DRTV Online – If or When?
As we have all too often been guilty of saying, it doesn’t take a genius to have predicted that some of the marketing tactics used to promote free trials of nutraceuticals would come under fire. Like a broken record, we always felt it was a matter of when not if. Being right in this case brings little joy, because it only means one of many different setbacks that the performance marketing industry face. Like many, as we watched the proliferation of the fake blog and fake article space, we wondered what would come next. Why we aren’t a genius is that we didn’t think that some of the successors would include fake job sites, toolbars, and even more mobile. What we kept thinking, or more appropriately hoping might take the place of overpriced acai and colon cleansers were overpriced tchotchki courtesy of the original direct marketers, the infomercial guys.
This week, one of the two major associations servicing the direct response space held its annual conference. Similar to conferences that covered the for-profit education sector, this one continues to see a greater influx of those from the performance marketing world. Each show, they continue to level-up, going from attendee to exhibitor, and from exhibitor to sponsor. Despite the additional spending and efforts, we haven’t seen the products from the direct response space take over the main stream cpa network offerings. We can still find edu offers (diminishing), insurance, nutraceuticals, toolbars, and mobile on almost every network, but we can’t find an abundance of upside down tomato plants, ab machines, and never dull knives.
Inbound vs. Outbound
Assuming you have the slightest familiarity with direct marketing online, you will probably have some understanding of what they want you to do. Call them. The offline world doesn’t have a good way to get in touch with people unless those people reach out to them first. The online world has been a little spoiled. They haven’t had to rely on people reaching out to them to drive business. They have found a compromise, the form. There are some offline forms, e.g., the restaurant asking for a business card or contest that has you enter your information and hit submit. They make up the vast minority. Telemarketing is an offline, outbound method, but its zero intent, pure audience targeting, did not enable it to be sustainable. Yes, the offline world has, for the most part, been very successful by generating inbound requests.
Online is almost entirely the opposite. Online thrives off of an outbound culture. The whole purpose of billions in online spend is to enable an outbound dial. The best organizations have built up entire cultures on outbound dialing. It is one of the biggest hurdles to those entering online. Take an insurance agent used to fielding calls. To have the person become good at dialing takes time, training, and a willingness that is often lacking. Both are phone driven cultures, but outside of the transaction taking place on the phone, there is less in common than there might seem.
Long-form vs. Online
Click to sale is one of the long-time hurdles online. People spend a lot of money online, but they usually do it when they choose to. There are billions of dollars of commerce that transact online, and only a small percentage comes from ads. It comes from people going to Amazon, eBay, and hundreds of other branded merchant sites. The affiliate industry might generate a few hundred million dollars of sales, but almost all of it comes in the form of free trials or interrupting the intent stream with coupons. A small number influence commerce by providing true review sites or the long-tail of content affiliates. By and large, commerce is not ad driven but intent driven. Offline, it’s a completely different story.
The direct marketing world racks up billions in sales from people who didn’t necessarily set out to shop. On one extreme you might consider a home shopping television station where in theory someone watching has a high proclivity to buy. Generally speaking though, besides there being a certain set of people who will actually buy from TV, it is the medium. Thirty minute television spots go a long way to creating a desire to buy. Online doesn’t have that luxury. The closest thing it has is the fake blogs. Psychologically they do what the longer form TV programs do by getting people over their hesitancy to buy from an unknown brand. They have a less captive audience so they must resort to much more misleading tactics. The run of network, no intent, click to buy challenge is what online has yet to figure out in a sustainable fashion.
Offline to offline vs. Online to offline
In the lead generation world, the vast majority of the transactions that ultimately pay the bills take place offline. You can’t realistically enroll in school, decide on a contractor, sign mortgage papers, etc., online. Even insurance, which to some degree you can do online, people would prefer to hear from a person before deciding. In these cases, it’s an online to offline transaction, and it makes sense. Go online to research, learn more, go offline to transact. That flow is disrupted with things that can transact online like physical goods. We don’t see ads for a new ab machine with forms, because, that process is slightly disruptive. Going online to offline for something smaller opens the door for breakage. That isn’t the case with direct response on TV.
When you watch a commercial, you can’t click a button and buy it. Direct response television advocates can’t wait for that (think what mobile billing did for iq quizzes), but for now, you still have to pick up the phone or go online. A lot still pick up the phone, because it’s the natural flow. Offline to offline. There is a big opportunity to leverage the online lift as a result of a broadcast, but the best customers just call. Solving this online gets us back to the click to sale hurdle that long-form TV ads overcome. They can buy online but a simple ad saying “buy now” works even less effectively than a form to learn more would.
Upsell Culture vs. Sell now
Instead of upsell, we might call this last point of distinction ownership. In the offline realm, they might not own the call centers, but when receiving calls, they own the user. The offline world might hand off the call center person, but that call center employee is there to close that caller on the product they saw. In the online world, the marketer rarely owns the monetization. It doesn’t seem like a big deal but it impacts the attitude. In the online world, the marketers job is done at the initial transaction, be it a lead or sale. They must make their profit back immediately. Some companies will own a little bit more of the user flow. Think of an email submit offer that might come closer to breaking even on the initial transaction because they can market to them ongoing. Even they, though, try to avoid situations where they break even on acquisition. That is not as true with the offline direct response world. They often design their products to just breakeven on the initial transaction. You can’t really buy TV space for a $19.95 product unless you have some other monetization angle up your sleeve. They do. They use that $19.95 as a means for further dialog and a way to upsell them on a more profitable item once a user is ready to pull out their card. In the online world, they frontload the CPA for affiliates to be enticed to run an offer. In the offline, they don’t have a different structure and focus of loading up the profit on the backend.
