Book Excerpt: Optimarketing: Marketing Optimization to Electrify Your Business
[Editor’s note] I don’t know if they’re still learning it, but as a newby to direct marketing in the early 90s one of the first things I was taught was the 40/40/20 rule.
The 40/40/20 rule states 40 percent of an offer’s success is determined by the offer, 40 percent is determined by the list, and 20 percent is determined by the creative.
Robert Rosenthal, president of marketing agency Contenteurs, was schooled in the same basics. But he’s been bucking the 40/40/20 rule for years.
He just published a book titled “Optimarketing: Marketing Optimization to Electrify Your Business." In it he delivers lessons from thousands of tests and hundreds of campaigns created for his clients over the years.
Here is an excerpt:
LEARN THE RULES –
THEN GROW BEYOND THEM
From the moment we’re spanked on the ass as newborns, we’re exposed to rules. Marketers deal with them constantly. Today they’re often called “best practices.” Many have glaring shortcomings. Some no longer apply.
Let’s discuss David Ogilvy – an advertising legend. I learned a lot from his books. To this day, I apply what he taught me.
But the Ogilvy & Mather co-founder wrote Confessions of an Advertising Man in 1963 – the “Mad Men” era. In it, he famously said “People don’t buy from clowns.” After reading that, generations of advertising pros refused to run hu- morous ads that could have been more profitable than what they went with. He also claimed reverse type was ALWAYS deadly. (Ogilvy was right about reverse type when used with long copy. But in short headlines? Come on.)
Clearly, it’s best not to treat the precepts of Ogilvy, or any old masters who left the scene long ago, as gospel.
Study Picasso’s early work and you’ll notice he was a classically trained artist. He mastered the academic rules of his craft. But as a young man, Picasso broke with many of his contemporaries and began creating groundbreaking art. To- day, when admirers speak of Picasso’s body of work, they break it down by innovation period (e.g., Cubism, Rose, Blue).
Optimarketers selectively choose when to apply the old rules, and often build on them. They don’t simply run with a “5-step plan for success.” Nor do they operate from a marketing “cookbook” or take a “paint-by-numbers” approach. They defy convention.
They’re revolutionaries – wearing smiles. They know how to work the system – and work with people. They get things done. They’re able to innovate inside organizations not previously known for innovation. And they’re not a tribute band honoring dead marketing legends. They operate in the here and now.
And speaking of rules…
THE “40/40/20 RULE” IS HISTORY
As a young guy in the business, I was a proud member of the direct marketing orthodoxy. Direct marketing fundamentalists are devout: They believe in rules. One of the most famous: the 40/40/20 Rule. It states that 40% of a direct marketing outcome is due to media; 40% is due to the offer; and only 20% is due to creative. Of course, at the time this rule was conceived, few direct marketers were doing interesting creative. So it was no surprise direct marketing creative rarely lifted outcomes by big margins.
But today, talented people create work that qualifies as direct marketing. Technology gives us an ability to deeply understand which messaging directions are most likely to succeed. And it’s never been easier to measure the contribution of creative.
In controlled testing, we’ve seen response-rate increases in excess of 100% entirely by virtue of creative. This doesn’t mean that media and offer aren’t essential. They are. But claiming that the creative element impacts only 20% of the outcome in all cases is simply false.
YOUR CONSISTENT OUTCOME-RAISER
Most marketing campaigns aren’t research-based or based on valid research. Far more should be for a simple reason: Outcomes are better when marketing is backed by reliable – and of course, highly useful – research on the front end.
Doesn’t matter if you have an IQ approaching that of Marilyn vos Savant (who evidently beat Einstein’s score): In marketing, you’re largely as good as your information. Research isn’t just important; it’s often make-or-break stuff.
Marketers have long relied upon research data. Before opening his own agency, the famous ad guy I mentioned a moment ago, David Ogilvy, worked for George Gallup, where he developed a passion for leveraging research data in advertising. It stayed with him throughout his spectacular career and gave his agency a competitive edge.
Back in Ogilvy’s day, and over several subsequent decades, primary research (collecting data that doesn’t yet exist) was often a fairly expensive proposition. Statistically projectable mail and telephone surveys weren’t cheap. Focus groups
– those artificial get-togethers of moderators sitting with “prospects” listening to each others’ responses while client and agency observe via a one-way mirror while munching on sandwiches – weren’t just costly, but often unreliable.
Since then, we’ve seen several major marketing research innovations. In the 1980s, account planning became popular in some major agencies. Account planners don’t just listen to consumers; they spend serious time with them in their own environments. As a result, creative work that emerges from account planning is often more genuine, compelling, and responsive. It’s an approach worth serious consideration.
As are web-based surveys. Typically they aren’t as in-depth as one-on-one interviews, but they’re capable of yielding valuable insights. Many feature-rich survey tools are free (or almost free) and provide marketers with hierarchal and other helpful data.
Thinking of producing an educational video series and want to defy conven- tion by learning which unconventional topics will be most popular? Deploy a web-based survey to your prospects and you may get an accurate ranking of priorities in minutes. And if you find an imaginative way to encourage people to respond, the response rate could be exceptional. In fact, if the incentive is strong enough, a web-based research study could also be a lead generator.
But what if you’d rather not do your own research? In many cases, recent, relevant research done by others (secondary research) is far better than nothing.
Whatever you do, don’t simply rely on someone like your mother-in-law, even if you think she’s in the target group. There’s a good chance you’ll be led astray.
Don’t “run it up the flagpole” by simply going from cubicle to cubicle and taking a tally instead of banking on valid research. Early in my career, I grimaced when colleagues “led the witness” by placing an ad in front of a co-worker and suggesting “Don’t you think people will see this and say to themselves…”
Research from inside one’s office tends to be fatally flawed. Co-workers ar- en’t your target group. The sample size is usually inadequate. The manner of presenting options may be biased. And you may receive feedback that’s about another agenda rather than the information you’re seeking.
Now let’s talk about the most accurate research of all. As the web took off as an advertising medium, the popularity of live testing (e.g., split-run tests of different options in Google AdWords) grew exponentially. Rather than rely on what consumers say they’ll buy, with live testing, marketers see what they actually buy in the real world. When they make sense, live tests run in projectable ways are superior to other forms of research, including focus groups.
One word of caution: Never do research merely for the sake of … doing research. Set it up so findings are, for lack of a better word, actionable.
COMMAND AND CONTROL
After college, when I marched (pun intended) into the full-time work world, a large share of executives were World War II vets. Much of what they knew about management was acquired while serving their country.
In the military, soldiers are taught to follow orders and not question them. It’s a command-and-control structure. I didn’t serve, so I can’t speak with expertise about armed services protocol. But I do know something about business and marketing in particular. In marketing, we need productive collaboration – not command and control.
Have you noticed each new generation of marketers has less tolerance for au- thoritarian regimes? I recall an autocratic company president who, when given details on a collaborative process that brought together the best thinking inside and outside his company, smirked and said he was the only one needing to be consulted. Businesses take a financial hit when executives make ego-driven decisions like that.
Marketers at all levels should feel comfortable questioning anything and everything at any time. Each year I attend meetings with marketers apparently afraid to disagree with the boss. Show me a marketing group where employees march in lockstep and I’ll show you one making costly (and unnecessary) mistakes.
Some of the most energizing meetings I’ve been in were those where an observ- er would have had a hard time distinguishing between internal and external people – or between the boss and everyone else.
Great ideas can – and do – come from everywhere. But when workers are worried about how their ideas will be received, they’re less likely to speak up. A great way to raise outcomes is to ensure everyone feels free to be heard. It’s often best to have the highest-paid person speak last, to encourage more (and more unbiased) contributions.
In a business world increasingly more interdependent, it’s vital to nurture relationships with external contributors. Optimarketers welcome people from the outside who bring valuable skills to the table. Unfortunately, some marketers feel threatened and try competing with these experts. Or even attempt to un- dermine their success altogether.
Marketers who operate this way may feel insecure about their role and get pressure from their boss to have a tight-knit group do all important thinking.
Your outcomes will be better if you and your colleagues support outside contributors. To make this consistently happen, employee performance evaluations should cover relationships with partners. Employees should be rewarded for maintaining strong relationships inside and outside the company.
How you collaborate makes a serious bottom-line difference.
If you’re interested, you can buy the book here. I have no vested interest in whether you do or don’t.