Direct-response Ads and branding campaigns: How do they measure up?

"An orange…is an an orange. Unless, of course, that orange happens to be a Sunkist, a name eighty percent of consumers know and trust."
-Russell L. Hanlin, CEO, Sunkist Growers

In today's interactive and integrated communications' environment the boundaries between Branding Campaigns and Direct Response ads are blurring but for the purpose of further discussion and debate let's clearly define and differentiate the two.

One of the older and simpler definitions was the one coined by David Ogilvy, when he said: A brand is the consumer's idea of a product. Simply implying that a brand is different than a product and that the difference is something with which it is invested by the consumer.

Brand Managers for long have stressed the importance of Brand Power and Aaker (1996) suggests that strong brands are built as a result of long-term brand equity management across various media. Branding is about raising awareness; communicating value/benefits and establishing a trusting, ongoing relationship with potential buyers and a Brand campaign would strive to achieve just this.
Direct response advertising on the other hand refers to any media-placed advertisement that is designed to produce measurable response -- in the form of inquiries or sales. Direct response advertising can appear in: Print media - newspapers, magazines and catalogs Broadcast media -- television and radio Electronic media -- Internet e-mail and the World Wide Web


Objective: Branding Campaigns in their classic sense placed more emphasis on branding, image, awareness and creative and never asked for a response. While Direct response advertising was a straightforward sales pitch with an offer and a response vehicle (either a coupon or toll-free number). It was about long-term consumer relationship versus short-term sales.

Target Audience: Branding Campaigns try to reach large audience for their products through mass media while direct marketing allows a company to be more selective and target its marketing communications to specific customer segments. Messages can also be customized to fit the needs of the segment and, with new technologies, can even be personalized for individual customers.

Reception: For every Branding Campaign that comes through mass media, the high level of "clutter" is a major problem. The numerous commercials we see on television or hear on the radio, as well as the many ads that appear in most magazines and newspapers, make it very difficult for advertisers to get their messages noticed and attended to by consumers. But the advantage of brand campaigns is their ability to strike a responsive chord with consumers once a basal level of brand awareness and goodwill has been built. Direct response ads on the other hand bombard consumers and business with unsolicited mail and phone calls. This makes them less receptive to direct-marketing efforts and also has created image problems for products and services marketed this way.

Media & Costs: Image advertisers favor prime-time TV and glossy magazine spreads. Direct response media includes junk mail, late-night TV (Infomercials), and those annoying phone calls that interrupt dinner. The costs of producing and placing traditional advertising can be very high. Media costs have also been increasing rapidly, particularly for television. On the other hand even with 2% response rates to direct mails, marketers are increasingly putting more money in direct response advertising. According to Godin (1999), marketers are now allocating about 52% of their annual ad budgets to direct-response ads because they are more cost-effective.

Measurability: The key difference between the two is the measurability of results. The lack of direct feedback for most brand advertising is a drawback, as this makes it difficult for the advertiser to determine how well the message was received and whether it was effective or not. On the other hand whether it's a split-run test of different ads with coupons (the classic Claude Hopkins way to determine which ad works better) or a toll-free number for response, direct-response ads make sure that the advertising results can be measured. In these times when each advertising dollar has to be spent judiciously, simple brand campaigns seem nothing but an indulgence.
Relationship is the Key

A common perspective to both branding and direct-response ads comes through 'relationship marketing.' Branding campaigns have always striven to form a long-term relationship with consumer and first make them 'friends' and then 'lovers' of the brand. Direct-response ads on the other hand focus too hard on the initial connection with the consumer and don't pay too much attention to fulfilling the promise. It happens ever so often, something ordered from a catalogue or direct mail does not live up to the promise and one vows never to buy again from that company. The short-term approach kills the long-term relationship.
Thus the key lies in relationship marketing, where giving value extends beyond the product or the service and the goal is to add value to the entire consumer experience.
Which incidentally is also the goal of branding campaigns where the positive brand experiences add to the experiential equity with a brand. As we see, both brand campaigns and direct response ads cannot operate in a vacuum today, and to break the clutter and be effective, they have to find a common ground.

Permission Marketing: The New Paradigm

The role of branding in today's interactive and cluttered environment has changed. The primary purpose of brand advertising is to help a product or service gain consideration with prospective customers. Brands are like information shortcuts --they help consumers quickly sort through purchase options without having to research every point in detail. Companies like Amazon are investing in off-line media advertising and public relations. They are trying to influence market perception of their brand. When they get press coverage in a Wall Street Journal article that compares them with established,
trusted brands like Barnes & Noble, they benefit tremendously and become a part of consumer's consideration set.
As the traditional media (and even online media like banner ads) helps raise awareness and credibility of your brand, the direct response is used, not as an unwelcome guest but under the aegis of Permission Marketing. So when we want to sell something to the consumer, we simply take his or her permission in advance. To cite an example, Text links on search engines are commonly utilized lead generators and find their place high up in the direct response armory.

Essentially, advertisers provide (what appears to be) a credible option to a user who is actively searching for something similar to a site's offering at an opportune time, rather than distracting or interrupting users when they may be in a completely different state of mind.

Branding and Direct response can no more work in isolation and the best business models are integrating the two successfully.