Friday, September 30, 2011

BIG’s Blog: When You’re a Hammer, Everything Looks Like a Nail

When you’re a hammer, everything looks like a nail.

Think that’s not a truism? Try this: call up several of your physician friends who are specialists: i.e. an internist, an ophthalmologist, a psychiatrist, and describe an undiagnosed pain you are having. Listen carefully. Each one will lead with a diagnosis that is close to their expertise and specialization. These are very bright people, yet almost always they will look at something new from their experience and expertise. Most of them are so bright that they will even tell you that is their bias. Are we any different?

Right now, direct marketing agencies are trying to figure out how they should be helping their nonprofit clients transition to digital. They are quickly trying to figure out how to meld the demands for new digital marketing services, while still keeping direct mail – their economic bread and butter – viable.

I understand this completely as I ran a very large direct marketing agency in the 1990s even as the digital revolution was starting. We knew how to make money on direct mail and since it was mailed in such huge volumes, this was big dollars for the agency. But today, the economic mainstay of direct marketing agencies, namely direct mail, is declining. These agencies know how to make money creating and producing direct mail, but can these agencies have a viable and sustainable business model in the future as direct mail declines?

My sense is that just like some of today’s nonprofit fund raising organizations that are heavily reliant on direct mail, some nonprofit fund raising organizations and some direct marketing agencies will make the transition and some will not.

The hot buzzwords today are integrated marketing through multiple channels. Even we write and talk about it as the future of direct marketing for nonprofits. While I agree that integrated, multi-channel direct marketing is the future, I am less certain that it will be practiced in the same way that we practice direct mail marketing today.

My fear is that everybody thinks we are just going to use the same model as direct mail and translate it into digital. This makes some sense when you compare direct mail and email. They are kind of the same thing. But even between printed mail and digital email, there are very real differences in the dynamics of use.

Here is an analogy. We all still read. Reading is still reading but getting a book, magazine or newspaper is functionally different between print and digital. And it is this functional difference that is fundamentally disrupting the traditional book publishing and printed newspaper business. If the book publishers and traditional newspapers can’t figure out how to make money in a digital world, they will go out of business. So then, how will we get our favorite books and newspaper “news” if these businesses can’t figure out how to make money in the digital world?

The answer is that somebody will figure it out. As long as there is demand and competition, somebody will figure it out.

Ah, but will that “somebody’s” business look like the old traditional book publishers and traditional newspapers? I doubt it.

THAT is precisely the reason I worry about the traditional direct mail marketing agencies that 20 years ago only offered direct mail and now are offering a host of digital services, but still using the same traditional direct marketing model.

The movement from direct mail-based direct marketing fund raising to integrated, multi-channel marketing with the same direct marketing model seems to me like incremental change. I don’t think what we are going through is incremental change. I think it is a profound and fundamental shift.

Creeping incrementalism isn’t going to cut it. Keep the direct mail fund raising model for as long as it’s viable and raises revenue for your organization. But, digital is profoundly different as are the behaviors of the “younger” targeted audiences you are trying to reach with digital.


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