An interview with the father of direct marketing: were we've been, were we are, and were we're going.
Lester Wunderman is chairman emeritus and founder of Wunderman, which he launched in 1958. In 1967, he identified, named, and defined "direct marketing." During his career, Wunderman has helped grow the industry with theory and practice. In this interview he discusses the upcoming 50th anniversary of the company he founded and all that's happened along the way.
Shane Atchison: Wunderman celebrates its 50th anniversary this month. How does this make you feel? Did you ever think you'd make it this far?
Lester Wunderman: (laughs)
SA: Are you surprised? What do you attribute success to over the years?
LW: I'm shocked. I had stopped counting some years ago and suddenly its 50 years and what it's done is made me think back to the beginning. To things I had almost forgotten about. How we began and the tough times and how we reacted. The 50 years don't seem like 50 anymore. I'm surprised that we've been going on this long, progressing this long and learning as we go. But mostly, how much more competent we are now than we were then.
SA: What do you attribute success to?
LW: A lot of things. But the imagining and understanding the process of marketing in a different period...and getting to be as efficient as possible [are key]. It's what companies have to do. And the good ones are going to do it. It's not just about awareness anymore. Advertising that creates awareness is not the advertising that wins. Advertising that creates commitment is going to win. General agencies have never practiced this. They have been in the stage of emotional acceptance and the image-making business. And that's been a great business for periods of optimism. But when you get into periods such as this, of fear, does that advertising work? Or does a more pointed message work, one that is relevant to each consumer? I suspect that we will see a shift. We've seen it anyways in spending, as what we call direct marketing, but that shift will become more rapid.
SA: I read your book "Being Direct: Making Advertising Pay" probably about 11-12 years ago when I was running another interactive agency. It was one of my inspirations for starting Zaaz. The idea of isolating on the variable that will get the highest performance, whether it be a call to action, a button on a Web site, a headline definitely affected me.
LW: At the time that I wrote the book, we were just getting into the Web. You've come into a period where the Web is Cinderella.
SA: Although sometimes it's seems we're about to turn back into a pumpkin. Has technology changed things for the better? What do you think people need to be careful about?
LW: The big danger in our world is privacy. As we get to know more, how should we restrain ourselves? What standards should we set so that the information we use to create relationships and awareness does not violate the consumer's privacy? It's one thing to use the information to create service and another to create annoyance. We are running closer and closer to that danger line. Some people are starting to use that information and the analytics we collect to go too far. They risk the danger of going beyond the marketing process and to some other dimension of communication. There is a point where the consumer will start to resist.
SA: Any positive or negative examples that come to mind?
LW: I wouldn't name anybody but I think all of us recognize [them]. I get messages by phone, e-mail, regular mail, and the one thing I hate is "Dear Lester" from people who don't know me. It assumes an intimacy that doesn't yet exist. There is a big difference between being relevant and being personal, and I think that is one thing we need to be aware of.
SA: Any areas where you look at technology and data as making a more positive impact?
LW: We've returned to the kind of origin of relationships of small towns and small populations both on a social basis and a business basis. Media has returned us to personal engagement. This is a good thing. But this is also where I worry. I don't want to make friends with people who want to sell me something. The supermarket got it right. They proved that you don't have to be a friend; they only had to provide products at fair prices. That changed the retailing world. I remember going shopping with my mother [as a child], and we went to shops where they knew our names. The butcher knew what she was accustomed to buying. Data is returning us to that kind of relevance. It's creating warmth that has not existed in advertising when we were starting out.
SA: But the huge point you make is that it's easy to confuse the two.
LW: Yes. It's easy to abuse one and that's the danger.
SA: One thing we're seeing in the marketplace is what you invented with direct mail tests. That's certainly being applied with quite a bit of scientific rigor in the online display advertising. Are those techniques being applied after the click, when someone moves from the awareness vehicle, such as publishers or search engines, to the consumer Web site? Why do you think that is?
LW: We never had a click before. We did have other relationship vehicles (coupons), but we never had this situation where both parties are aware that something further is going to happen. The consumer clicks because she wants to know more. The marketer is aware of the click and wants to do more for the consumer. We never had that signal that could be the beginning of satisfaction for both parties. It has to be dealt with carefully. Corporations have got to set up departments that are sensitive to potential danger that the click can create.
SA: As a marketer, how were you able to rationalize or talk a client into trying different variations of an audience for a direct mail campaign? That was a new concept that you introduced. It had to be tough.
LW: We were always taking parts of lists and changing different parts of data (A/B) to test media. We got quite sophisticated with that, and we developed a lot of research that told us what was the most effective communications and to whom those communications would go. The trouble with the "to whoms" was that they were groups. At the outset we did not get down to individuals. We had database groups, and therefore it wasn't personal. It was somewhat relevant but was not personal. It did not create a relationship.
A click has such important potential. But we haven't yet defined all of the dimensions of what a click can mean and do and what we should do about it. I think we are getting better at it. It's come a long way. But people respond for a number of reasons. I don't believe we fully understand what they are. How committed is that click, and what does it mean? We have to find out how analytics must grow because of these questions.
SA: I related to that thought as a marketer. We are seeing a realization of translating that click to wherever it is in the marketing funnel, to the monetary impact to the business. Comment on that as far as tying marketing behavior or marketing response to the financial impact or performance.
LW: We've used persuasion, technology, lots of tools to create the click. But what is the consumer reacting to and what should we be doing next? How do we identify the click as being serious business potential or curiosity? How do we convert curiosity to relevance?
SA: Shifting gears to the current economy. Do you agree there's a slowdown? What advice would you give marketers who care about data and want to utilize data to navigate through economic slowdowns?
LW: A rising tide raises all ships, and a declining tide tends to lower all ships. How do companies prevail in hard times? I grew up in hard times. I was a kid, 12 years old, in 1932. People were running for the bank because their money was being threatened. But Roosevelt was an innovative president; he took the country along with him. And I remember that the switch from insecurity to security took a couple of years, but he got it. The question with this administration and the next is: will they have what it takes to lift the lowering ships? Companies that know how to prevail and how to use their marketing tactics when the wind is blowing against them will succeed.
SA: If you had one thing to say to our current clients in this economy, what would you tell them to do?
LW: Be sure they are not wasting their resources and that they are engaging the things that work. I'd tell them to be careful and to use what they know. But I think the danger is when you stop finding out, once you are in a fear mode. Fear and imagination are opposite. Consumers are worried about how to use and protect their assets. They want the best value for their money. I think everyone is starting to cut back, looking for the most economical way to shop. That is going to create new selling propositions. Companies that know how to market will create satisfaction and confidence in the process of the product and transaction. They will do well. It happened during the Depression. Ice cream on a stick (Good Humor) was created then because people were looking for inexpensive rewards. As for now, it's going to be an interesting game. The market will change, brand awareness will change.
SA: Is it a time for smart risks?
LW: Oh yes. Some people will always solve the problem better than others. And if we're smart, we will look to them to see what they are doing.
SA: It is a time for brands to coddle consumers, more so than usual?
LW: Not really coddle, but fine-tune the relationship. The difference between a consumer and a customer is what makes success and failure. A consumer might become a customer. A customer is someone who is using a product. If you have a customer, you have to nurture that relationship. You have to make sure the customer continues to buy your product. I think there are going to be tricks and promotions within advertising and marketing. These will cement those relationships.
SA: As a marketer, especially in this economy, being able to actually measure what consumers are doing and not doing, and what their intentions are, is critical. There's still a substantial gap when we look at digital marketing.
LW: We're selling a kind of marketing life insurance.
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In 1998, Shane co-founded ZAAZ to advocate a different approach to Web services — one that respects and delivers on the power of the individual and the promise of Web technologies. As CEO, Shane leads the company's long-term strategic vision of working with leading financial service organizations, consumer brands, startups, non-profits, and community-based organizations, helping each realize the potential of the Internet and its meaningful impact on their business.
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