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

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?

8 Comments

  1. Excellent as always Malcolm. The digitally-powered rise of the fake marketer has irritated me for years. Somehow people have changed completely in 10-15 years, and everything that’s been learned through years of testing and analysis no longer works. At least the charlatans would have you believe that…

  2. Hi Malcolm,

    Love your writing, but have to take issue with two statements that are fundamentally unsound or misleading.

    You write “Most online ads are brand ads not direct response ads, yet the internet is a pure direct response channel.”

    Firstly, this buys into the DR v brand debate, are they indeed separate? However, the bigger issue is that it is absolutely incorrect (based on data) to say that the internet (whatever that means) is a pure direct response channel.

    Yes, the internet is good for DR when well executed, but I have been personally involved with numerous campaigns where we created digital first campaigns that were brand focused, and achieved superb unprompted awareness numbers. And I am not talking about startups, but large multinationals.

    If you think that the internet is pure direct response channel, then you ain’t doing digital first brand campaigns right – which is in fact unfortunately in the majority of cases is exactly what happens. Most “digital” marketers don’t know what the hell they are doing and don’t understand the fundamentals of marketing.

    Secondly, your advice as to how to use online advertising for brand advertising is, quite frankly, terrible, and it is no wonder that you think brand campaigns fail online if this is the approach. It is foolhardy to dismiss programmatic and only go direct to publishers. You do realise that digital video lookalike is incredibly effective on a brand level? Please don’t tell me your references to digital are only with regard to static display! I also disagree with the idea of dominating a page/site for brand awareness. Completely unnecessary. As you are claiming this is the only way, please show me evidence. Otherwise, yours is just an opinion.

    I agree wholeheartedly with your metrics points. But a lot of this article is simply claptrap that appeals to an echo chamber. Bob Hofman’s Badmen diatribe makes for entertaining reading, and indeed the digital ad world attracts the charlatans, but again it is misguided.

    If I was a brand, I would be up the creek if I followed your advice in this article.

    But keep writing, we need to call out malpractice.

    Cheers,
    Peter Bray

    • Hey Peter, thanks for your comments, appreciate the feedback. When one leads with one’s chin, one will inevitably get an uppercut. I’ll answer as much of your comments as possible. As Drayton Bird and others say, online advertising is just accelerated direct marketing. Very few brands have ever used digital as their primary brand-building channel.
      I was generally speaking about online advertising (publishers’ sites and social channels)- not specifically digital lookalike, or proprietary You Tube channels – I should have made that clearer. I suspect the post would have been too long.
      I’m glad you have success with branding – you’re a rare beast, make sure you charge heaps. In my experience, whenever we switch a brand ad – MREC/Banner/tile/tower/etc (static/gif/video) to a direct response ad, or at least offer a CTA, the results improve astronomically. We just revised a major oil company’s results for their brand ad on a lifestyle site and improved results by more than 4,000%, just by putting an offer in it. They wanted click-throughs and downloads.
      We can agree to disagree on dominating the page – it’s more a matter of frequency, as the frustration we’ve found with programmatic is how often it only displays the ad once to an individual, they never see it regularly, despite the machine-tracking. Testing will tell, which is why I suggested testing programmatic. I’ve attended eye camera research and most people have no idea what ads they viewed on a page within 30 seconds of seeing them. There is so much colour and movement by different advertisers, nothing resonated. The lack of clicks backed up the lack of awareness and recall.
      Most of my clients or my own online businesses never do “digital first” – history/experience directs us otherwise. The exception is when we lead with email prior to other channels. My online (and retail) travel agency’s most powerful channels were email, mail, telephone, press and TV for example. Social channels and online advertising rarely paid for themselves.
      My opinion on Bob’s book differs to yours. I believe it will be regarded as seminal in helping to drive the change in attitude towards the legitimacy of the digital marketing industry.
      Am hoping this isn’t regarded as claptrap. The comments to date have been some of the most positive I’ve ever received. My client’s brands aren’t yet up the creek from my advice, but time will tell:) Your feedback is very constructive thank you.

      • Hi Malcolm

        I appreciate that we can have a grown up conversation about this with radically differing viewpoints. Look forward to catching up in person some time to discuss. This dialog is what we all need.

        Cheers,
        Peter

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