We Need To Talk About Dialogue Marketing

How classic formats from catalogues and direct mail to events and product sampling can be optimised in a data-driven world

By Maren Seitz, Head of DACH, at Analytic Partners

The world of marketing is becoming ever more complex with digital innovations coming thick and fast and on a seemingly daily basis. Even the savviest of marketers would be fibbing to claim they understood the complete ins and outs of every digital innovation, be that NFTs or the metaverse.

But one advantage of the rapidly evolving digital formats is that they lend themselves to measurement based on precise data, both for short-term performance and over the long-term.

Even the end of cookies is no real threat to measuring advertising effectiveness. Thanks to the advances in  Commercial Mix Analytics (CMA) – businesses can enjoy a more holistic, faster, and more granular measurement framework and decisioning system than ever before without tracking users around the internet.

The temptation is to be lured in by the latest easy-to-measure, new, shiny thing, and turn one’s back on the hard to measure stuff – but it would be remiss to overlook some more traditional tools in the marketers’ toolbox. We really do need to talk about dialogue marketing. Sometimes dismissed as ‘boomer’ activity – dialogue marketing encapsulates a myriad of activations from catalogues and direct mail to experiential and sampling.

This is the area of marketing that seems to have been lost in the data-driven measurement world.  It can be harder to measure since data is missing, or various components contribute to each other. However, dialogue marketing activities offer a physical variable that can sharpen the emotional connection to the brand, and thankfully through CMA we actually can capture their performance as well.

Something With Digital Media…

Inevitably some formats appear less exciting than others. Who wants a catalogue when you can create a new, uber-creative video on TikTok each day? This lack of excitement is compounded by the assumption that these formats are close to their sell-by date, only appealing to a dwindling, non-digitally savvy group. Even IKEA has discontinued its printed catalogue.

Despite this, there are many examples of dialogue marketing still being used. From the thousands of catalogues and leaflets in mailboxes and at supermarket exits, to brands sponsoring international football clubs and music events worth millions. And who doesn’t love the small samples in the starter bag of the local 10km run?

But calculating the ROI for these activities to prove – or disprove – their importance is rather tedious. They aren’t usually associated with “working” reach-related media expenses, but only incur “internal” or “non-working” costs such as production and employee hours, making it difficult to compare with other investments such as TV. In addition, there is often no way of knowing how many people were reached how often, as an equivalent to impressions or GRPs. We might know what the promotional stand at the 10km race cost – but how many people visited it? And we might produce the same amount of leaflets and catalogues each month – but how many people are taking a catalogue home? Now listen up, fellow marketers: a sophisticated Commercial Mix Analytics, thoroughly covering data for activities and spend, can help with analysis and measurement, and integrate them optimally into the marketing mix.

We’ve Always Done It This Way – and It Works

We need to take a step back and look at the detail of how effectiveness can be measured in a CMA mechanism. The aim – similar to more old-fashioned Marketing Mix Models – is to explain a dependent variable such as sales. All variables that might be driving these sales should be considered and included in a model. To then recognise a connection between these variables and sales, there needs to be some variation in the data. In other words, it is not possible to identify what is moving in sync, if there is no movement to start with. The more detailed the collected data, the more “variance” typically exists and the more granular the analysis can be.

Consider a simplified example: if sales increase in sync with my spending on TV, then one can deduce how much TV influences sales. However, if TV spending is only provided at a monthly national level and always the same, then you can’t explain peaks and troughs in sales with them. You need more granular information, such as weekly or regional level and other activity data, to get as much variance as possible.

The better the data, the more precisely you can measure and optimise your business activities. But why is that so difficult with the formats mentioned, and how can you still measure their success?

  1. In-store catalogues: The biggest problem with this activity is tracking how many people are reached, as the catalogues often just lay around in the store and are picked up at random. If you integrate coupons or customer cards, however, you can get a much better gauge of the uptake of these catalogues as well as of the effect of these coupons on sales. But the next step of overlaying costs to measure the return on investment is still a challenge, since no “working” media costs are allocated to this medium. To gauge ROI, it is then advisable to work with A/B tests, proxies or cost estimates and scenarios to understand the impact on sales.
  2. Mail order catalogues: An absolute classic, from 12 to 284 pages. But like the catalogue in the store, tracking its impact is a problem. So, especially in times of paper shortages and digitisation, why they exist at all is often questioned. For one client, we undertook a geo-demographic analysis to define the areas where digital content works best and where paper can be saved without negatively impacting offline and online sales. It turned out that, in fact, 22% of the catalogues could be eliminated with negligible impact on sales. Instead, the digital measures were ramped up in these areas and for the corresponding target groups.
  3. Direct sales: We are not talking about the classic vacuum cleaner representative here, but rather training courses, on-site training, sales, and sampling over the phone, in retail or in medical practices. This can be used in a particularly targeted manner in a world of information overload. With the help of CMA, for example, the optimal number of on-site visits can be determined if data from the CRM system is integrated. This includes virtual conversations too. They are often less effective, but much more efficient. This helps brands determine when sales rep phone calls and visits are just getting on customers’ nerves.
  4. Events: Events and experiences are emotionally charged and anchor themselves deeper in our brain than a pop-up banner. And brands are aware of the importance of emotional connection. But how do brands know how many people have seen the ad and which of them is driving sales as a result? As with the in-store catalogues, estimates and proxies can be used here, such as the number of samples distributed, the number of free muesli bars handed out after a 10 km run.
  5. Sponsorship activation: Sponsorship programmes are multi-faceted and involve diverse activities, making measurement inherently more difficult. The impressions are not always easy to capture, e.g. perimeter advertising in the stadium. Again, you must work with proxies or estimates. These can include viewer data, number of spectators in the stadium, and the length of the game. But how to clearly separate from other activities? Even within “easily” measurable TV, this can lead to difficulties. When a football player advertises hazelnut cream, often the effectiveness of TV is evaluated, but not the sponsorship. To crack this, however, comparisons between advertising with and without the footballer can be used in the CMA. The percentage added value is then attributed to the sponsorship as a proxy. In this way, we have already been able to optimise several million euros in sponsorship costs for our customers.

Stick or Twist?

Whether these classics are appropriate for a brand is relative – and each should be evaluated against the bigger picture of the marketing strategy. What are the objectives – is it about building a strong brand or about converting to purchase? Where can the target group be found, and which media do they use?  For some brands, the analysis points to stopping certain activities, while for others the activities should be increased.

What is critically important is to overcome the perception of “immeasurability”, making sure these activities are put to the test, questioned, and repeatedly analysed for their relevance in the marketing mix – just as one would do with any other medium. Businesses – with the help of experts – can use technical tricks and proxies that help to make comparisons, develop scenarios, or use test & learn approaches.