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July 21, 2006

How "Failure" Leads to Success in Direct Response Radio Advertising

We've long championed the stance that one of the keys to success in direct response radio is testing. In the direct response arena, often that generic statement gets thrown around like it means something - the same way people throw around how important "communication" is to relationships. The phrase alone is virtually meaningless because in reality there are nuances that need to be understood in order to take actions that lead to success. If you think you know everything you need to know from that one phrase, you're in trouble.

When we say testing is important in direct response radio, we mean at the very least the following: a) a willingness to test, b) an ability to test, c) the possession of a well designed testing method, and d) the discipline to follow that well designed test to the point where enough data is produced so analysis and identification of insights can take place.

On July 10th, the Business Week cover story touched on the very topic of testing, but from an interestingly different perspective. Business Week approached what we call "the need for testing" from the perpective of "the need for failure". We have never thought of testing as involving failure, so we appreciate an alternate way of articulating a very important concept. As the article points out, there are cultural forces at work which necessitate varied approaches to understanding a concept so important to business. We encourage all to read this article because it has applications not only for direct response radio advertisers, but also across and within many different businesses. Here are a few soundbites that caught our eye.

"[Failure] is so important to the experimental process. That it is. Crucial, in fact. After all, that's why true, breakthrough innovation -- an imperative in today's globally competitive world, in which product cycles are shorter than ever -- is so extraordinarily hard. It requires well-honed organizations built for efficiency and speed to do what feels unnatural: Explore. Experiment. Foul up, sometimes. Then repeat."

Okay - we don't call it failure. We call it learning - but this is true. If we had a "hit" on the first try every time, there would be no need for testing. It would be called "printing money", not "testing", or even "advertising".

"...intelligent failures -- those that happen early and inexpensively and that contribute new insights about your customers -- should be more than just tolerable. They should be encouraged. Figuring out how to master this process of failing fast and failing cheap and fumbling toward success is probably the most important thing companies have to get good at."

Fascinating. This is EXACTLY how our testing methodology is built. We test early and inexpensively. The cost of learning (failure) is very inexpensive. We capture the results of that testing, we analyze it, and we feed the insights back into the campaign to fuel continuous improvement. This approach reduces cost and time to profitability, and continually refreshes the campaign.

"Through a postmortem process, the team that developed the campaign documented its insights."

Insights. We pound this drum continuously. These are the key to any campaign's longevity and they are only found on a consistent and cost-effective basis by diligently following a well designed testing methodology. Otherwise you're counting on getting lucky. Luck counts, but you don't want to count on it.

"It's only a failure if we fail to get the learning", says Intuit Chairman Scott Cook

This is really the bottom line. It's only a failure if it's viewed as a failure - if the insights are missed, if it's not used to improve the business in some manner. Yet it is sometimes very difficult for people to appreciate this perspective when they are immersed in a performanced-based, achievement-oriented, perfectionistic culture where anything that can be deemed a failure is intolerable.

"It's innovation's great paradox: Success - that is, true breakthroughs - usually comes through failure."

In direct response radio advertising, success - that is, true insights that lead to blockbuster hits - usually comes through testing.

Posted by Jeff Small & Brett Astor at 05:52 PM | Permalink