skills to undertake marketing effectively

3. Lousy results from marketing activity

Apparently marketing managers in SMEs turn over at a rate of about three every two years. The typical tenure is 6 to 9 months. In large marketing departments it’s more like 18 months, which is another problem but not for today’s discussion.

churn_v2

The high churn rate is due to the fact marketers tend to be social creatures. But their job involves them working in a back office on their own, or with an assistant, with small budgets on small brands. Not a very inspiring environment.

Management often doesn’t understand marketing – let alone fathom why the marketing manager isn’t a copywriter, graphic designer, website developer and PR expert all rolled into one. After all they’re a marketer aren’t they – the human Swiss Army knives of executive row?

human swiss army knife

These marketing managers don’t appear to do anything but contract external suppliers. But management doesn’t understand why they hire a marketing manager who then hires suppliers – and the circle of frustration between marketing and management continues to go around and around.

The second issue is the problem of skill. Despite what some digi-spruikers claim, there is no such thing as a Marketing Superman. Yes, those aged 50+ most of whom have 20+years of online experience running parallel with 30+ years of analogue experience – might squeeze into some tights and a cape.

It wouldn’t be a pretty site, however they do know how to use more channels than anyone else, particularly those half their age. But they don’t want these jobs and aren’t even considered for them because of the ageism in the market.

marketing-superhero

The digital world is changing so rapidly, very few can legitimately claim to be an expert in all channels. So a young marketing manager is on a hiding to nothing, as they have no analogue experience and very limited digital experience. They cannot do their job effectively because they just don’t have the skills, or the budget to hire additional specialist staff, nor to hire specialist agencies.

Consequently the work they produce is ordinary and struggles to pay for itself. The management starts asking questions, while the marketing manager starts looking for a new job.

Outsource the whole marketing department

So the role of marketing within SMEs – particularly mid-size companies – is changing. It’s now more cost effective to outsource your marketing function to an agency that provides all the marketing skill sets under one roof. After all, if you’re paying between $100,000 and $200,000 in marketing salaries and still outsourcing your marketing budget to suppliers, why not pay a marketing agency a retainer of say $10,000 to $25,000 per month instead?

You cut out the middle man. The agency has specialist marketers, media planners, website designers, copywriters, App developers, SEO skills, social media managers, content creators, et al, who can manage all your marketing, while you save on the overhead cost of a full time marketing manager/team. Assuming of course your management understands marketing.

I’m aware of a number of companies in manufacturing, retail, motor parts, direct wine sales and financial services – ranging from small to large businesses (some turning over more than $100 million) – that have outsourced their marketing department. I’ve even helped them find the right marketing agency – note I said marketing agency, not advertising agency.

SuperMan-Marketing-tactic

to outsource your marketing department…

This probably wouldn’t work in large marketing departments of blue chip brands. But for small and medium size growing companies, the outsourcing of marketing management can be a more cost-effective way to spend your total marketing budget – salaries and media/production.

Although come to think of it, I do know some very large marketing departments where the marketing managers have outsourced so much of their marketing activities, they spend their whole day just managing the outsourced suppliers. Their work-life involves exciting things like attending meetings, pouring over WIP spread sheets, approving purchase orders, haggling with lawyers for copy approval, attending shoots or mindless focus groups and other such meaty marketing marvels.

Come to think of it, I might advise my kids to avoid marketing as a career path…

Free delivery only works if customers come to the store to pick up…

28 Thursday May 2015

Posted by in Advertising, Branding, Customer Service, Digital, Digital marketing, Direct Marketing, Marketing, Sales

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If you worked in any direct marketing business prior to the internet the cost of delivering orders was always expressed separately to the cost of the goods.

It was called “Postage & Handling” or “Shipping” and it was always a profit centre. Here’s a typical US order form. It includes P&H, as well as taxes and a charge for COD:

P & H

The reason P&H is a profit centre is simple. The marketers have contract rates for delivery due to the volumes they mail or courier. So they freight the goods at market rates, but pay for the freight at discount rates.

And the customers are prepared to pay for delivery because they are buying the goods remotely. The customers understand that delivery is a price you pay when goods have to be delivered. No marketer in their right mind ever gives away free delivery – it just eats into your margin and starts the downward spiral of death by discount.

And for way too long now I’ve been warning online marketers not to give away their margins in free delivery, unless they were able to include the delivery cost into the cost of the goods and therefore the profit margin.

free-delivery

Now free delivery has come home to roost as the main reason pure play online retailers probably won’t survive. According to Scott Galloway, Clinical Professor at the NYU Stern School of Business, “the pure play model for online retail is dead, due to the rising cost of the last mile” – that’s the cost of delivering goods.

Here’s how much free shipping has increased in the US and it’s not a sustainable model. You cannot run an online business and not charge for delivery costs.

Chart

In fact, Scott predicts that unless Amazon invests in bricks n mortar stores, or at least its own physical collection points, it won’t survive. I recommend you take 20 minutes to watch his video explaining his predictions.

There are now online retailers opening physical stores to ensure their survival. And the most profitable online retail sites are those owned by traditional retailers like Macy’s for example. It’s due to the fact people can order online, then collect their goods at the store.

Go figure – who’d have thought a retail store that stocks goods, could also hand them to customers who ordered the goods online when the customer visited the store, just like handing them to a customer who walks in from the street? Amazing!

I seem to remember in the dark ages we used a phone to call a shop and order goods, then we’d drive to the shop and pick up the order. How quaint.

The crazy thing about the delivery cost problem is this – it should never have happened.

If digital marketers just realised that selling via the internet requires direct marketing skills, not digital skills, they would have been way more successful. Everything you need to know to succeed in online retail is in the direct marketing textbooks and education courses.

$billions has been wasted and lost because digital marketers tried to reinvent the DM wheel. And now it’s a case of what goes around comes around – again.

Gotta go – I have to call my local Chinese restaurant and then pick up dinner on my way back from an appointment – how old fashioned of me…