The advent of online marketing has changed a lot of things in a few short years. Not the least of which is the near complete annihilation of the old saw that laments, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”.
The line is attributed to John Wanamaker, who is credited with opening the first department store in Philly, eventually becoming part of May’s and then Macy’s.
What he’s referring to, of course, is the old school methodology of throwing money at expensive ads and hoping people will flood your retail establishment. Provided you make more money than you spend, it might not matter that there’s no way to track which ad in which paper brought them in.
Oh, how things have changed, Mr. Wanamaker.
Online Marketing + Analytics = Data-Driven Marketing
First off, we need to draw a distinction between brand marketing and direct marketing.
Brand Marketing is the kind of thing Mr. Wanamaker used to do to get people to remember his store when it came time to go shopping. It’s also what Coke and Pepsi are doing when they spend a trillion dollars a year to encourage you to remember them when you go into the supermarket.
(You ever sit down at a restaurant and ask for a Coke and they say, “We have Pepsi”? To which you say, “That’ll be fine”. There’s a trillion dollars annual – right down the drain.)
The goal of brand marketing is either to make people aware of your product or to keep your already-known-to-them product in the front of their mind. With luck, they will remember you when they go to the retailer to choose what to buy. And if that happens 50% of the time, there’s “half the money you spent on advertising wasted, you just don’t know which half”.
Direct Marketing, on the other hand, typically doesn’t rely on retailers getting in the middle of the transaction. It’s direct insofar as I make you aware of my product, take you to a checkout process and you either buy or you don’t. With the proper use of Analytics, I know how you got there, how long you hung around and whether or not you put anything in your cart before you left.
I can use each and every one of those data points, and thousands more, to refine the process so that I can reduce the number of people like you abandoning their orders.
In actual practice, the lines are sometimes blurred in online marketing as to whether it constitutes brand or direct. I mean, I need you to know about my product before you’re going to buy it, right? So, in a sense, that’s brand. But I can also control the marketing messages I deliver to you after you know about my product in the future in an effort to compel you to come buy it now that you know of it. That’s direct.
But what’s important to note here is that it’s no longer necessary to waste half of your advertising dollars.
There’s Still SOME Waste
Again, I would like to clarify that there will be waste in the early phases of a direct, online marketing campaign. In order to know what works, you have to go through some of what doesn’t. And then you test, refine, test, refine and test some more.
There is also quite a learning curve if you’re doing it yourself. And it can get expensive in a hurry. That’s why so many businesses dabble in PPC and then quit.
Another option is working with a traditional, full-service agency but that, too, can get expensive fast. So much so, in fact, that you might say, “Half the money I spend on advertising goes to my marketing company, I just don’t know which half”.
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