Direct Marketing vs. Branding: Round 2

July 1st, 2005 by Bob Bly

In my last post, several branding types argued that direct marketers should listen more to branding folks and follow their lead.

May I humbly suggest that maybe it should be the other way around ? because we direct marketers know how to sell ? and branding types don?t?

A case in point: General Motors.

You know all the trouble GM has been in lately; it?s made front page headlines for weeks.

But according to an article in The Week (7/1/05, p. 38), GM?s new marketing campaign is turning things around for the company ? raising market share from 25.8% to over 30%.

Did they do this by leveraging the power of the GM brand, built with decades of expensive branding type advertising?

Nope.

They did it, like a direct marketer, with an OFFER ? an “employee’s discount offer” … giving car buyers the same discounted prices that GM employees receive.

And that?s why I?m a direct marketer and not a branding guy.

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This entry was posted on Friday, July 1st, 2005 at 12:42 pm and is filed under Branding, Direct Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

54 responses about “Direct Marketing vs. Branding: Round 2”

  1. Ray Edwards said:

    Bravo Bob – dead on!

  2. Robert Steers said:

    I have to say that in my experience, as far as rasining market share in a product based environment, Direct marketing has worked more times that broad based “branding”. Value for money, ROI, engagement and the ability to quantify, in my opinion make a direct approach favourable.

    There are very few instances, these days, where I would seriously consider a large “branding” campaign. However I have seen it work better, in a few instances, than Direct Marketing. A service firm, with very little brand presence, recently conducted a year long radio campaign. Revenue increased by 50% and has continued to rise after the campaign. It more than justified the spend, and we could not have got that reach without a broad based medium.

    Love the blog!!

  3. Bob McCarthy said:

    A message to Robert (above)

    Don’t confuse direct response with direct mail. Direct response is a discipline — not a medium. Direct response can be applied to all media, including radio.

    If your radio ad has a specific offer and a call to action – and if your responses can be traced to specific ads and media placements – you are doing direct response.

    Which medium you use — eg., direct mail vs. radio vs. newspapers) is more a function of your audience. If every household in your market area represents a prospect, a mass media approach like radio or newspapers could be the right choice.

    If you want to target specific individuals (by age, income, family size, interests, etc.), direct mail offers the kind of precision you won’t find with mass media.

    The key is to try it all, track it all and measure it all. In time, you will be able to see which medium, which offers, which messages are able to produce the greatest number of responses at the lowest cost.

    As for the 50% increase in revenue, that’s always good news, and all advertising is going to help in some way.

    But can that new business be tracked back to specific ads?

    In branding campaigns, the answer is always no – although the ad agency will always take credit for it. (Is it possible the new business was the result of a new sales manager, for example?)

    In direct response campaigns – even with radio – you will be able to track each new account back to specific ads.

    With that kind of information, imagine what kind of growth you could expect next year.

    Bob McCarthy
    The Direct Response Coach

  4. Richard Leader said:

    It’s interesting, Bob, that you suggest branding people should listen to DM people, when you pitch your article as Direct Marketing Vs Branding – do you think an adversarial model is the best approach?

  5. Yvonne DiVita said:

    As usual, Bob is right on. I am just a little company struggling to reach my core market (my target is too wide, I prefer to concentrate on the people I’m confident are interested in what I have to offer — hence, my core market), and I always look to Bob to direct me. Here’s a question: Can branding be a by-product of successful direct marketing??

  6. Bruce DeBoer said:

    Integration. Let’s take Carl’s Jr. ads with Paris Hilton as an example: A strong brand awareness campaign. Sleazy, yes; but it worked. Did it sell burgers? No. Not from the last report I read.

    Brand awareness is extremely helpful but there needs to be other promotional activities that push sales; DR is one of those activities.

    DR is NOT a brand building effort but neither should it be a brand eroding activity. We shouldn’t tie the hands of DR copywriters but neither should they stray from brand image.

    I also agree that Brand marketers need to ask DR marketers what is working. Direct Response is measurable so brands need to take advantage of that backchannel.

    It’s not an either / or proposition – there needs to be a way to integrate the campaign across all points of contact.

    Bob – how about a post that says, “in what ways can Brand Marketers benefit from Direct Response?”

  7. Danny said:

    Bob,

    GM has no brand to leverage because, relating back to my comment on the previous post, their marketing message has been inconsistent with the other facets of a customers interaction with the brand. They do not listen to what the market wants before they produce their cars. GM simply produces an inferior product and backs it with inferior service.

    Unlike, say, Toyota, who is consistently “leveraging” their brand. To the tune of a +10% increase in US sales over last year, and increasing market share for eight consecutive months as of may. Without any grand “special offer.”

    Or Nissan, who has shown increased US sales for nine consecutive months. Also with no special offer.

    As I said, branding is about more than just the ads. It is creating a consistent message across the board. And until GM starts acting consistently with their message, the only way they will be able to get more people to buy it to slash the price.

    Or, they could start marketing with a message that is consistent with their behavior, so people aren’t disappointed after the sale–more Kia-like. “They’re not great cars, the service is nothing special. But man are they cheap!”

  8. Danny said:

    Let me also add that I don’t see it as an us vs. them battle as the DR folks keep phrasing it. I think it is entirely feasible to run a DR campaign and still be true to the brand. We do it all the time. But there is simply more to marketing than making the sale.

  9. Steve Slaunwhite said:

    Danny, this is going to sound confrontational, but I’m really just curious. You say, “there is simply more to marketing than making the sale”. But shouldn’t selling the product be the ultimate goal of marketing? If not, what is?

  10. Danny said:

    Steve, Of course selling the product is the
    ultimnate goal of marketing. I’m just saying there is more to it than that.

    And, yes, DR ought play a large part in making the sale. However, it must work along with personal sales techniques, service after the sale (for durable goods, like cars in Bob’s GM example) and a continuing relationship that results in repeat purchases.

    My wife and I bought a Toyota Sienna two weeks ago, passing up both GM’s employee discount and Kia’s buy one get one free promotion. And it was because we trust the Toyota brand–what they say has always been consistent with what they do in the past and my experience with GM has shown just the opposite.

    I will agree that marketers who talk about “creating the brand” are deluding themselves. The message must be consistent with the values of the company. All we can do is enhance the brand or erode it. I’m afraid all GM’s recent jump has done is created more future dissatisfied customers, further eroding it’s credibility.

  11. Bruce DeBoer said:

    The way I see it, branding IS about making an offer. It’s the Brand Promise. GM’s latest offer feels desperate. It’s selling cars but so would a “Going out of business – Everything must go” sale.

    What offer – for example – is Toyota making and why are they making constant gains on GM and Ford? Unlike GM, Toyota is consistent with their brand promise and brand performance.

    Branding is a strategy, DR is a tactic.

  12. Bruce DeBoer said:

    Hey guys, read this:

    http://www.cmomagazine.com/read/070105/culture_crash.html

  13. Steve Slaunwhite said:

    Bruce — before I became a copywriter I sold for a living.

    In my selling days, if I walked into my manager’s office and said, “I didn’t make any sales this month but I did make lots of good impressions. In fact, I communicated our brand promise to one hundred people!”

    I would have been shown the door.

    Don’t get me wrong. I think communicating the brand promise in creative ways to the target audience is a wonderful thing. But no brand strategy can ever replace the long-term business-building benefits of consistently generating leads and converting these into sales.

  14. Bruce DeBoer said:

    Steve – I’m certain your right. My point is the two have to work together. In fact, most times they probably do work well together but if it were my brand, I would want to map it out the best I could and that would be inclusive of my DR marketers.

    Both are important: brand awareness and push promotions. I do – however – understand that there are poor branding marketers who try to make DR a brand awareness vehicle. But I’m not talking about those guys.

  15. Richard Armstrong said:

    i have a rule of thumb, bob. if i hear anyone use the word “brand” more than once in a speech, presentation, or conversation … i can rest assured that they know nothing about advertising and marketing.

  16. Peter Stone said:

    Although I find the branding, (positive relationship over time = sales), arguement appealing , I can find no information in the literature, or anywhere that conclusively supports the exact claims and promises made by its proponents.

    Branding is not new.

    J. Walter Thompson established a research department in 1915. In 1920, John B. Watson, sometimes regarded as the father of behavioural psychology, joined them.

    During the 30′s and 40′s, Mr. Thompson implemented branding campaigns for clients, using radio as the medium.

    Again, in this long history, I find nothing conclusive to say that branding does as is claimed.

    We can take this question accross the sciences and we find the same conclusions. People buy, primarily out of self-centered, visceral motives. Not higher emotions. The operative word is, primarily.

    Higher emotions are influential, but not to the degree represented by various claims.

    Anomalies exist.

    Cognitive neuroscientists from Baylor College of Medicine, attempted to quantify the role of branding to preference, not sales, using fMRI (functional Magnetic Resonance Imaging), technology.

    67 subjects participated in a blind taste test. A large majority favored the flavor of Pepsi. When the participants were shown the labels before the taste test, 3 out of 4 prefered Coke. Representing a change in preference for many.

    Dr. Reed Montague, director of the Brown Foundation Human Neuroimaging laboratory at Baylor, explained: “There’s a huge effect of the Coke label on brain activity related to the control of actions, the dredging up of memories and self-image.”

    That’s indicative.

    In this case, it doesn’t require a huge leap to believe that preference, influenced by brand, leads to sales.

    But when you consider Coke’s efforts, few could match their investment of time and money.

    Danny wrote: “GM has no brand to leverage because, relating back to my comment on the previous post, their marketing message has been inconsistent with the other facets of a customers interaction with the brand. They do not listen to what the market wants before they produce their cars. GM simply produces an inferior product and backs it with inferior service”.

    If we accept this as true, and I do, then, from the standpoint of branding, I have no explanation for what Bob reported: “But according to an article in The Week (7/1/05, p. 38), GM’s new marketing campaign is turning things around for the company … raising market share from 25.8% to over 30%”.

    I’m not attempting to be cute, when I say branding, is in a brand crisis. Unqualified claims, based on logic, not metrics, leave me with the general impression that the claims are disproportionate to reality.

    Unproven claims leave branding, branded as an academic curiosity, subject to ridicule.

    Were I selling branding to the world, I might say that a positive relationship over time – branding – adds to the momentum and, therefore, cost effectiveness of your sales efforts.

    That’s a message that would sell.

    Unqualified, or disproportionate claims will not sell.

    Branding has its place, but is not the same as selling.

    Branding may enhance the sales effort to some, yet-to-be qualified degree.

    Sales will not die without a brand.

    A sales-dependant company will die without sales.

    Peter Stone

  17. Graham Strong said:

    Hi Bob,

    I’ve read most of your books and re-read them often as reference — in fact I see you as a kind of guru of the business. But I think that you are wrong here, at least in part.

    I agree that the purpose of DM is not branding, but you still have to be mindful of the brand in your writing. My case in point: one of my long-time clients is a non-profit organization raising money for regional cancer research, treatment, and patient support. I have written several DM letters for them soliciting donations. They generally go for the soft-sell approach, but this spring they wanted to go for a stronger approach. Of course I obliged… and went for the jugular. Although they liked it, they thought it was too hard-sell, and in fact they said it would be perfect if it were for OXFAM, but not for them. I toned it down a bit, and apparently it had a favourable response.

    DM is about selling (or in this case, asking for donations) but often companies have more than one marketing and advertising avenue. If DM or mail order is the only method of selling, then I agree that branding means nothing. However if a particular DM piece is part of a larger picture, then DM — in fact any single marketing approach — needs to fall in line with the marketing approach as a whole, including branding.

    ~Graham

  18. Swans Paul said:

    What is Branding?

    What is Salesmanship

    If branding is about making a customer “aware” of a product and leave at that, then Branding has very little to do with real advertising.

    Can a company survive on good impressions? If sales and profits are the heart of a business, how does branding help sales? How do catchy slogans help sales?

    Which company would a customer remember best? A company that he has bought from one, two, three,four times? Or a company that has been running funny, message-empty commercials for 5 years?

    Example: When I see a tennis star showing her legs, smashing some balls, smiling, showing her curves, then at the very end of the commercial using a camera, what am I going to remember, the hot star or the camera? Most people will remember the hot star

    And how did this branding ad help the company paying for the commercials? If anything, this “branding” style commercial has been a huge waste of money for the company. And to make it worse, the paying advertiser will never know why it’s losing all that money. Oh yeah, it’s about creating “sensation for your product”, “yeah, it’s about making people aware of your product by having that hot star using it for 1/2 a second in a 30 second ad”.
    Excuses. Excuses. Excuses. Lies. Lies. Lies.

    Last time I talk with a “branding advocate” he told me that if I were to advertise my direct marketing methods in his paper, I would steal his customers. I was shocked and flattered.
    Branding is narcissic.

  19. Jason B. said:

    I’d like to see a Direct Marketer write a sales letter to Branding types offering them a package on how to improve their branding results. Then, when they respond (in droves) we could just send them a letter saying “gotcha!” or a copy of “Scientific Advertising.”

    Would be a fun little project. Unfortunately, I have 5 current writing projects under way.

    Besides, the best direct marketers practice branding in every single ad, sales letter, inbound or outbound telemarketing, informercial, radio commercial, tv commercial, brochure and web ad – it’s called the Unique Selling Proposition and it shines through every word…

    – Jason Bedunah
    Big Cash Marketing
    http://www.bigcashmarketing.com

  20. Michael Cage said:

    Bob,

    Great question — the answer is pretty clear, IMO. Direct marketing pays the bills, folks who can sell … all things being equal … will always wipe the floor with folks solely driven by image and impressions. That said, there is no reason you can’t do both. The most successful direct marketers I know of integrate DM AND branding, reaping enormous rewards in the process.

    I wrote about it in a blog post, “Small Businesses: Direct Marketing OR Branding?.”

    Enjoy,
    Michael Cage
    http://www.EntrepreneursLife.com/

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  52. mike said:

    Advertising in all cases is about coming up with an idea that sells the product.

    A shift in a brand’s position can have an enormous impact on sales. Same media, different message, big increase sales, no direct. I’ve been involved in two such campaigns — all TV for packaged goods that worked like gangbusters for Kraft. The brand promise is essentially the offer.

    Direct people fail because they only see rules and one-offs instead of thinking long term success. Brand people fail because they only see awareness — instead of awarness of an idea that makes folks want to buy a product.

    I’ve worked as a creative in both disciplines, and I think it’s silly to be a slave to either.

    What you do need to be a slave to is the single-minded position/hook that makes people PAY ATTENTION and want to buy.

    Then figure out the best discipline on your budget to cram this home to your target.

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