Direct response marketing is a type of sales technique designed to evoke an on-the-spot response and encourage a prospective customer to take action by opting in advertiser’s offer. Unlike other marketing types, the direct response requires little or no time waiting to see measurable results. Advertisers are able to access the performance from the moment the campaign is launched. Direct response marketing facilitates the delivery of a “call to action” via direct or online interaction.
Direct response marketing could be found nearly in all forms of advertising, including TV commercials, print marketing (magazines, newspapers, etc.), radio spots, websites and online ads. By creating an irresistible offer, advertisers push prospects through all marketing channels and generate leads. Lead generation is a process of converting strangers and passers-by into paying customers. The desired response massively depends on the goals of a specific ad. For instance, in exchange for the free offer the advertiser may ask a prospect to sign up, share contacts, register on a website, and so on.
In comparison to traditional advertising, which focuses on raising brand awareness and promoting a brand image, direct response campaigns expect the return on investment right away. With brand advertisement, it may take months or even years until consumers start recognizing the company’s logo and start making purchases, whereas direct marketing is all about instant deals.
Advertising that supports direct marketing is intended to sell products immediately, hence the ad and the buying decision are consecutive. Direct response ad must trigger an instant feedback; otherwise, it fails. A typical direct response ad necessarily includes the following elements:
Typically, advertisers include multiple options for response, such as toll-free number, email, website, etc. Marketers often use expiration dates and deadlines to create the sense of urgency and hurry their audience to act as quickly as possible, almost impulsively.
Generating immediate ROI (return on investment). Direct response is all about immediate reaction and immediate revenues from instant sales. With programmatic advertising, media buyers can determine the price for one impression at a time and bid only on those impressions that bring value.
Trackable performance. When a user responds (clicks, signs up, etc.), the advertiser knows exactly which ad and which media generated that impression. When buying through DSP (demand-side platform), advertisers can determine whether ads are effective, which target group is affected by the ad the most, what is the engagement rate, what amount of clicks is generated daily and so on; all data is simply displayed on the dashboard.
Measurable outcomes. Since advertisers know precisely, which ads are being responded to and how much revenue is coming from each one, they can easily evaluate the campaign performance. For this reason, direct response is one possible way to test the scale of consumer responses with a small campaign before launching a full-volume campaign. In digital advertising, advertisers measure campaign outcomes via DSP’s granular, real-time and compare the different metrics.
Targeting specific audiences. While branding campaign targets everybody in order to promote the brand awareness, the direct response is all about people who are most likely interested in the product. When buying digital ad space through RTB (Real-time bidding), advertisers deliver relevant ads in front of the right person in the right context and at the right time.
Precise segmentation. Marketers can develop effective segmentation strategies by buying a list of potential consumers, for example, new car buyers, credit card users, clothing shoppers and so on. With programmatic advertising, advertisers can use ad networks that specialize in types of content they cover, like entertainment, beauty, traveling, foods, etc. These websites would be then grouped into vertical channels and sold out to advertisers who wish to reach out people interested in these topics. Alternatively, some ad networks sell audience segments built on demographic, behavioral data or user interests.