Honest Marketing

How Direct Response Ruined Marketing

• Honest Podcasts • Episode 33

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Direct response marketing has completely changed the game when it comes to online buying and selling. 

But at what cost? 

Has the focus on tracking every click and optimizing conversion rates taken away from the true essence of marketing?

In this episode, we dive into how direct response marketing has impacted the industry and whether it has actually ruined marketing as we know it. We discuss the unintended consequences of focusing solely on optimization, and how it might lead to missing the bigger picture.

So, if you're curious about the trade-offs of direct response marketing and how it affects the overall customer experience, you won't want to miss this one. Tune in now and let's get to the bottom of it!

Specifically, this episode highlights the following themes:

  • The obsession with conversion rates and optimizing the sales process
  • The challenge of tracking the full customer journey
  • Shifting marketing decisions from people-based to optimization-based

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And if you have a guest in mind who you think would be a great fit for this show, drop me a line at hello@honestpodcasts.com. 

Direct Response advertising has completely shifted the way that companies and people buy and sell products online. With things like cookies and attribution and custom avatars and all that kind of stuff, companies can now track the entire prospect journey from awareness to sale, from start to finish, and it's completely ruined marketing, in my opinion. So in this episode, I'll explain why you welcome back to the Honest Marketing podcast, where you learn proven strategies to grow your business without selling your soul. I'm your host, Travis Albritton, and until a few years ago, it was just simply not possible to track every single piece and part of the customer's purchasing journey. If you're a business and you want to know, how did someone go from learning about me to deciding to give me money? It wasn't possible because there were so many pieces in the middle that you couldn't keep track of. Along comes direct response marketing and advertising where you can track not only how much did you spend to get someone to click on something, but you could track their activity across websites and across pages and between softwares and apps to actually map out the whole journey and also see all the places on the journey where you could, quote, unquote, optimize the sales experience to generate more sales from the same amount of traffic. Now, that has left a lot of people with the impression that that's simply how marketing works. That's how sales works. What you do is you create a funnel, you craft it perfectly, and then you tweak and refine every single piece of it until it's absolutely perfect and it cannot get more optimized. And you have found the perfect silver bullet to get your company to grow on autopilot. But it neglects a couple of things that I think are really important. And I think it's one of the reasons why for a lot of new entrepreneurs and new businesses that have gotten into business, specifically online business, in the last decade or so, has left a skewed understanding of how marketing actually works and is actually hurting your business. So if this is you and you're wholly reliant on Facebook Ads and Google Ads to drive business and to drive new customers, then this is going to be really important episode for you. Because I think it's going to give you some things to think about and consider that maybe other people, other marketing gurus aren't really talking about right now. And there are four specific reasons that I think Direct Response has ruined marketing. And I don't say that lightly. I really do believe that Direct Response and this idea that you can track every single piece of the sales process is leading to some unintended consequences. One of the first things that I think Direct Response advertising or marketing does is it shifts how you make decisions. So when that becomes the framework that you look through to see is someone engaging with your product or your service or considering buying. All of your decisions are primarily based around optimizing conversion rates, right? So if you are creating ad copy, ad collateral creative, whether it's images or videos or sales copy, you're testing links and buttons and things like that to see which ones get the best results in the platforms that you're. Using to promote, then you are actually tracking all these things and saying, okay, if we change this button from green to orange, does that change the amount of people that click to the next page? Right? And at one level that's really cool that you now have this ability to do A, B and A, B and C testing in real time with real data. But what often happens, and this is something I personally experience, is that comes at odds and really is a detriment to the real life experience of interacting with your brand and your product. So a couple of years ago, I was launching a product in the info space. So it was a new course membership program and I was launching it. I was doing like an actual closed cart launch where there's a period where you could buy and then after a certain point you couldn't anymore. And I had spent a lot of time tweaking and optimizing my sales process to try and get the best return on ad spend that I possibly could. I was bootstrapping the launch I needed to make a certain amount of money. So there was a lot of pressure that I was putting on myself to turn a profit and to turn as large of a profit as I could. What ended up happening though is I ended up getting a bunch of refund requests immediately after the sale or after the launch. And the reason was not because the product was bad, it wasn't because I didn't deliver on the promises that I made, but it was how the sales process made my prospects feel. They felt like they were getting squeezed through a SIF and that at every single step of the process they were being asked to make sales decisions they hadn't fully considered or weren't really prepared to make and it just left a bad taste in their mouth. While on paper I could look at that and say that was a really highly optimized sales process and really well put together funnel that was profitable. On the flip side, the unintended result was that people felt like I was trying to squeeze every single ounce of profit that I could out of my relationship with them instead of really showing up with a service mindset. To the point where they just flat asked for a refund and said, based on how this sales process made me feel, I now associate those feelings. They didn't tell me this directly, but it was pretty clear how that sales process made them feel was something they could not disentangle from their thoughts about me and my brand. And what my company did. And so they said, I don't want to do business with you if this is how you're going to make me feel. And that is the story, time and time again, of shifting into a more direct response world because everything becomes very transactional, it becomes very numbers driven. And so they're not people, they're leads. And those leads need to turn into customers. And a customer, again, is just calculated based on LTV lifetime value, how much money you're going to make from them. But it's not really about the person. It's about this imaginary persona, digital persona, on the other side of a checkout page, and you're trying to do battle with them to get their credit card information. And so, again, when you lean into this direct response marketing, which is where you're tracking initial clicks in attention all the way through to a sale, it ends up skewing what you optimize. And so you optimize for conversion rates rather than a positive human experience. The thing that I've discovered myself in my own businesses is that when I spend more time focused on talking to my clients and my customers and my prospects and figuring out what they're dealing with and what problems they're going through and just really speaking to them on a human level. That has a far greater shift in the profitability of my marketing campaigns than changing the color of a button on a website or changing a headline to see if it adding some more sensational words, gets more people to click on something. So at a fundamental level, I think time is better spent in the latter or on the former, talking to people versus how do I tweak this algorithmic sales page with the right colors and copy and case studies to get more people to give me more money. So that's number one, number one reason that I feel like direct response has really ruined marketing and hurt marketing for a lot of business owners. Number two, you can't actually track the full customer journey, even though that's the promise of direct response, right? So the promise, again, is that you can track every single piece of this journey, and by doing so, you can optimize it, and you can actually attract specific dollar amounts to how much it costs to get a customer or to get a lead or to qualify a lead x, Y, and Z. And that makes sense on one level, because if you're able to track how much it cost for you to get a link, click and you can actually see what percentage of people saw the ad that clicked the link, and then you have a certain percentage that landed on the landing page, a certain percentage that opted into the form, a certain percentage that bought the product, and you can actually get that number down. And that's how a sales funnel works. And so I did a whole podcast episode with Quajo earlier on the podcast. If you want to learn more about sales funnels, you can go check out that episode. But what's missing there is all the other times that that person interacted with your company and didn't do anything. They saw your website, they saw an ad. They checked out your social media page and saw some of the content that you were creating, but they didn't actually take action on any of those things. You just saw, hey, over here. They clicked a link and then boom, they became a customer. And so when you fully invest in direct response as like your only filter or your main filter that you use for marketing your company to get more sales, you lose sight of all the other touch points that you had with them before they decided to do business with you. And so you can't actually track the whole customer journey, because to do so would mean that you have to track all the things that are untrackable, all the interactions, all the touch points, all the impressions that you can't actually track that you can't actually associate a number with. When they do studies on this, it used to be somebody needs to hear about your product seven times before they make a decision. Last study that I saw was like 25 times, just because of the sheer volume of ads that we see every single day between three and five to 10,000, depending on how much time you spend on TikTok or social media. But it's all those uncaptured impressions and touch points that ultimately get someone to the place where they're ready to do business with you. And so we're going to dig into this a little bit. So if your business is not based on just sporadic, spontaneous consumption, like if you're selling graphic T shirt designs and they see an ad on Facebook, they've never heard of you. They don't know who you are, but within five minutes, they've bought something. If that's not the market that you're in, there's going to be other touch points. There are going to be other things that this customer, this prospect, this person does before they decide to do business with you that you won't be able to capture with a direct response generated funnel, okay? And so you have to have that kind of awareness to know, like, hey, there's things that we can't quantify, there's things we can't track. There are KPIs that we cannot put a dollar or a percentage on or a number on that are vitally important to the overall success of your business. Okay? But again, if you're looking at things strictly through that direct response mindset and framework, you're going to miss that. You're going to miss that really core piece of marketing and why it's so important. And big companies know this. Big companies understand the yin and the yang and the balance of these things, right? So when Coca Cola does a big global brand initiative or they're buying billboards or TV ads they're not tracking, okay? This TV ad was shown to 600,000 individual households. Of those individual households, how many of them bought a case of Coke in the next 30 days? They're not looking at it like that. They say, we did all of these things to increase the awareness and the affinity that people have of us and what we do and what we offer on a holistic level. How did all these initiatives affect the sales of our product? Did it go up by 1%? Did it go down by one and a half percent? What markets responded best to these wide ranging initiatives? And so bigger companies understand how this works, that you can't actually track every single sale down to a link click. But small businesses seem to forget that because of the promise of platforms like Facebook and Google that tell you that it is possible. So that's the second thing. The second thing that I've done or seen direct Response have a negative effect on marketing is that you can't actually track the buyer's journey, even though that's the promise that's made. The third thing and the third reason why I think Direct Response has ruined marketing is that it makes your marketing vulnerable to platform changes. Okay? And so this is a very pragmatic one. It's less philosophical than the others. It's very pragmatic that when you go all in on direct Response marketing, you typically optimize on a given platform. So, like, let's say that you start out with Facebook ads and Google AdWords and LinkedIn ads and Instagram ads, and you run all those for a month, and you see that Facebook ads win. They give you the best cost per lead, they give you the best optimization, the best conversion rates. And so you say, why would I spend more money on Google or LinkedIn on Instagram when I spend less money and get the same results on Facebook? So you end up optimizing for one platform very quickly because that's what the numbers tell you to do. And so unless you intentionally spend more per customer acquisition on another platform in addition to Facebook, because you want to diversify what you're doing, that makes you incredibly susceptible to algorithm changes, which a lot of small businesses figured out once Apple decided they were no longer going to let Facebook track their users activity across websites without their permission. So that was the big thing that happened with Apple and Facebook and Facebook ads have never been the same, quite frankly, where it used to be. You could say, I want to find these kinds of people. And Facebook was so good at finding exactly the kind of person that you wanted to sell to, because they not only had their on platform activity, the things they did on Facebook, but access to virtually the entire Internet and everything they'd ever done. And created so many touch points that they could specifically identify people that not only were interested in your product, but were also in the place in their buyer's journey where they were ready to make a purchase of a product like yours. And so it was really like just some insane witchcraft stuff that was going on. And so a lot of businesses built their marketing on the back of Facebook ads. But then once that shifted and the algorithm shifted, and the way you were able to advertise on Facebook shifted, it completely crumbled that ads model for so many businesses that were over indexed in that one platform, because the numbers told them, if we want to make more money and more profit, spend more on Facebook ads and stop doing these other things. And so because that shifted. And then Google, due to regulations from the European Union, is phasing out their cookies. Technology and the ability to attribute your activity across platforms and across websites, you can't actually track your customers the way that you used to five years ago, ten years ago. And so attribution falls off, your data becomes more unreliable. So the last time I ran a Facebook ads campaign, it said I got like 500 email opt ins. Then I go to the email service and it says I got 327. It's like, well which one's right? What's the email service, but by how much and for what reasons? And so all of these things are reasons why direct response is not the silver bullet that is being sold to business owners, right? That's just because it may work for a specific window of time, it doesn't mean that now you figure something out. It's the golden goose. It's going to drive profit forever. Which is often the lie that's kind of believed is like we cracked the nugget on this perfect funnel with this perfect ad campaign. Rinse and repeat until the end of time. And so whenever you shift wholeheartedly in one direction and say, we're just going to have Facebook ads drive the growth of the business makes you highly susceptible and vulnerable to changes on those algorithms that are outside of your control, which is never a place you want to be as a business owner, having to rely on somebody else to generate your results. The number four thing, the fourth reason why I feel like Direct Response advertising and sales has ruined marketing is that it doesn't actually work for highly considered purchases. Now let me explain what I mean by this because a lot of people will say I've sold all kinds of high ticket stuff through direct response marketing. And that may be true. But let's consider this. If we consider low consideration versus high consideration. And what I mean by those is how much does somebody have to think before they decide to purchase something? So if you're thirsty and dehydrated and you come across a vending machine, it's a very low consideration purchase. You purchase the drink, it pops out, you drink it, it's very spontaneous, and there's not a lot of decision making that needs to happen. I'm thirsty. There's a drink. I'm going to go buy it. On the opposite side of the spectrum would be signing up for an enterprise software solution for your business that has a high switching cost. If it doesn't work. They're like installing software, installing hardware. If it doesn't work, that's a big mistake. That's a very high consideration, a very high threshold where you're spending a lot of time thinking about, is this the right purchase for me at this point in time? Is this going to meet my needs? Is this really going to be what I need? And so you think about it a lot before you ultimately sign on the dotted line and say yes. And so every business is on that spectrum. Somewhere between buying soda when you're really thirsty and the multimillion dollar enterprise software solution that you can't uninstall, right? There's a spectrum there. There's a gradient, and all of us fit somewhere on that gradient. But unless you are on the very low end of that consideration spectrum, where you're selling screen printed T shirts of memes and funny sayings or refrigerator magnets or things like that, then your company's products or services, they require at least some consideration. And what does that look like? That means that your prospect is going to be researching your competitors. Who else is making this widget? Who else is offering this service? How do I know I'm getting the best price or the right features? They're going to start consuming your blog. They're going to read your about page and your case studies, and they're going to look at your portfolio, and they're going to see how do you stack up versus the other people that do what you do. And then once they've also done that for your competitors and the other people in your space, they may do business with you. And so that's the consideration, the research phase of buying. If it's anything that's not like a five dollar widget or like a T shirt or something, right? Something significant enough that they want to do research to make sure they don't have buyers remorse, they actually buy the thing they want and they need. And Google has made it so incredibly easy to do this research and to do this side by side comparison of your business versus another business versus another business that it's now hardwired in the way that people purchase things. If you even think about shopping on Amazon, what do you do? You type in the thing that you want. You have a bunch of companies and businesses that have listings there, and then you're reading the reviews, you're reading the features. You're trying to decide which one is the best. It's not necessarily the one that shows up at the very top. It's whichever one, after doing your research, you've decided is the most likely to meet your need. This is just how people shop now this is how people make buying decisions and Direct Response cannot track that. It cannot track that buyer's journey at scale where you capture all the data, all the data completely and perfectly so you can make informed decisions about what's working and what's not working. You can't put a KPI around. Well, I did market research and over the course of four months ultimately decided to do business with you. There are virtually no processes or systems that allow for that kind of uncertainty and lack of clarity because that would defeat the purpose of having data that's reliable. Right? You need to control all the variables so that you can tweak one thing and know that everything else is going to be consistent and the same. But that's just not how the world works. That's not how people make buying decisions if you are at any point in the consideration process where it takes time for someone to make a decision, right? So like for my business, I produce branded podcasts. So guess what somebody does when they're thinking about having a podcast produced for their business? They type in podcast production agencies or something like that and they're going to see a list of all these different options of people that say they do the same thing. And you're going through the websites and you're looking at the features and you're looking at what do they offer, at what price point, what do these people offer? And can actually look at some examples of work you've done because maybe you're cheaper, but that's not because you're better or vice versa. It's just because you're in a different market or you're internationally spread out with your team versus an all US domestic team. There's all these variables, but all that research happens before somebody ultimately decides, okay, this is the company that I want to produce the podcast for my brand, for my business. And so if all that I do is run Facebook ads telling people I can make a podcast for them, it'll fall flat ultimately. And I will lose a lot of business because I miss out on that research phase and creating all the marketing assets and collateral that I need in order to establish myself online as someone who's trustworthy, who knows what they're doing. So that when someone is poking around and researching things, they can quickly make a decision about if I'm going to be able to meet their needs or not. And all that happens outside of Direct Response, it just does. Even if somebody clicks on a link, downloads a lead magnet or something like that that I have, it may be months before I ever hear from them again because they're doing research and they're considering their purchase through that time. But if all of my marketing is optimized around, well, I only had 3% of people that join my email list, book a strategy call in the first week. It's like I've completely neglected the other 97% of people that showed up on my email list that may, at some point in the future, decide to do business with me. And if all of my marketing and all my sales is data driven based on Direct Response principles, then I'm missing so much of the potential business that I could have, right? So when it comes down to Direct Response and how I feel like it's ruined marketing, it's not that it's not a great tool or a really effective tool or a really great piece in your arsenal. You want to know your numbers. You want to know how much does it cost to get somebody to become a customer? How much is a customer worth to you in the lifetime of them doing business with you? But you have to look at that. Holistically. So for me, when I think about Direct Response, I certainly track, how much did I spend to get a link, click, what's the conversion rate on an opt in page for a free lead magnet, for instance. But then when I'm looking at the efficacy of my marketing strategy holistically it's what is the time investment for me to make these podcasts, to make YouTube videos, to put blogs on my website, and how much am I spending on advertising? And then I look holistically at the clients that are coming in and how do they discover me and what was their prospect journey and how did they decide to buy? And it almost never happens that they see an ad make a decision to buy something from me in a short window of time without it being a highly considered thing. It just doesn't happen. And so I really lean into this. It's like when I look back at my own customer acquisition process and how I get clients, so much of it is relational, so much of it is just serendipitous. It just happens. Like, when you put enough out into the world, telling people about your business and what you do, it will eventually generate sales. Now, I totally recognize as a small business owner, that you can't always just hope for things to work out. It's like, we're just not going to track numbers, but we're going to hope that we get the right enough business, the right amount of business, so we can stay profitable and stay in business. I totally get the Pragmatic side of you got to know what's a good ROI and what's not. But it has to be incorporated into a well rounded understanding of how marketing works and how people buy things. Okay? It is only a tool. It is only a tool. It is only a set of KPIs. It does not tell the whole story. And I think that's how it's ruined marketing is that people have started to believe that Direct Response is marketing and that anything outside of that is a waste of time, money, and resources when it's not. So in summary, four reasons why I feel like direct response has ruined marketing or the way people think about marketing. Number one, marketing decisions become optimization based instead of people based. You can't actually track the full customer's journey at scale, which is the whole promise of direct response. It makes your marketing vulnerable to platform changes, and it does not factor in long sales cycle, highly considered purchases and long sales cycle meaning longer than 24 hours. Okay, so not even like months or years. Talking about weeks or days, it doesn't really take that into consideration at scale because you can't capture all the data. It's not there to be captured. So if you're somebody who has lived and died by Facebook ads or LinkedIn ads or Google AdWords, consider diversifying. Consider doing some brand lift initiatives, which may feel like a four letter word. Like, why would we spend money on something that we can't directly track an ROI? Because that's how the world works. That's how business has been done for thousands of years up until the last 15 years or so. And it's worked out for the businesses that have the best products and the best services and deliver for their clients. So if you can control those things and make sure that you're doing right by your customer, right by your people, and creating something that's actually needed in the world, everything else will fall into place. I hope you enjoyed that episode. Found anything enlightening? Maybe a little controversial, but hey, we're all about honesty here. Have a great week, and as always, be honest.