Late last week, I was fortunate enough to be in the lobbies of each of these four institutions:  Harvard Business Review, The Salvation Army, Dana-Farber Cancer Institute and Liberty Medical.  Each is a stalwart business and their missions smack you in the face when you walk in the door.  In their lobbies, I could feel the energy.  Better said, lobbies are where the brand meets the customer, real and prospective.  These four are amongst the most successful brand direct marketers in their categories because they intuitively and actively drive growth through discipline and iteration.  But, more, they believe that brand direct marketing is the ‘Engine that Could’ (and does): it drives and shapes perception based on how people respond and buy.  Offers, creative, pricing, terms, messaging evolve as performance reveals.  Brand awareness and a brand’s performance are directly connected.

With a tough economy, consumer evaluation of value and choice is ruthless and no one’s rushing their decisions.  Advertisers have rightfully tightened their spending, including in their search programs.  Net income and cash flow are the priorities and search has become the profit workhorse.  Cookie-length conversations came back into vogue earlier in the year since many marketers chose to tighten them for fear of over-spending.  But, scale is always the challenge.  PM Digital’s President, Suzy Sandberg, acknowledged the same in her blog post last week.

An unrecognized side effect of the squeeze on spending is that the percentage of unsourced and unknown customers has gone up at the same time.  So, the unintended problem is wrestling with how to allocate revenue sources — and that upsets the allocation apple cart all over again, circa 2006.  We all knew it wasn’t completely right or fixed, but we’re going to be hammering at this, again.  It’s coming.  Bad economies do that.  More channels do that, too.

Although the Main Street economy is still very unsettled with a near 10% unemployment rate, there are healthy signs that consumers are creeping back into buying mode.  But, brands need to air out and be given room to evolve outside of their ironclad, short-term ROI requirements or we will severely cut into next year’s growth prospects.  This is not a problem for two to three years down the road.  It is 2010’s biggest problem.  Without at least replacing the attrition of customers not buying, we’ll be looking to average value and margins to make up the loss.  It won’t fill the gap.

Nothing replenishes a growth business like new or re-activated customers.  Cookie lengths need expansion.  Brand+ and brand-assist keywords need more time for consumers to establish their new buying behaviors, and we don’t know enough about what’s going to be different.  For sure, though, buying is simply going to take longer.

ROI requires return and investment.  Return requires revenue.  Investment requires disciplined testing and expansion.  ROI is starving.  Brands need air (longer evaluation and incremental spend, combined) and disciplined evolution.  It’s time, again, to use both to grow.

Chris Paradysz is CEO of PM Digital.