I had an interesting conversation this morning with respect to Marketing.
A friend of mine was in the office with a new business partner. My friend and I have done some business dealings in the past and Dynetech is actually handling the venture management of his current business. He is a big proponent of institutional advertising and, in the past, I have had to rein him in because he wants to do so much in the institutional field and doesn’t always have the resources to be able to do it.
What ensued was a conversation that pitted institutional advertising against direct response marketing, which I thought would be helpful to our readers.
Institutional advertising, by definition, is advertising which is primarily focused towards establishing brand identification and parameters. Institutional advertising is not primarily directed towards provoking a response to the marketing message.
Marketing designed to provoke an immediate response is called direct response marketing and always seeks to have a call to action.
The call to action is significant from several perspectives.
First of all, the call to action gives you the opportunity to quantify results. For example, if I mail to 1,000 people and get 10 responses, it shows a 1% response rate. If I convert half of that number, or a 50% conversion, I actually have 5 customers out of every 1,000.
I can quantify the result.
Secondly, direct response marketing also gives me the opportunity to pay as I go. If I am paying for both institutional advertising, and direct response marketing, it’s the direct response marketing that gives me an immediate payback. I can message all I want in my institutional advertising, but there’s only one thing happening – an outflow of cash, with no money coming back– at least not when I need it to pay payroll.
Third, there is a residual component to direct response marketing. Direct marketing messages adequate to provoke a response are also adequate to create whatever the institutional branding is that I was otherwise looking to achieve.
Therefore, what does direct response marketing ultimately give me?
It gives me the ability to learn what works, get paid as I go, and create residual branding along the way.
Institutional advertising can do none of those.
Therefore, I said to my friend that there was one cardinal maxim he had to employ with respect to anything he did in marketing his new designer line of clothings. I told him that anything he did had to be coupled with a call to action. If it was coupled with a call to action, he could count the numbers, collect some money, and build a brand along the way. If it didn’t have a call to action, he wouldn’t be able to do all three of those and, because of that, wouldn’t have a clue as to whether it worked or not.
As the old expression goes, You can’t make a silk purse out of a sow’s ear. Institutional advertising will never do what direct response marketing will do for each of the businesses we all operate.