According to Moore’s Law, the world’s aggregate computing power doubles roughly every two years. Although the axiom is difficult to prove or disprove, one thing is obvious: Rapid expansion in online, mobile, and data technologies has produced incredible shifts in consumer behavior, and those changes are only accelerating.
Nowhere is the pace of change more apparent than in commerce. In 2010, e-commerce accounted for 4.2 percent of retail sales. By June 2016, according to comScore, online sales accounted for 51 percent of all U.S. retail activity. And while the first iPhone was introduced just 10 years ago in January 2007, 44 percent of e-commerce purchases are now made via smartphone.
Only a decade ago, DR marketers were eager to win shelf space at the local Walmart; now, they have to be everywhere the consumer is—just like the big consumer brands. Similarly, the line between brand advertising and direct response is blurring. Major brands like Geico are essentially DRTV advertisers, and the nation’s ninth- largest retailer—Amazon—allows shoppers to buy virtually any product direct like so many Schtickies.
DR advertisers have transitioned gamely from telesales to mass retail to omnichannel. But the pace of change is so rapid that its amount and impact may double again by the time the decade closes. ER asked several experts what lies ahead for direct response, and the future, it seems, may be just as mind-boggling.
Multiple Medias
The prevalence of multiple screens has shortened consumer attention spans, and that means people probably won’t sit still for the classic long-form in a few years. “By 2020, more marketers will realize that they can accomplish their goals with shorter lengths—:15s, :30s, and :60s,” says Peter Koeppel, CEO of Koeppel Direct.
“The trend toward watching TV with a second screen is only increasing, so all an advertiser really needs to do is sufficiently compel a viewer to go online to learn more, and then the marketer can close the sale,” he notes. “Shorter lengths are easier to clear and more cost-effective than longer lengths.”
The trend is so pronounced, in fact, that traditional TV will likely lose its position as the king of all screens, and that will affect creative treatments. “There was this unwritten rule that television is the primary screen and the other screens are secondary, but it’s a multiscreen lifestyle now, and we will have to tell a brand story [using] minichapters that evolve over multiple platforms,” says Dena Levy, founder of Two-D Productions.
“Long-form is getting tougher to make work,” she adds. “You have to learn how to engage and tell a story in a smaller amount of time, and that’s a challenge.”
“There will be a revolution in time lengths—more seven-minute, five-minute, and four-minute media, and fewer half-hours,” says Ava Seavey, queen bee at Avalanche Creative Services. “It will drive predictive analytics crazy as [fewer responses] will be immediate, and ‘MER’ will become the sound a cat makes—not a standard for evaluation.”
Deep in Data
To DR marketers who started out with dedicated 800 numbers, order attribution is the sharp thorn in omnichannel’s flower. Fragmentation has made data analytics a highly educated and intricate guessing game, and attribution’s art and science will become even more granular by 2020 as data proliferates.
“Key performance indicators (KPIs) will continue to change, and attribution- and metric-driven decisions will become the basis for marketing,” says Lori H. Zeller, managing partner at THOR Associates. Automation may be able to help advertisers cope, she adds: “What we know as programmatic today will become the norm.”
Agencies will need to excel at data management and integrate their messaging strategies across channels to “drive performance in addition to creating brand loyalty,” Zeller says. Campaigns must offer “a strong call to action that drives business and brand results, yet have the fluency to retarget consumers and deliver engagement.”
Advanced Targeting
Employed properly, data will ultimately help advertisers reach specific customers at the various touchpoints they traverse. “Programming will be device-neutral, meaning it won’t matter if we’re talking about a TV or smartphone or tablet—it will just be a screen that delivers content,” Koeppel says. “And that content will be increasingly customized and individualized, allowing advertisers to reach very targeted niches.”
But Amazon’s increasingly market- dominant subscription model may affect content as cable packages and network schedules dissolve, he adds. “In a universe dominated by à la carte programming, consumers will opt in for advertising to offset the cost of watching such programs,” Koeppel says. “The likes of HBO and Netflix might have two tiers of service: one with advertising that is discounted, and one that is ad-free that viewers pay a premium for.”
Advertisers won’t be left wanting for outlets and opportunities, though. “The number of individuals who are [themselves] broadcasters will explode via social media, and that will usher in all kinds of marketing opportunities from traditional, interruptive ads to product placements, paid endorsements, live [and] time-urgent flash sales, and other yet-to-be-identified opportunities,” Koeppel says.
Social media will provide the ultimate endorsement. “Word-of-mouth was everything growing up,” Levy says. “Now, we can post our favorites, and it gets heard and read and seen by more than just our circle of friends, like word-of-mouth on steroids.”
Creative in Character
Creative treatments will also become device-neutral. “We have to create engaging content and conversations at every consumer touchpoint,” Levy says. “Omnichannel is not going to go away. We will have to be more nimble and have to deliver a more cohesive creative execution across all channels.”
Authenticity is the key, she adds. “People will care more about the culture than the actual product. The customer wants to know who you are and what you stand for. Do they do good? Are they green? There are so many factors—you have to be mindful of transparency.”
“The creative and the offer will be more about engagement and less about immediate purchase,” Seavey says. “There will be more humor, and DR will be more blended with brand.
“[There will be] more characters associated with products—and by ‘characters,’ I don’t mean pitchmen,” Seavey predicts. “I mean characters—fun characters who may become their own form of celebrity (à la Progressive’s Flo).”
Getting the Goods
For much of the current decade, logistics and fulfillment have been defined by strategies that encouraged shoppers to browse, purchase, and take delivery in the channel(s) of their choice, linking inventory information via sophisticated data networks. And thanks mostly to Amazon, consumers have become accustomed to getting what they want when they want it—and they’re reluctant to pay for shipping.
“Customer expectations are driving big changes in the way businesses operate,” says Ayal Latz, owner of a2b Fulfillment. They want the delivery experience to be seamless and personalized, but mostly they want fast, he adds. “Speed of fulfillment and delivery is of chief importance; consumers want to receive their goods with more immediacy than ever.”
The futuristic delivery methods and other innovations floated by tech giants may not seem so farfetched by 2020. “We’re seeing a lot of new trends in workforce automation such as the Internet of Things and drone delivery, which I think will take time to develop and adopt, but will certainly help control fulfillment costs,” Latz says. “Also, there’s transportation: Uber is already introducing delivery options in major markets, and self-driving vehicles are going to continue to evolve and move into the ‘carrier’ realm.”
Orders in the Court
In the past, DR’s legal challenges have been largely identical to those of general marketers, usually involving claims and substantiation, says Ed Glynn, an attorney with Locke Lord LLP. But new problems are emerging from the buying experience, and regulatory bodies have started to expand enforcement activities in these areas.
“Poorly communicated continuity arrangements, improper outbound sales—buying experience issues where you’re contacted improperly or something goes haywire with your purchase,” Glynn says. “These are relatively new issues, and I think the Federal Trade Commission (FTC) will continue to be very interested in them.”
One of the biggest problems facing advertisers in the mobile era is announcing offer terms and conditions on whatever size screen consumers choose to use—and getting them to pay attention. “More and more, this is what they call a zip-glance economy,” Glynn says. “People spend five or 10 or 20 seconds looking at something. Then they get whatever it is, and are shocked and infuriated when the full terms become known.”
It’s difficult for an advertiser to ensure that the buyer comprehends product claims and offers completely, or even to show a good-faith effort to educate them. “It’s a tough issue, and it’s going to be developing for a while,” Glynn says. “Where do you substantiate, where do you disclose, and when and how much burden can you put on the consumer to find it?”
“There is a real tension in what you can disclose in a quick internet- or social media-based advertising interaction,” he notes. “You have to say, ‘Look, there’s a lot more information you’ll want to look at.’ These are things that need to be disclosed about the product: ‘Not intended for users under 18,’ how long you have to return it, and that kind of thing—stuff that’s basic to understanding the attractiveness of the product or service.”
Another emerging legal concern for marketers? Attribution—or more specifically, how closely a company can track the purchase path before it is considered an invasion of consumer privacy. “Tracking people runs afoul of the very strong privacy interests that are reinforced by FTC and have significant support in Congress,” Glynn says.
“The most popular thing the Federal Communications Commission ever did was the Do Not Call list, and this is in the same category,” he says.” People don’t like being followed. And if you think you might have a problem in the United States, that problem will be redoubled in Europe, where they take privacy a heck of a lot a lot more seriously.”
Looking Beyond
The decade beyond 2020 will see social and technological shifts set to fast-forward, the experts agree. Disruption will be the norm, as more and thus-far-unimagined applications are developed and deployed on the network once known as the internet. Input devices such as the iPhone and Amazon’s Echo may be refined beyond recognition—or replaced entirely by a new technology.
Success will be defined differently, too. “By 2030, the lexicon will have changed,” Zeller says. “ROI will have a completely different definition. Television will continue to be a primary vehicle, [but] TV will no longer be TV as we know it. By 2030, there will be one device—the IP address. Technology will [enable] a journey predicted, and supported by, content that’s specific to each consumer.”
Direct response advertising will still involve producing “compelling video content” and sending it to screens, Levy says. “But we may no longer need the mobile device. Right now, we’re thinking there’s no way we would ever not have a cellphone. But who knows? Everything is getting so automated. We’ll still want video and a story, but the viewer will decide which is the dominant screen.”
DR content will rarely include a phone number by 2030, Seavey adds. “Spots will be shorter and appear on Netflix and any other place advertising is currently not allowed. Offers will direct the consumer to download an icon that will ‘live’ on their Facebook, Instagram, Snapchat, or other, yet-to-be-invented page, so that they can view more of the pitch and order directly at any time. They won’t have to go to a website, Amazon, or anyplace else but their own private Idaho.”
With so much content to disseminate and such automated, targeted specificity, she adds, it will ultimately become difficult for consumers to avoid a sales pitch. “The whole world will be an ad, and to escape from it will be the challenge,” Seavey says. “Teenagers will rebel and put down their mobile devices in defiance. Human beings will start to learn how to talk to one another again. It will be a human revolution like no one has ever seen before—except maybe their great-grandparents.”