Direct Response is Dead.
RIP
☠
RIP ☠
Direct response is dead, and it isn’t iOS that killed it.
If you’re reading this, you may have been asking yourself this question for months now. The rumor mill has been spinning and word on the street is that major advertising platforms are seeing platform-wide ROAS decrease. Despite their best efforts to boost ad engagement and increase liquidity (daily active users) they are seeing less revenue reported per ad account per ad dollar.
Some will blame tracking, some will blame targeting, and some will blame “bad PR cycles”.
The truth is, it’s both some of the above, and none of the above.
So what really killed the direct response renaissance we’ve been basking in as growth marketers for the last decade?
The consumer did.
Their trust in our go-to direct response channels is eroding, and they’ve become numb to over-the-top monetization of their favorite media channels.
In addition, privacy is now part of the main stream consumer consciousness (source: TechRepublic), and those that do engage are limited in both attention and trust in their first touch points.
The reality compounding it all is that direct to consumer expectations have shifted. Consumers expect more from brands they discover online (see: Shopify Social Commerce Trends), and they have grown more sophisticated in their ability to assess a whether or not a brand fits their preferences and lifestyle through digital first means.
If you’re a growth marketer and this has been worrying you, fear not.
There are solutions, but they require discipline and effort.
Here’s what you can do about it:
Define how your Mission and Vision align to the Growth Marketing Response Spectrum
Your mission and vision are critical to your success.
They are the lens that focus all internal and external activities, and they are the top of the ladder for objectives and goals. If you’ve yet to define a clear mission and vision statement for your brand, it’s something you may want to give thought to, as it then becomes more clear in what type of response you can garner from your audience.
Below, an example:
Brand: Green Apple Apparel Inc.
Mission: To progress the interests of the earth with an eco-conscious fashion business.
Vision: Achieve net zero environmental impact on our entire consumer model of business while producing the highest quality of apparel goods possible.
Response Alignment: Brand & Product
Why? The mission gives you the warm and fuzzies, and the product details should align to a strong vision that resonates with the target customer. Leading with Branded and Product led response campaigns will yield more long term results and demonstrable “Halo Effect” around the brand, even if direct response campaign have higher ROAS on a shorter time window.
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But what if my mission is to sell fidget spinners to teenagers on TikTok that do a viral dance with them?
Then the answer is simple: pivot.
Left: An overview of the Growth Marketing Response spectrum that should be defined at every campaign level.
If you’re a growth marketer reading this, you’ll know what direct response is, and more than likely have run these campaigns in the past.
The last decade of digital marketing has been a bull market for DTC (direct to consumer) brands running direct response marketing campaigns as their primary growth lever.
The market, however, has shifted.
Now, more than ever, brands need to familiarize themselves with the left side of the spectrum. You need to build trust and community with early adopters, and leverage that to demonstrate value to new customer who come from later stages in the product adoption curve.
Great, so now I have a sense of what my brand’s mission and vision is, and how my unique offering maps to a growth marketing response spectrum.
Now what?
Let’s take it to the channel and campaign level.
2. Map your channels to a framework for Response-Channel Fit
The channel level is where you fit your message to the medium, find your audience, and deliver your campaigns.
Depending on your maturity level as a brand, you should have an understanding of what channels work best for you, and why.
Taking this a step further, you can even assess individual campaigns based on the below matrix.
An example from a brand in my current portfolio are three categories of campaigns: BAU (business as usual), Seasonal, and Promotional.
BAU (or evergreen) campaigns create their own unique placements within the response-channel fit matrix. Seasonal tends to be more product specific messaging, and promotional campaigns are sales focused.
The breakdown then, is as follows:
BAU Campaigns = Branded response - FB, TV, Direct Mail
Seasonal Campaigns = Product response - FB, Google, Pinterest
Promotional Campaigns = Direct response - FB, Google, Direct Mail
Intuitively, growth marketers get this.
You don’t want to refresh your TV creative every time there’s a holiday right?
But you would be surprised how many growth marketers don’t sit down and create an actual framework, collect the data, and map their campaigns accordingly.
We get so heads down in execution, we often forget to take a step back.
Left: a sample evaluation of your marketing channels based on ability to elicit response types for your brand. A key dependency is running through the four fits framework first. i.e. market model fit being a consumer category in e-commerce affects your channels response potential.
3. Focus on the Halo Effect
If you’ll indulge for a moment the self serving sub-title, I can explain.
A Halo Effect is a cognitive bias that imparts a positive sentiment towards an object given the nature of it’s good looks.
Psychologists often describe this in relation to celebrities, influencers, or billionaires. We’re quick to forgive their mistakes because of the Halo that they’ve built around themselves.
The key difference between Psychology’s study of the Halo Effect, and the Halo effect from a Growth Marketing perspective, is that Psychologists often refer to this as the “Halo Error”, in which it is attributed to a lapse in judgement. In Growth Marketing, we want the Halo Effect to represent soundness in judgement, and perform a marked cognitive bias or brand affinity based on accurate and authentic characteristics.
As mentioned previously, consumers are now more informed than ever before. E-commerce has matured, as well as the digital channels that play a role in driving e-commerce forward.
A demonstrable and impactful Halo effect is more important than ever before; and it is surprisingly simple to achieve.
All you need is authenticity.
To illustrate the point, let’s think about this in reverse.
Have you ever come across a brand that feels inauthentic? Have you ever seen a message delivered on a channel that feels like it just “doesn’t fit”? What makes you immediately scroll past an ad or a brand you see on a social media channel?
You probably have a few ideas. Fakes/scams. Discount/cheap sites. Cheesy user reviews/UGC. Cringey ploys to court a certain audience that you’re obviously in. The list goes on.
What could those brands have done differently?
Every time I scroll past something quickly, I often take a second to scroll back and think about what I would do differently.
Recently, I saw a car commercial on TikTok.
It was just a straight up vertical cut of an existing commercial wedged in between my binge watching of history-tok and food-tok.
It was abrupt, abrasive, and off-putting. In a word: cringey.
In their defense, they didn’t try to do a TikTok dance about the car, so I give them credit there. But the cut and paste effort just felt lazy. And I don’t think it was the channel to deliver a branded response from, as the average TikTok user only watches 16% of a 10-15 second video.
Is that really enough time to convert me as a brand enthusiast, or get excited about this “new generation of luxury”?
No.
But I do buy stuff of TikTok all the time. It’s been a great product and direct response channel.
So what could they have done differently?
Well, if we choose to ignore the core product channel fit question about whether luxury cars should even be on TikTok, we may introduce our previously mentioned channel response matrix.
And if used correctly, we’d likely find incompatibility in the type of response being pursued with the more transactional nature of the channel. In other words, how dare you try to make me feel emotions while I’m binging TikTok.
But that’s not to say the channel doesn’t play a role. Perhaps there’s another campaign on the docket that is more product focused or direct response focused. Why not talk about some key product highlights and your cool new engine in between a few racing videos for racing fans? Or something promotional and direct response in nature if it’s timely to an event (i.e. giveaway for Daytona).
All that to say, the channel itself, as it relates to this brand, is not a good fit for brand response campaigns that require attention and illicit emotions.
If you’re finding the above all a bit confusing, let me simplify things for you.
You will 100% be OK if you focus on one thing and one thing only: being authentic.
Authenticity is felt at every level for your brand, and it starts with the first customer touch.
Ensure it stays consistent and ensure you’re staying true to your brand’s mission and vision, and you will end up just fine.
4. Evaluate New Mediums with Structured Testing
So now your brand is driving a demonstrable Halo effect around it from multiple foundational channels. You have matched your campaigns and channels to a response spectrum and have a healthy balance between DR, PR and BR that fit your brands Mission and Vision.
But still, you can’t shake the feeling that your audience is just on to the next thing and there are open water opportunities yet untapped.
My advice: MVT it.
MVT = Minimal viable test.
Create a hypothesis and scope it down to a test structure to discover whether or not said hypothesis is true or false.
In my growth marketing open source library I have a set of tools for creating good hypothesis for testing.
When you’ve found strong signals from your MVTs, move onto customer journey mapping. Understanding what actions you want your prospects to take and why.
Below: a video outlining a structured approach to creating Minimal Viable Tests
The reality is many brands don’t quite understand where to go if direct response efforts are providing diminishing returns at scale.
In this situation, I might encourage these brands to structure MVTs beyond your typical direct response scope. Create KPIs that link to your Halo effect, open your field of view beyond a short attribution window and create success metrics that determine whether or not your product is heading towards product market fit.
If you stay committed to regimented testing and confidence building through both a qualitative and quantitative view, then you will see yourselves through the monumental shifts that 2023 has in store for us.
Conclusion.
Embrace Change
OK, so the title was a bit dramatic.
Direct response is far from dead.
But the direct response renaissance is over and the habits we’ve formed over the last few years of running DR campaigns and expecting them to scale infinitely are due for a change.
Furthermore, direct response can no longer be the tip of the spear in brand building.
We simply cannot launch new and innovative ideas by hurling media budget into the great void of paid media platforms.
It’s time for growth marketers to become brand marketers. And for brand marketers to become growth marketers.
Understanding deeply the relationships between your campaigns intended response outcomes, the core competencies of the mediums you deliver on, and the key metrics for success in your well defined Halo effect will pay dividends in your overall growth performance.
