There’s a big difference between what is “hot” in marketing and what actually “works.”
For example, “everyone” knows that mobile marketing is super-hot right now, but how many companies are actually driving ROI at scale through this channel, at least relative to the hype surrounding the channel?
Interestingly, while pundits are noisily proclaiming mobile, or native, or the Internet of Things as the next big thing, many internet companies are quietly turning to an old-standard for results – offline marketing.
For years, the very online marketers that have derisively pronounced offline marketing dead (myself included) are now finding profit and volume by fusing online and offline marketing strategies.
TV: Not Dead Yet!
Let’s start with the 800-pound gorilla of offline marketing: TV. In a column several years ago about Super Bowl advertisers, I subtly criticized TV advertisers by noting: “The Ad Agency-Corporate Marketing Industrial Complex is a self-congratulatory machine that somehow convinces companies to shell out big dough for minimal results, and even less quantification.”
While I still agree that most “brand” TV advertising fits that description, online companies taking a direct-response approach to TV have found ways to drive ROI.
Dollar Shave Club, for example, has shifted spend from YouTube to TV, as reported by Ad Age, because conversions on TV are cheaper. Drop-shipping giant Wayfair.com spends $20 million+ a year on TV, according to a report in Internet Retailer, and has “seen an unprecedented spike in web traffic” during their campaigns.
And if you check out iSpot.tv – a site that indexes TV commercials – you can find hundreds of online companies that have launched TV commercials (and most of these spots are clearly direct-response focused).
Offline Stores For E-Commerce?
One of the allures of e-commerce is that you don’t need a physical store replete with high rents, employees, and lots of inventory, right? It turns out that these old-school physical locations – even with their high costs – still resonate with consumers.
Warby Parker – iconic online glasses retailer – has found that opening offline stores actually results in online purchases, according to a report in Pando Daily.
We’re also bringing in new customers, and the majority of new customers coming through retail channel are making their second purchase online. Neil Blumenthal of Warby Parker in Pando Daily
And Warby Parker is not alone. Bonobos, a men’s e-commerce company, has opened ten locations; Julep, a nail polish etailer, has four Seattle salons; JustFab.com and Birchbox also have offline locations.
Direct Mail Still Works
Though direct mail (and mail in general) has declined precipitously since the dawn of the internet, it is being used effectively by online marketers.
Google, for example, has used direct mail to acquire new advertisers; Netflix has run several campaigns to acquire new subscribers; and, according to Andy Ostroy of Belardi/Ostroy, numerous e-commerce sites have found that print catalogs are ROI-positive, including Amazon, eBay, Shutterfly, Zappos, Art.com, JustFab, Snapfish, One King’s Lane, Modcloth, and Minted.
Put simply, the math works. Especially if this channel is fine-tuned and acutely integrated into the multi-channel equation. Remember the 1-2 punch strategy: find ’em through direct-mail, fulfill orders online. Andy Ostroy of Belardi/Ostroy
Tracking The Online/Offline Convergence
Trackability is one of the most glorious things about internet marketing. By contrast, offline tracking has historically been murky at best.
Indeed, in the early 2000s, former Google CEO Eric Schmidt derided TV advertising as “the last bastion of unaccountable spending in corporate America.” Today, Schmidt would likely admit that the landscape for offline tracking has improved.
Numerous technology companies offer solutions that purport to measure the impact of offline behavior — from attribution companies like Convertro (acquired by AOL) and Adometry (acquired by Google) — that can measure the impact of TV and radio on online (and vice versa) to in-store activity tracking that connects store purchases to online behavior.
The rise in investment in offline advertising, then, from internet companies isn’t because these channels have become more effective; rather, they’ve just become more trackable.
Don’t Buy A Super Bowl Ad Just Yet
To be clear, there is still a lot of offline advertising that won’t work for online companies. The top advertisers on TV, for example, are still the giant brand advertisers that overpay for “key demographics” with little regard for actual ROI.
Online-first companies will never be able to compete with these advertisers (nor would they want to) until the very “unaccountability” of these brands’ spending drives their business models into the ground.
The offline investments that are working for online businesses are still very scrappy: late-night, low-cost, direct response TV and radio spots; highly-targeted direct mail campaigns; and carefully orchestrated forays into offline retail are the preferred approaches.
Put another way, online brands are finding “arbitrage” opportunities to drive scale offline at prices that are likely 50-75% off what a traditional brand would pay for similar results. In a perverse twist of fate, as online marketing has matured (and prices have become efficient), smart online advertisers have jumped into offline marketing to take advantage of inefficiencies.
There’s no doubt that spend continues to shift from offline to digital, and new generations bred on a heavy diet of digital media will only accelerate this trend. So, a focus on online marketing is still the right bet for savvy marketers.
The data suggests, however, that the right offline strategy can be an ROI-positive approach to driving incremental scale.
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