What is Direct Response Marketing?
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.
What are the key components of direct response marketing?
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 instant feedback; otherwise, it fails. A typical direct response ad necessarily includes the following elements:
- An offer
An “offer” is a combination of factors such as product itself, the cost per unit, trial period, terms, optional features, guarantee, incentives, future obligations, time o quantity limit, shipping and handling, etc. Very often, the aim of the offer is no sell anything, rather get the prospect’s interest and lead him to the next action, such as requesting a free demo version of the product. Usually, the offer is fixed on a prospect and appeals to their emotions, desires, frustrations and fears.
A direct response ad must have enough information for customer consideration and immediate acceptance of the offer. As a rule, the less famous the product is, the more information needed. On average, the advertiser has 4 seconds to grab the attention of the recipient, thus the message must be personalised, relevant and persuasive. Advertisers provide reasons to accept the offer and highlight the value of the offering, including information about why this product is better than others available.
- Call to action and means of response
Every direct response ad includes a clear call to action, compelling a visitor to do something specific. A few common examples are:
- Use this coupon at the counter;
- Follow the link below;
- Contact us immediately by calling this number;
- Subscribe to our monthly newsletter;
- Share an image/article/ad with your friends;
- Download free trial/beta version of the product;
- Sign up for a mailing list;
- Buy now and receive a discount, etc.
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.
What are the benefits of direct response advertising?
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 specialise in types of content they cover, like entertainment, beauty, travelling, 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.
Irina Kovalenko, CMO of SmartyAds