Creating the demand you collect

Ahh, the good old days. When AdWords were five cents a click and affiliate programs actually worked without 50% discounts. But the one thing about good old days: they never last. Eventually everyone discovered how to get traffic to their website and costs went up, Google got rich and customer attention became hard to come by. Back then there was more demand available than marketers investing and the hordes of visitors you could pull to your site were profitable on the first shot.

Now things are harder. But it seems that some things are getting lost in translation. I think part of this is because of who became digital marketers and who didn’t. A lot of the digital folks either came up through IT or through direct marketing. Not many came from brand marketing. So digital has always been focused on efficiently getting sales, possibly at the expense of brand growth. The past few years this has started to change, primarily with the big brand marketers. But it needs to change more.

The biggest problem, as I see it, with digital marketing is that it fails to distinguish between demand creation and demand harvesting. Demand creation is the act of actually making someone want your product. Demand harvesting is simply getting an order from someone who already wants it. These skill sets are inherently different and one is much, much harder than the other.

Going back to the early days, many retailers were able to harvest very efficiently. Paid search, SEO, affiliate and even retargeting are all about harvesting demand. Customers have to be looking for or searching for your product. Nike would make them want it, they would hit Google and search for it, and whomever delivered the best deal would get the click and the sale. Anyone can harvest and efficiency wins.

Generating demand is really hard. It requires TV commercials and catalogs mailed and other marketing techniques that interrupt the customer with a product and try to get them to buy it. Digitally speaking, banner ads were always the great white whale of digital demand generation. However, the corruption and absolute crap going on with banner ads have relegated them to a wasteland. I see people trying to generated demand through social (small, but can be effective) or YouTube online nowadays. There is still no great way online to generate demand at scale. And those with proprietary products can’t just harvest; they have to create demand.

So generating demand requires more skill, more work and more investment. Good PR can do it, if you’re small. TV is still the medium that does it well and big. Product placement is doing well online, but again it isn’t at scale. To create demand requires a big, great idea plus good execution in a channel that interrupts your target customer. And gets mass attention.

What I see these days is brands who have hit a wall in SEM and have declining results in other channels like Amazon (still requires demand already be present) or affiliate. The problem is that they are no longer creating demand; maybe they scaled back on catalog mailings or stopped those expensive TV ads or closed stores. Their online marketing loses effectiveness (or profitability) because it was simply collecting demand from the things that created demand. Now that that has stopped, there is less to collect.

What do you do in this situation? Find a way to create demand. It’s possible even on a limited budget. My favorite example is how Duluth Trading Company went from being a catalog company to a direct marketing company using TV ads. That’s the model you should look at (not Apple, not Amazon).

More to come on this.