The "Invention" of Analytic Marketing?
I was almost sputtering when I ran across a New York Times media hagiography of Darren Herman, president of Varick Media Management. The article goes on about just how smart companies like Varick are for introducing mathematical analysis of a marketing campaign's results. The only hitch is that the pairing of numbers and marketing vehicles is well over a century old.
What struck me most was the arrogance I heard in Herman's quoted assumption that no one had ever managed to put mathematically analyze marketing before:
"It's putting numbers to an industry that never had numbers before," says Mr. Herman, 27, who started and sold three media and technology companies before founding Varick last summer. "It's nice to be able to tell your brand manager or the chief marketing officer which audience is interacting with the unit, what time of day, what day of the week, and what the response is on certain types of offers. Before, nobody could really tell you that."Direct marketers have long been advocates of analysis out of necessity. They have had to balance the cost of production and distribution with effectiveness, knowing that the money they invested would be more than returned with an ROI that made sense. And direct response marketing actually started shortly after Gutenberg developed movable type. The term direct mail apparently was in use before 1900:
In 1893, well before Buckley's entry onto the scene, Printers' Ink magazine published an article by T.B. Russell, titled "With English Advertisers." And there it was:A hard school, indeed, because direct response has been marketing's redheaded stepchild for decades. A company could not simply run ads and claim to be "establishing the brand." No, a direct marketing campaign had to pay for its own cost and provide a profit afterward. Look at any direct marketing text from the last 30 years -- Edward Nash's first edition of The Direct Marketing Handbook came out in 1984, if I'm not mistaken, and I have no idea how many older texts treated the subject."Speaking of direct mail business, I said it was a hard school to be brought up in, and it is," Russell wrote.
Testing offers, text, ad layouts, inserts, number of colors printed, sales letter lengths, and, of course, mailing lists was not exotic. Rather, this was de rigueur. A company could not undertake a credible campaign and refine it over time without doing so. Only slightly more exotic was using these numbers in the context of a customer's complete relationship with a company, determining average lifetime values of customers brought in through various campaigns and understanding how much you could spend to bring a new buyer in.
Ever wonder why Reader's Digest had developed into the powerhouse title it is, or at least once was? Direct marketing techniques. Why Sears was once the Wal-Mart of its heyday? Direct marketing techniques. Pick an industry, and you can find a giant that grew on regular doses of direct marketing and its accompanying analytics.
These techniques have been well-known, and using computers to make the analysis easier is nothing new. Over 15 years ago, I was the head of product marketing at a direct marketer of products to programmers and engineers. We would regularly dump information out of Foxpro, run it through spreadsheet models that my department developed (with the help of a mathematics PhD candidate who worked for me at the time), and look for patterns and insights to be matched with catalog and direct mailer responses. In fact, I remember when one of the CEOs that paraded through the company insisted on pushing Windows 95 development tools over older DOS ones because that was "the future." We looked at the mix and I predicted that the shift was a mistake at the time. Sales between one catalog and the next dropped by three percent, and the CEO never forgave me for being right. Of course I was -- because the numbers were clear.
Certainly the web is making response measurement easier. But sometimes technology can blind you to reality. Seldom do single marketing campaigns act in isolation, particularly when the same Internet that brings them to customers also let the customers research products, outlets, and prices. Does a person start at the web and go to an online outlet? How about a store? Was the offer alone what drove the customer, or were there repeated impressions over various media that created an emotional need? The analysis required for multi-modal marketing is horrifically complex and beyond what a lay person can easily accomplish with a spreadsheet. That doesn't mean you give up on examining given campaigns and improving their effectiveness. But you also don't think that a single number is necessarily the be all and end all.
Perhaps marketing's best and brightest -- and the breathless media reporters looking to surf on a wave of the hot new thing -- might remember that there is little new under the sun, and do a little research. Executives are often fond of saying that they hate hearing the idea-killing phrase, "We tried that before." But I suspect they hate the cost of reinventing the wheel even more.
Meter image via stock.xchng user porah, standard site license.