Of Gumball Machines and Commercial Jets
Business people are attracted to direct response ads because they want their advertising to function like a gumball machine. “You put in your money and you crank the handle and out come the results.”
In theory, direct response marketing is tidy and scalable and predictable. “Put in a penny and you get one gumball. A nickel gets you five gumballs. Give it a dime and ten gumballs emerge. A quarter? You guessed it: twenty-five gumballs.”
The problem is that this gumball machine called “advertising” never functions quite like it should. Sometimes you crank the handle and get a huge gumball. Sometimes you get a tiny one. Sometimes you get nothing at all.
Even when you’ve found an offer that generates predictable, scalable results, you’ll find these results will erode over time. The longer you keep pumping coins into that gumball machine, the less well the machine will work. The gumballs will keep getting smaller and smaller until you finally go broke.
No direct-response ad campaign has ever worked long-term.
So gather ye gumballs while ye can. The sun will soon go down.
And then it will be dark. Welcome to the night. And it’s going to stay dark until you come up with another clever offer that will produce results for awhile. And then that clever offer will quit working, too.
“Clever offer.” That’s the key to a successful direct response ad. You’ve got to rock the customer’s world with an offer they can’t ignore. And then you must say, “But wait. There’s more! Order now and we’ll include at no extra charge…” This is called benefit stacking.
Remember Columbia House? They did $1.4 billion in 1996 as a result of direct response marketing.
Nineteen years later, Columbia House filed bankruptcy. Their 1.4 billion fell to just 17 million in total sales. In other words, the size of the gumball coming out of their “predictable, scalable direct response machine” used to be 8,200 percent bigger.
You could argue that what killed them was the emergence of the internet, but your argument won’t hold water. If Columbia House had built their business around the customer instead of around the offer, they would have become iTunes.
Google just told me iTunes is trending to do $5.03 billion this quarter; more than $20 billion this year.
Apple built iTunes through bonding, not direct response.
The reason gumball people don’t like to invest in bonding ads is because it’s like flying on a commercial jet. You hear a roaring noise as the plane begins to rattle and shake and unsustainable amounts of fuel are consumed and OH-MY-GOD we’re approaching the end of the runway!
“This sucks. I don’t like it. Shut this thing down and get me out of here.”
I weep at the number of advertising flights I see aborted. All that money invested and the twitchy little bastards never even left the airport.
But if you can summon sufficient courage – and fuel – you’ll experience a moment called “liftoff” when everything suddenly gets smooth and quiet and the nosecone of the plane tilts sharply upward.
You’re pressed back into your seat as you climb.
Wow. You can see forever from up here.
Goodbye Columbia House.
Roy H. Williams