A significant event in the history of direct response advertising transpired in late October. Wal-Mart, the world’s largest retailer with a $580 million ad budget, selected a direct response media buying agency to help it overcome slowing sales growth. People in our industry would classify the winning agency, Draft FCB, as a branded direct response agency, but nevertheless, it is a direct marketing agency. It beat out some of the largest traditional ad agencies in the world to secure the coveted Wal-Mart account, according to a October 26 Wall Street Journal (WSJ) article. Although other big marketers like Microsoft and P&G have used direct response advertising for certain brands, I can’t recall a company the size of Wal-Mart selecting a direct marketing agency as its lead agency.
Major marketers have seen the type of accountability and customization that Internet advertising can provide, and now they are looking to more accurately measure their return from their offline advertising. Savvy media buying executives are finally realizing direct response advertising can provide them with a way to measure the ROI from their advertising expenditures.
With the tenure of CMOs averaging about two years, media buyers are under the gun to deliver results. Wal-Mart recently recruited senior marketing experts from top consumer products companies, such as PepsiCo, Target and DaimlerChrysler, to help overhaul its marketing efforts. Based on their selection of a direct marketing agency for Wal-Mart, these marketers clearly understand the power of direct response advertising.