David Ogilvy, founder of Ogilvy Mather and considered by many the “father of advertising,” once said, “I expect the direct response people to become an integral part of all agencies.” It turns out his prediction was accurate. Today, the vast majority of ad agencies and in-house marketing organizations both big and small support demand-gen programs.
However, while Ogilvy’s words still hold true, many of the direct marketing rules from his day have gone the way of the two-martini lunch. One example: the classic direct marketing 40/40/20 rule.
Developed in the 1960s by marketing guru Ed Mayer, the 40/40/20 rule is designed to help marketers understand where to focus their efforts. The rule consists of three core elements that were critical in direct marketing campaigns before the Internet:
1. 40% Audience
Marketers primarily used direct mail lists to generate demand for their products and services. Like any media, you could segment mailing lists by a range of criteria. Target the wrong audience, and your campaign was doomed.
2. 40% Offer
An offer is the value exchange you are providing and drives the recipient to the action you want them to take. A discount on a product, a rebate, or free delivery–the offer is what you merchandised as the call to action.
3. 20% Creative
Creative encompasses everything—the message, visual elements such as typography and layout, and, of course, the copy. While it may only account for 20% of the “rule,” creative components could make or break your campaign.
Direct marketing in a post-Internet world
Does the 40/40/20 rule have a place in today’s digital demand-gen era? In many ways, I think it does.
However, the ascendance of digital media, the variety of content platforms, the evolution of the buyer’s journey, and the proliferation of marketing technology (martech) and measurement tools require a rethink of the variables that comprise the 40/40/20 rule. The fact is, many programs have not changed and many marketers still follow the old formula. But that formula is no longer valid in the digital world. If demand gen marketers stick to the old rule, they risk poor performance.
Here are the new variables companies should consider when developing a demand gen campaign:
- 20%: Audience: Know your target–it’s the most critical variable. But move beyond simple demographics. Create detailed personas that include the emotional and rational triggers that compel your audiences to act.
- 20%: Content: Content remains a vital component in driving engagement and response, especially in the martech era. To succeed, you need to provide the right content aligned to the right personas across the entire buyer’s journey.
- 10%: Data: Data drives when, how, and to whom you communicate. It influences your decision on channel and cadence, and it’s key to understanding your campaign ROI. Data has always been important, but with advances in data capture capabilities, it has become integral to demand gen success.
- 10%: Distribution: With so many marketing distribution channels (paid, owned, and earned), it’s important that you understand and optimize your efforts based on where your audience is consuming information.
- 10%: Offer: Offers are still an important component in communications, especially for nurture programs and sales enablement. The better your offer is, the better your response will be.
- 10%: Messaging: Messaging was once considered part of “creative,” but it’s too important to be lumped into that bucket. Messaging offers a framework for how you position your offers and content. It establishes the voice and tone for your campaign and determines how audiences perceive your brand.
- 10%: Alignment: In today’s multi-channel multi-platform world you need to provide audiences a consistent experience across all your brand touch points. This requires alignment across marketing and sales so that both organizations are in sync. Sales needs to knows what marketing is putting into market.
- 10%: Visuals: Graphics, illustrations, data visualization, iconography, or photos—no matter the format, they’re a big element in today’s demand generation efforts. Research shows that visuals can increase information retention in a campaign from 10% to 65%.
So, is there a need to update the 40/40/20 rule in today’s digital era? We think so, but would love to hear what you think. Start a conversation with us on Twitter.
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