Direct marketing (and the other kind)

Direct marketing is outbound, measured and designed to pay for itself.

So, the catalog you get in the mail, or the Fuller Brush man. The idea was to buy stamps (or some other form of contacting people) and make enough money on average to buy more stamps.

Before the internet, direct marketing was on a steady growth path. The science of testing and improving offers and the industrialization of systems that lowered costs meant that more and more organizations were using direct marketing to solicit donations, get votes and sell products and services.

One of the key elements that allows direct marketing to grow so fast is that once you know how much an action is worth (a returned phone call, a door opened, an address added) you can buy it from anyone, in any quantity. Because it pays for itself. The media works on commission, for you.

The internet, of course, is fueled by direct marketing thinking. What's a click worth? How much will you bid to have your ad on top? How many visits does this buy create? What's the funnel on our site, and how do we make it more efficient? What's the allowable for a download?

So Amazon grew largely on the basis of its affiliate program (anyone can join, you only get paid when someone clicks and buys–classic direct marketing thinking). And so Google grew without a salesforce, because the direct marketer doesn't wait for someone to show up and sell–instead, the direct marketer eagerly seeks out anything that generates a click for less.

This is the opposite of the other kind, which doesn't really have a name. Brand marketing, or mass marketing, or indirect marketing. The kind the guys at Mad Men do. The full-page ads in magazines, just about all the ads on TV, sponsoring a conference…

[For the purposes of this post, I'm talking about the duality of marketing in the traditional sense. My take for the last 15 years is that marketing is merely storytelling and promise making/keeping, and in fact, everything the organization does is at some level, marketing.]

If you're hoping to build something on the web, then, you're almost certainly required to think like a direct marketer.

That means that if you're searching for traffic or action or sales or word of mouth, you will be offered a hundred ways to measure what happens. And if you improve what you're measuring, the amount you have to spend on each action goes up, and if you earn enough from each action, direct marketing becomes a profit center, not a cost.

That means if you're required to sell ads or sponsorships, the easiest sales to make, and the most likely sales you'll make, will be to a direct marketer, and the offer is probably similar to Amazon's original affiliate offer: We'll pay you when it works. We'll pay for a click or we'll track how many people type in a discount code, or… 

Sometimes eager direct marketers will pay upfront for an ad, but they always measure, and they don't keep running ads that don't measure up. That's at the core of direct marketing.

There are costs to this shift, worth thinking about:

1. While it's tempting to build an organization with direct marketing techniques, just about all the brands that matter to our culture aren't built this way. The subtle and powerful stories behind Starbucks and Apple and Harper Lee don't lend themselves to direct response ads.

If you're trying to build that kind of brand, it's essential that you reject direct-marketing tactics as a shortcut. They will drive you to make decisions that keep you from building the sort of promise you seek to build, and they'll end up not paying for themselves either.

Whether you're a solo entrepreneur or a giant corporation, this is a trap the web sets for you. What you need to sacrifice to make the numbers work might be the very brand you seek to build.

2. Open-system direct marketing (where just about anyone can carry a link or run a banner) inevitably destroys the media that gets hooked on them. If your podcast becomes dependent on getting people to visit a sponsor's site and type in the discount code, you can bet that there will be ever-increasing internal pressure to mention the code louder and more often. Not by the advertiser. He doesn't care, he'll just move on. By your partners and your boss. And so we get popups and popunders and sneaky data tracking. Because people are measuring.

[There is an exception to this, which proves the rule: The Yellow Pages, where responding to the ads is the only function of the medium. Craigslist and eBay understand this.]

In many ways, direct marketing on the web is a self-limiting process, because the more that media companies embrace it, the worse it works. This is precisely the opposite of what happened for a generation to branded ads in Vogue and other magazines. Work too hard at getting clicks on the ads you sold, your audience leaves.

Lester Wunderman, Lillian Vernon and LL Bean built direct marketing businesses at their kitchen table, buying stamps and mailing lists and learning the hard way how to think like direct marketers. The web has turned all of us, if we want to be, into direct marketers. Go in with your eyes open, and do it well, and for the right reasons.