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The simple reason digital marketing fails so badly – it’s not what you think…

13 Tuesday Mar 2018

Posted by Malcolm Auld in Advertising, BIG DATA, Branding, Digital, Digital marketing, Direct Marketing, Email marketing, Marketing, Media, Social Media, Thought Leadership

≈ 8 Comments

Tags

advertising, branding, digital marketing, direct marketing, marketing, media, media buying

Who’d call themselves a digital marketer these days? As the evidence continues to grow about the lies, deceit, appalling ROI, as well as agency bias towards digital at the expense of better performing channels, it’s become embarrassing to claim you only have digital marketing skills.

But we shouldn’t be surprised. Lone voices in the wilderness have been warning for more than a decade that the digital chooks would come home to roost. Though their voices have largely been ignored.

The real reason so much digital marketing fails is simple – the people working in it don’t have the right marketing skills.

The evidence is plain to see in the online advertising space. Most online ads are brand ads not direct response ads, yet the internet is a pure direct response channel.

Fact – the internet is primarily a direct response channel. Online marketing is just direct marketing, albeit at a much faster pace than analogue channels.

You wouldn’t run a brand ad in a newspaper or on TV, then measure its success using direct marketing metrics. So why run brand ads online and expect direct responses? But this is exactly what the brand marketers do every day.

FYI direct marketers are making money online – have been since day one. But they are not running brand advertising to do so. They have tested the different emerging channels and ads. They avoid those channels that don’t work. In most cases these are the social channels.

They rarely use programmatic buying. They deal direct with the publishers. This is how they’ve always worked with analogue channels, so they already have the expertise to succeed in online channels – evolution, not revolution.

But the marketers who dominate online advertising are mostly brand marketers and that digital peculiarity, the fake marketer. They were lured by the magic of its measurability.

The magic of measurability

Unlike direct marketers, they had no prior experience of direct response measurement. The “response drug” in the form of open-rates, click-through rates, time on page, downloads and (occasionally) sales, hooked them like teenagers having their first drink. This measurability stuff was the secret marketing hooch they craved.

And just because measurability was new to them, they assumed it was new to the world.

So they rushed headlong into the online advertising world completely ill-equipped for success. To cover up this lack of expertise, they created new buzzwords to describe alleged new marketing tactics – despite these tactics being centuries-old.

To help position themselves, they used virtue signals, to manufacture FOMO. Direct marketing was called old-fashioned, implying it was irrelevant. Some even made the stupid claim that DM no longer exists (really, some fools stated such crap). All it did was reflect their lack of marketing expertise.

For those who might be confused, direct marketing (or direct response advertising) is any marketing activity whereby you communicate directly to individual customers and prospects, or they respond directly to you, in any media channel. The outcome of the communication is that there is always a measured exchange, of either dollars or data, or both.

For example, the customer provides their credit card and in return they get a case of wine, or they provide their contact details, in exchange for an email newsletter.

Branding for branding’s sake, is a secondary priority with a direct response message.

But here’s the rub with direct marketing…

You are trying to get prospects who may or may not know your brand, to do what you want them to do, when you want them to do it – take immediate action and respond.

That’s hard shit and requires some specialist skills, the least of which is the ability to write persuasively.

Yet the majority of people working in digital marketing have no direct marketing expertise. If they did, they wouldn’t have invented fake vanity metrics such as likes, and shares, to justify their credibility.

The brand and fake marketers have misunderstood the digital channels

Direct response is definitely not the way to sell fast moving consumer goods, in single unit sales. Why it took P&G until last year, at a cost of $Billions, to realise this fact, is a mystery.

The only reason to use direct response for packaged goods, is to sell a continuity programme or subscription. For example, that digital darling, the Dollar Shaver Club is a direct marketer and uses direct response advertising to sell subscriptions. Both analogue and digital wine clubs also sell wine by subscription.

The process is known as “negative-option” and I’ve written about it before. The marketer delivers products on a regular basis, say monthly, until the customer says “stop”. This is a way of marketing that is more than 100 years old and goes back to the days of mail-order. It’s not new just because we have an internet.

The more they failed the more they created spreadsheets of bullshit

These “digital marketers” tried to justify the poor branding results with vanity metrics. They even created jargon such as “customer engagement” to make the metrics appear genuine. When the vanity metrics failed, they just increased their tracking to create even more spreadsheets of bullshit. They attempted to confuse the world with useless data to convince us they were legitimate.

Sorry folks, but data without dollars is just doo-doo.

Steaming pile of data doo-doo

The tracking eventually became stalking as they desperately tried to get sales, from ads that didn’t sell, to people who didn’t want to buy. Have you ever seen a grocer chase a customer out the door shouting offers at them, just because the customer picked up a lemon then put it back without buying? Welcome to the world of remarketing – placing cigarette burns on your customers long after they’ve left you.

Read Bob Hoffman’s brilliant Badmen for the appalling truth of the tracking, stalking and the fake world of online metrics.

Playing in the fringes

Any direct marketer will tell you, when you are marketing to a mass audience and chasing a response, you are always playing in the fringes. You don’t know when people are going to buy. That’s why you need to give them as much information as possible, plus some incentive, to help them make a decision in your favour.

Here’s an example. If a product is only bought once-a-year, then on average, in any single week, only 2% of the annual market is buying – 50 weeks PA x 2% = 100%.

This means if you deliver say, a direct response insurance ad to 100 people (and you don’t know their renewal date) then on a good day, you could expect at best maybe 2 people to buy – assuming you capture 100% of the 2% of people in the market that week. You’ll be partying like its 1999 just because you made two sales. It’s pretty obvious to see why trying to sell single bottles of shampoo via digital channels won’t be profitable.

Given this market reality and the complete lack of involvement in online ads by website visitors, marketers should not be surprised that online ads rarely get one tenth of sweet FA worth of clicks. Any direct marketer worth their salt could have told them these ads wouldn’t pay off.

If you’re a mass marketer, in most situations, you’re generally better off not running ads online.

 

If you really want to do brand advertising, change the way you buy media and dominate web pages for long periods to create awareness. Do not simply run an online brand ad and measure it by impressions or click-through rates. Measure it as you would the ads in other channels. And never rate vanity metrics such as likes or shares or customer engagement. You’ll just waste your money.

Once you build your database you can then encourage your customers and prospects to download your app. Then you can gradually reduce how much you spend with online advertising, as more of your audience migrates to your app. You’ll still need to advertise though – read Byron Sharp’s “How Brands Grow” to learn why.

To get your customers and prospects to switch to your app, you’ll obviously need an incentive.

Where are those steak knives?

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When will marketers and agencies call ‘transparency’ for what it really is…

08 Friday Dec 2017

Posted by Malcolm Auld in Advertising, Digital, Digital marketing, Marketing, Marketing Automation, Media, Social Media, social selling, Thought Leadership

≈ 4 Comments

Tags

content marketing, digital marketing, influencer marketing, marketing, media buying, media planning, programmatic media, social media, Transparency

There is no other industry in the world more hooked on the drug of jargon, than the marketing industry.

We are constantly inventing meaningless new terms for the same old thing. For example, earned media = publicity. Omni-channel = multi-channel. And so on…

One reason for this, is that people new to marketing (digital marketers) believe marketing was only invented five days ago and everything new to them is new to the world. My friend Drayton Bird demonstrated this in NZ recently.

Another example of our jargon-based mentality is the word the industry has recently manufactured for “dishonesty“. Its use reflects appallingly on the whole marketing industry. Rather than admitting that the industry, particularly the digital marketing segment, is chock-full of cyber-hustlers, liars and money-grabbing spivs, we’ve avoided stating the truth and instead, created a buzzword.

In the marketing industry “dishonesty” is now known as “transparency“. And this buzzword is being flogged to death in talkfests as the amazing solution to dishonesty, even though dishonesty is never mentioned.

In his weekly newsletter, Bob Hoffman recently wrote that Transparency is the phoney flavour of the month. He highlighted how talking about transparency, rather than transparency itself, is all that the industry is doing, giving these examples:

  • Mark Zuckerberg says he wants to bring Facebook to an “even higher standard of transparency.”
  • Google has issued a “Transparency Report“
  • IAB has said “Transparency Is The Key To Programmatic Success”
  • Marc Pritchard of P&G, gave an “…impassioned speech on transparency.”
  • Keith Weed of Unilever, has “…demand(ed) more transparency” from digital media.
  • Sir Martin Sorrell of WPP, said “it’s important to be transparent.”
  • 4As issued the “4A’s Transparency Guiding Principles of Conduct“
  • ANA even created and celebrated Transparency Day!

As Bob asked – Was there a parade? Did you have a Transparency Eve party?

As we all now know folks, the major publisher platforms and sellers of digital advertising have been lying for years. And now they’ve been caught with their hands in the till. But instead of admitting they are dishonest, conducting mass sackings of the people involved and cleaning up the system, they’ve created a buzzword – transparency.

Now everyone in the industry must worship at the altar of transparency, using the George Costanza belief system- it’s not a lie if you believe it.

And the industry prophets deem we must have even more transparency. A whole transparency industry is spawning. An Institute of Transparency will be created. Seminars, white papers, thought leadership and books will be published about transparency.

Explainer videos and transparency personas will abound. And like the cyber-hustlers who call themselves Linkfluencers or Socialfluencers, there will now be Transparinfluencers to guide you on your transparency journey.

Once enough noise is made to completely blur the truth, transparency will transform into the goddess of honesty. All the negative publicity will disappear. (or should that be, all negative earned media will disappear?).

Reminds me of the mindless followers of The Holy Gourd of Jerusalem in The Life of Brian.

Hallelujah – it’s a transparency miracle!

Transparency – it’s a miracle…

And like many things digital, nothing will change. The industry will continue to remain dishonest, sorry, I mean transparent. And the digital publishers and sellers will go back to what they do best, making money at the expense of their advertisers.

I think I’ll go watch Brian again, just to cheer me up – where’s my VCR?

Transparently connect to me: www.linkedin.com/in/malcolmauld

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