Repurposing Content

Here's the working hypothesis ... I believe that transactions that used to reside in Direct Response are leaking out into Customer Media Marketing, lowering response in Direct Response while also increasing costs as Direct Response customers "try harder" and compete with each other.

One of the first steps you'll see businesses take is what I call "repurposing". Head out to YouTube and you'll see Progressive doing a full-on "repurposing" job (click here). Repurposing isn't terribly effective, of course ... they have tens of thousands of people watching the commercials online ... who knows how many 64 year olds are forced to watch the commercials on television ... maybe a half-million to a million per day? Don't know.

Customer Media Marketing starts online ... that's the trunk of the tree ... branching out from there. Repurposing content is a good first start. It's not likely to work. And when it doesn't work you'll remind me that the discipline doesn't work. It does work if it isn't an afterthought.

The Evolution Has Been Happening For Five Years - We're Noticing It Now

Here's the framework I am working on ... as I learn more, I reserve the right to change the framework.

My hypothesis.

• COVID changed how marketers "market" to customers, teaching a generation of marketers how to use a fusion of video and community (which both existed prior to COVID) increasingly fueled by AI (#tiktok) to sell to customers who "trust" those making the content.
• As more brands become good at Customer Media Marketing, response leaks out of Direct Response Marketing and Brand Marketing, causing those disciplines to become less effective.
• As Direct Response Marketing becomes less effective, more brands attempt to get the clicks that remain, driving up costs in a discipline that is simultaneously becoming less effective.
• Direct Response Marketers, instead of embracing Customer Media Marketing, embrace Product Marketing channels like Marketplaces (i.e. Amazon), where they continue the tradition of paying a nominal fee for access to customers ... ultimately transitioning from being a Direct Response Marketer to being a supplier for a Marketplace. The Direct Response Marketer becomes the "Dries Van Noten" to Nordstrom.

Obviously, Direct Response Marketing isn't "dead" as a small number of pundits might say. Rather, this is the end of an era. At some point, Customer Media Marketing will become too crowded, and a newer and more relevant version of Direct Response Marketing will emerge. But for today? Change is in the air.

Why do I think change is in the air?

When I analyze your data, there are clear trends, trends that accelerated post-COVID.

• Loyal Customers generally have similar repurchase rates over time.
• All other Customers generally have lower repurchase rates than they had in 2015-2019.
• Regardless of Direct Response business model, it is becoming VERY difficult to acquire new customers at a reasonable cost.

There was a day a year ago when this all really started to click for me. I'm analyzing customer behavior (a hollowed-out middle of the customer file paired with customer acquisition challenges) while watching a Headphones.com video about open-backed headphones ... meanwhile my wife is in her office watching live coverage of a "national de-cluttering day" ... an all-day seminar hosted by de-cluttering experts. I don't even know if this is the right link, if wrong, it's similar ... maybe this one. That woman has a million followers and several hundred thousand views of popular videos. I mean, Joe Rogan and his ilk gets all the attention ... but this stuff is everywhere, bubbling under the surface ... and it is increasingly linked to ecommerce (i.e. Headphones.com).

As a commenter said to me on LinkedIn ... "YouTube is now the primary lead gen source for many businesses".

Once you see this ... and then see the connection to Community and Action Streams (capturing customer interactions like visiting your forum or website ... then sending streams of emails to customers based on their forum/website activity) ... you realize that a chunk of activity that used to reside in Direct Response now resides in Customer Media Marketing.

This evolution has been happening for the past five years ... we're just noticing it now.

It's Time ... Again!

Tomorrow we'll get back to Customer Media Marketing.

Today, it's time ... again ... for the next run of The MineThatData Elite Program. It's an evaluation of how your direct response marketing activities impact customer behavior. For a nominal fee ($1,800 pre-paid for new clients, $1,000 pre-paid for existing clients) you get my standard suite of analyses (rolling twelve-month, comp new/reactivated customers and comp segment, annual repurchase activity, a forecast for the next year based on high-level customer segments).

Contact me now (kevinh@minethatdata.com) to get started. Given what happened in April, I'm anticipating heavy demand for this inexpensive view of customer behavior ... I expect to be exceptionally busy in June as a consequence.

Timing:

• 5 Years of Customer Data Through 5/31/2025.
• Payment Due by 6/10/2025.
• Data Due by 6/15/2025.
• Analysis Delivered by 6/30/2025.

A Possible Framework

Below you'll find a hypothesis I'm working on ... one with a category I call "Customer Media Marketing".

COVID changed marketing. We didn't know it at the time. We trained a generation of marketers to become mini-movie makers. Instead of having a movie theater of fans eating buttered popcorn, we created communities of customers/prospects who care about what we sell, and we developed mini-movies to entertain and educate our communities.

This shift pulled customers out of Direct Response Marketing, lowering response, causing problems (lower response + higher costs = trouble).

This shift pulled marketers out of Brand Marketing. Why try to dream up a branding solution when you can create 650 videos that fully explain who you are to the customer?

Review the image ... let me know your thoughts (kevinh@minethatdata.com). I'm confident that customers are leaking out of Direct Response and Branding into Customer Media Marketing.

Fallow

Is it fun to watch Beat Bobby Flay or Guy's Grocery Games? Sure. It's a fusion of Brand Marketing and Entertainment designed to provide an audience for advertisers (that's you) to interrupt the customer with a marketing message.

Last week about 365,000 people watched the new episode of Beat Bobby Flay, with 63% of the audience age 55+.

Have you watched Fallow on YouTube (click here)? This is an altogether different proposition. Two chefs in London teaching you all of the secrets of cooking in an informative and entertaining manner, with a humble, humorous, honest history-based approach. They've created more than 600 videos. They have 1.2 million subscribers. Average video clunkers attract a half-million views ... the gems attract more than three million views.

• Point of View Video:  Head Chef at a Top London Restaurant.
• Every Way to Fry an Egg.
• The Three Salmon Techniques Every Chef Should Learn.
• Is British Food Actually That Bad?
• This Is Why Vegetables Taste Better In Restaurants.
• We Cooked The Best Michelin Star Dish From Every Decade.

This is the opposite of Direct Response Marketing.

It's also the opposite of Brand Marketing. Toyota's Brand Marketing goal is to get you to buy a car. It cannot be the goal of these two chefs to teach you how to make something so you don't have to go to a restaurant, much less their restaurants, which you'll never visit anyway because you don't live on their continent.

What would you call this style of marketing? It's not vapid Influencer Marketing. It's something fundamentally different ... no different really than what Ryan Hall Y'All has done with Weather.

If you are a Direct Response Marketer dealing with dying marketing channels and/or expensive clicks and/or decreased response ... you are blessed ... somebody has opened a door for you.

P.S.: Here's a video that got over 800,000 views of a reviewer sampling the menu at Fallow. It's hard to be successful at this fusion of mini-movie-making and community and not have fabulous products/merchandise.

P.P.S.:  They freely give away all of their secrets. All of 'em. If you run a restaurant, you can copy them. Have at it. When I launched my business in 2007, I freely gave away everything I did - every technique - even today when I went through Action Streams, I shared everything in the booklet with you for two months before publishing the information for a nominal cost. You can give everything away AND still run a healthy business. Back in the 2007 - 2010 timeframe, service providers would corner me at a conference and inform me of what a moron I was for giving everything away ... "YOU DON'T KNOW HOW TO MONETIZE A BUSINESS". Sure I do. I'm using a very different business model than they were(are) using. Right now, the fusion of community and mini-movie-making is trending toward a different business model ... and from the outside, one might think these folks are morons. Time will tell.

Direct Response vs. Brand Pendulum

Here's USPS marketing mail volume since the fiscal year ending September 2008:

Aside ... when people tell you that #printisback, they fail to realize that every year the USPS publishes facts saying that marketing mail volume is contracting. The facts, publicly shared by the USPS, suggest otherwise.

When a marketing channel dies, costs within the channel disconnect with the reality of the marketing channel. Post-COVID, that is the reality of print ... paper / printing / postage costs escalate, while the effectiveness of the channel erodes. This causes those who use the channel to spend less, which causes service providers to charge more. If you believe this story doesn't end well, trust your instincts.

Those of you paying more for clicks in paid search and paid social ... pay attention to how this story plays out ... your destiny is connected.

Remember your homework assignment?

In some ways, it feels like an era is ending in ecommerce. Now, ecommerce is thriving, don't get me wrong. But an era is ending. The "direct response" era is ending. Is it "ending ending"? No. But it is ending.

Think about ecommerce as a pendulum. On one side is Direct Response. On the other side is Brand Marketing. Neither side gets along. Both sides serve a very different purpose. You don't leverage Direct Response marketing to get a customer to buy a Toyota Highlander. You can leverage Brand Marketing to get a customer to purchase Griot's Garage Speed Shine, though Direct Response is likely more appropriate.

The importance of Brand Marketing becomes painfully apparent when a Direct Response channel either becomes too expensive, unresponsive, or both. All of which is happening in 2025 ... paid search and paid social yield expensive clicks that are less responsive than they used to be. Marketplaces are a logical outcome of expensive clicks ... the Direct Response marketer leverages "somebody else's" traffic from a Marketplace to overcome expensive clicks ... paying a fixed percentage for each order instead of a variable cost for each click. Marketplaces are death, of course ... do you really want to be known as a supplier for Amazon or "that Etsy person with the cute stuff?"

Marketplaces are the digital version of a Mall. 

We all know what happened to Malls.

Your homework assignment should lead you to a realization.

• Direct Response in an optimized state with decaying channels = trouble.
• Brand Marketing is generally wasteful (sometimes due to the incompetence of the marketer employing the tactic ... and yes, I have the receipts).
• Marketplaces in 2025 are the refuge for Direct Response marketers without a Strong Brand. This may well be the right place for a weaker brand to be ... to become an Amazon supplier. Better than not being in business at all, right?
• If your choices follow a pendulum between Direct Response and Brand Marketing, you probably feel like you have an unsatisfying future.

Yes, you should realize, by this point, that there is a different approach you'll need to consider going forward. You're probably not going to like my answer. That's fine. Tomorrow, I'll share an example to get the process started.

When Marketing Channels Die

Remember your homework assignment from last week?

In 1998, 35,000,000 people would watch a Thursday night episode of Seinfeld. 24,000,000 would stick around to watch the dreck known as "Veronica's Closet" that appeared after Seinfeld.

Yeah, network television was a blockbuster marketing channel.

And then?

Not.

It was already dying back then, to be fair. Once cable television existed and you could watch the World Wrestling Federation on USA or see Larry King interview Donald Trump where he considered running for President in the 90s (click here), why watch Veronica's Closet?

If your marketing dollars were invested in network television (like Total Hair Fitness for example, click here) and you lose that bucket of opportunity, what do you do?

Advertising generally follows a law of diminishing returns.

One of the problems with the law of diminishing returns is that when a channel begins to die, performance gets worse, but the costs associated with the channel frequently remain constant or increase for a period of time ... by the time the economics of the channel force costs down, marketing effectiveness gets even worse. Example:

• 1998:  20,000,000 viewers. Spend $1,000,000, get $3,000,000 in sales at a 40% profit factor = $3,000,000 * 0.40 - $1,000,000 = $200,000 profit.
• 2012:   8,000,000 viewers.  Spend $600,000, get $1,200,000 in sales at a 40% profit factor = $1,200,000 * 0.40 - $600,000 = ($120,000) profit.
• 2025:   4,000,000 viewers.  Spend $500,000, get $600,000 in sales at a 40% profit factor = $600,000 * 0.40 - $500,000 = ($260,000) profit.

Diminishing returns continue, unabated ... but the death of the channel overrides diminishing returns. As viewers disappear, advertisers demand the absolute best prices and smaller advertisers are pushed out. Smaller advertisers go elsewhere ... they head into the digital wilderness where costs on Facebook / Google increase while response decreases (seems like a common theme), chasing advertisers elsewhere.

I worked with a company that doubled merchandise productivity over the course of a decade. That's one important way to overcome what happens when channels die ... as a channel dies, you find ways to get customers to spend more, offsetting channel death (for awhile).

If you're going to go down the "channel optimization path" where (as described in the document at the start of this post) you focus on short-term ROAS, you have to have a plan to account for channel death. Yes, especially for digital marketers. What the heck do you do when Google becomes untenable, as will most certainly happen?

• Answering that question takes you to the "balancing direct response and brand" section of the document, FYI.
• "Balancing Direct Response and Brand" ... FYI, is a difficult proposition.
• By the end of the week, I'll share where that balance is happening ... in what I call Customer Media Marketing ... a shift away from endless variable costs that yield clicks ... a shift to something different.