Direct Response VS Brand

The fundamental problem with allocating the overwhelming majority of your marketing resources (money, people, focus) to demand-harvesting DR is not simply that it optimizes for short term revenue, it's that it steals from future high profit growth and converts it into short term, easy to measure, ***less profitable*** revenue.

How can this be?

The creative assets that “win” according to in-platform ROAS metrics simply do not increase the probability that a consumer will, once they see that ad, be more likely to seek/choose your brand/product when they are in market for your product WITHOUT being prompted by an ad, every time they are in market for your product.

The 'EVERY TIME' is the key.

Profit expansion happens when customers purchase from you every time without having to be prompted by a conversion ad every time.

That's what building, and strengthening brand means.

We don't invest in our brand for the sake of it, or because it's fun. We do it because it will generate more profits than anything else we can do with our marketing resource investments.

Gotta keep hammering this idea home, but the important detail is that brand building creative & channel selection does not just drive the single purchase you're buying with your conversion DR creative & channel selections LATER.

That would be way worse than what we're doing today by using DR to drive purchases NOW.

The key is that the potential customer's mental availability (look it up) for your brand has changed as a result of the marketing investments you're making, and as a result, there is a higher probability they will seek you out every time they are in market for your product.

If building brand is truly increasing the probability that a customer will seek you out - unprompted - every time they are in the market for your product, you can make an argument that there is no more important investment area for your brand in 2024.

Obviously, it's not so simple. If it was, we'd already be allocating the vast majority of our marketing resources to brand building.

Therefore, more needs to be discussed on how to think about sizing your brand building investments based on how to calculate ROI, near term constraints / realities, and how to think about or approach 'robbing' the DR budget.

We'll discuss these ideas in future posts.


Fundamentally, it comes down to these questions to ponder:

Do you want to feed a vicious cycle of getting more 'attributable' revenue today, knowing you'll have to purchase an ever increasing percentage of transactions as time goes on?

or...

Do you want to feed a virtuous cycle where you're allocating more resources to channels & creative don't show as much 'attributable' revenue today, but build compounding brand value where -- assuming your physical availability is able to keep up with the mental availability you're driving -- you're increasing the probability you can drive ever-increasing contribution margin & dollars (profits).
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