So, Ms. Advertiser, to what medium do you owe your great success?!??
We know that perhaps the greatest aspect of direct marketing is that it’s measurable. That means no more guessing about what works and what does not – no more, “I know that half the money I spend on advertising is wasted, I just don’t know which half.” Well, with online and offline communications, the integration of digital and traditional mediums, the attribution lines have once again blurred. After all, just because I know that a customer received my direct mail piece and bought that new product does not necessarily mean that she did it as a result of receiving my offer through the mail. She could have found me through an Internet search or seen my ad on TV or noticed my Free Standing Insert in the Sunday paper. I mean, really, as the advertiser, how am I supposed to know what prompted the sale?!?
Well, let’s take a step back. Some mediums are more measurable than others. For instance, a consumer can shop on the Internet and find out that you’ve got the best product at the best price, but then go to your store location to actually make the purchase. What caused the sale – your presence in cyber space or the fact that you had a convenient store location? And how do you attribute a marketing cost to the transaction? Is it a portion of your website’s development and maintenance cost or some factor around the depreciated cost of your store location?
Let’s add direct mail to the mix. Let’s say that that same customer who found you on the web also got a direct mail piece from you with an offer to purchase online or at a store location. Now, unlike the customer that just shows up at your store as a result of who knows what – maybe your broad-based advertising (web and store front) - you actually know that your advertising message reached this particular individual. Whether or not you want to attribute the sale to your direct mail is a matter of how you wish to account for your marketing investment and, to a degree, your faith in direct to consumer advertising.
It’s an industry standard today to set up test and control groups to attribute results to measurable mediums. This process is usually called ‘lift over control.’ So, the sales attributed to direct mail, in the above example, would only be for the percent lift in sales above the overall sales for the targeted group during the campaign period. The rationale for this attribution is, “everyone else would have come in my store anyway (without receiving the mail).” This, in effect, gives nearly 100% credit or attribution to all other non-measurable media and discounts the results for the one medium you can measure. I get the intent but I struggle with the outcome.
One way of looking at the impact of direct mail or lack thereof is to just stop mailing, in favor of mass media advertising. That decision by one client was a subsequent decrease in sales of about 35%. But it made the bottom line look better. The problem now is what the bottom line will look like a year from now when the new customers generated by direct mail are no longer there.
So, direct marketing success is still somewhat subjective even in a world of precise targeting, tracking and measurement. It still has to do with what you believe to be true – “who are you going to believe, me or your lying eyes?” The numbers you can track or the numbers you achieve from all advertising channels? Both tell a story but only one tells the truth (of what really works).