Direct Marketing

Direct marketing is a channel-agnostic form of Text messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional letters, and outdoor advertising.

Direct marketing messages emphasize a focus on the customer, data, and accountability. Characteristics that distinguish direct marketing are:

  1. Marketing messages are addressed directly to the customer and/or customers. Direct marketing relies on being able to address the members of a target market. Addressability comes in a variety of forms including email addresses, mobile phone numbers, Web browser cookies, fax numbers and United States and international postal addresses.
  2. Direct marketing seeks to drive a specific “call to action.” For example, an advertisement may ask the prospect to call a free phone number or click on a link to a website.
  3. Direct marketing emphasizes trackable, measurable responses from customers — regardless of medium.

Direct marketing is practiced by businesses of all sizes — from the smallest start-up to the leaders on the Fortune 500. A well-executed direct advertising campaign can prove a positive return on investment by showing how many potential customers responded to a clear call-to-action. General advertising eschews calls-for-action in favor of messages that try to build prospects’ emotional awareness or engagement with a brand. Even well-designed general advertisements rarely can prove their impact on the organization’s bottom line.

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[edit] Popularity of Direct Advertising

A recent study [1] by the Direct Marketing Association reports that in 2010, marketers – commercial and nonprofit – spent $153.3 billion on direct marketing, which accounted for 54.2% of all ad expenditures in the United States. Measured against total US sales, these advertising expenditures generated approximately $1.798 trillion in incremental sales. In 2010, direct marketing accounted for 8.3% of total US gross domestic product. Also in 2010, there were 1.4 million direct marketing employees in the US. Their collective sales efforts directly supported 8.4 million other jobs, accounting for a total of 9.8 million US jobs.

[edit] History

Mail order pioneer Aaron Montgomery Ward knew that by using the technique of selling products directly to the customer at appealing prices could, if executed effectively and efficiently, revolutionize the market industry and therefore be used as an innovative model for marketing products and creating customer loyalty.[2] The term “direct marketing” was coined long after Montgomery Ward’s time.

In 1967, [3]

In 1872, [5]

[edit] Benefits

Direct marketing is attractive to many advertising uses indirect measurements, such as awareness or engagement, since there is no direct response from a consumer.

Measurement of results is a fundamental element in successful direct marketing. The Internet has made it easier for marketing managers to measure the results of a campaign. This is often achieved by using a specific website landing page directly relating to the promotional material. A call to action will ask the customer to visit the landing page, and the effectiveness of the campaign can be measured by taking the number of promotional messages distributed (e.g., 1,000) and dividing it by the number of responses (people visiting the unique website page). Another way to measure the results is to compare the projected sales or generated leads for a given term with the actual sales or leads after a direct advertising campaign.

[edit] Challenges and Solutions

While many marketers recognize the financial benefits of increasing targeted awareness, some direct marketing efforts using particular media have been criticized for generating poor quality leads, either due to poor message strategy or because of poorly compiled demographic databases. This poses a problem for marketers and consumers alike, as advertisers do not wish to waste money on communicating with consumers not interested in their products.

Some of these concerns have been addressed by direct marketers by the use of individual “opt-out” lists, variable printing, and better-targeted list practices. Additionally, in order to avoid unwanted mailings, members of the marketing industry have established preference services that give customers more control over the marketing communications they receive in the mail.

The term “junk mail,” referring to unsolicited commercial ads delivered via post office or directly deposited in consumers’ mail boxes, can be traced back to 1954.UseNet that the repetitions effectively drowned out the normal flow of conversation.

To address the concerns of unwanted emails or [9] as legitimate email marketing can possess the same hallmarks as spam. There are a range of email service providers that provide services for legitimate opt-in emailers to avoid being classified as spam.

Consumers have expressed concerns about the privacy and environmental implications of direct marketing. In response to consumer demand and increasing business pressure to increase the effectiveness of reaching the right customer with direct marketing, companies specialize in targeted direct advertising to great effect, reducing advertising budget waste and increasing the effectiveness of delivering a marketing message with better geo-demography information, delivering the advertising message to only the customers interested in the product, service, or event on offer. Additionally, members of the advertising industry have been working to adopt stricter codes regarding online targeted advertising.[10]

[edit] Direct Marketing Channels

Any medium that can be used to deliver a communication to a customer can be employed in direct marketing, including:

[edit] Email Marketing

Sending marketing messages through email or citation needed] One reason for email marketing’s popularity is that it is relatively inexpensive to design, test, and send an email message. It also allows marketers to deliver messages around the clock, and to accurately measure responses.

[edit] Online Tools

With the expansion of digital technology and tools, direct marketing is increasingly taking place through online channels. Most online advertising is delivered to a focused group of customers and has a trackable response.

  • Display Ads are interactive ads that appear on the Web next to content on Web pages or Web services. Formats include static banners, pop ups, videos, and floating units. Customers can click on the ad to respond directly to the message or to find more detailed information. According to research by eMarketer, expenditures on online display ads rose 24.5% between 2010 and 2011.[11]
  • Search: 49% of US spending on Internet ads goes to search, in which advertisers pay for prominent placement among listings in search engines whenever a potential customer enters a relevant search term, allowing ads to be delivered to customers based upon their already-indicated search criteria.[12] This paid placement industry generates more than $10 billion dollars for search companies. Marketers also use search engine optimization to drive traffic to their sites.
  • Social Media Sites, such as Facebook and Twitter, also provide opportunities for direct marketers to communicate directly with customers by creating content to which customers can respond.

[edit] Mobile

Through mobile marketing, marketers engage with prospective customers and donors in an interactive manner through a mobile device or network, such as a cellphone, smartphone, or tablet. Types of mobile marketing messages include: SMS: (short message service) — marketing communications are sent in the form of text messages, also known as texting. MMS: (multi-media message service) — These messages use elements such as images, video, and audio; Mobile Applications: Smartphone-based mobile apps contain several types of messages. Rich Push Notifications are full HTML Push Notifications. Mobile apps also contain Interactive ads that appear inside the mobile application or app; Location-Based Marketing: marketing messages delivered directly to a mobile device based on the user’s location; QR Codes (quick-response barcodes): This is a type of 2D barcode with an encoded link that can be accessed from a smartphone. This technology is increasingly being used for everything from special offers to product information. Mobile Banner Ads: Like standard banner ads for desktop Web pages but smaller to fit on mobile screens and run on the mobile content network

[edit] Direct Mail

The term “direct mail” is used to refer to communications sent to potential customers or donors via the postal service and other delivery services. Direct mail is sent to customers based on criteria such as age, income, location, profession, buying pattern, etc.

Direct mail includes advertising circulars, catalogs, free-trial CDs, pre-approved credit card applications, and other unsolicited merchandising invitations delivered by mail to homes and businesses. Bulk mailings are a particularly popular method of promotion for businesses operating in the financial services, home computer, and travel and tourism industries.

In many developed countries, direct mail represents such a significant amount of the total volume of mail that special rate classes have been established. In the United States and United Kingdom, for example, there are bulk mail rates that enable marketers to send mail at rates that are substantially lower than regular first-class rates. In order to qualify for these rates, marketers must format and sort the mail in particular ways – which reduces the handling (and therefore costs) required by the postal service. In the US, marketers send over 90 billion pieces of direct mail per year [13]

Advertisers often refine direct mail practices into targeted mailing, in which mail is sent out following United States Postal Service calls this form of mail “advertising mail” (admail for short).

[edit] Telemarketing

Another common form of direct marketing is telemarketing, in which marketers contact customers by phone. The primary benefit to businesses is increased lead generation, which helps businesses increase sales volume and customer base. The most successful telemarketing service providers focus on generating more “qualified” leads that have a higher probability of getting converted into actual sales.

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New Zealand Name Removal Service.

[edit] Voicemail Marketing

Voicemail marketing emerged out of the market prevalence of personal voice mailboxes, and business voicemail systems. Voicemail marketing presented a cost effective means by which to reach people directly, by voice. Abuse of consumer marketing applications of voicemail marketing resulted in an abundance of “voice-spam,” and prompted many jurisdictions to pass laws regulating consumer voicemail marketing. More recently, businesses have utilized guided voicemail (an application where pre-recorded voicemails are guided by live callers) to accomplish personalized business-to-business marketing formerly reserved for telemarketing. Because guided voicemail is used to contact only businesses, it is exempt from Do Not Call regulations in place for other forms of voicemail marketing. Voicemail courier is a similar form of voicemail marketing with both business-to-business and business-to-consumer applications.

[edit] Broadcast Faxing

Broadcast faxing, in which faxes are sent to multiple recipients, is now less common than in the past.[citation needed] This is partly due to laws in the United States and elsewhere which regulate its use for consumer marketing. In 2005, President Bush signed into law S. 714, the Junk Fax Prevention Act of 2005 (JFPA), which allows marketers to send commercial faxes to those with whom they have an established business relationship (EBR), but imposes some new requirements. These requirements include providing an opt-out notice on the first page of faxes and establishing a system to accept opt-outs at any time of the day. Fax senders must begin complying with these new requirements, which are described in this fact sheet. Roughly 2% of direct marketers use fax, mostly for business-to-business marketing campaigns.[16] Also, due to the popularity of a variety of digital communication methods, the overall use of faxes is less than in the past.

[edit] Couponing

Couponing is used in print and digital media to elicit a response from the reader. An example is a coupon which the reader receives through the mail and takes to a store’s check-out counter to receive a discount.

Digital Coupons: Manufacturers and retailers make coupons available online for electronic orders that can be downloaded and printed. Digital coupons are available on company websites, social media outlets, texts, and email alerts. There are an increasing number of mobile phone applications offering digital coupons for direct use.

Daily Deal Sites offer local and online deals each day, and are becoming increasingly popular. Customers sign up to receive notice of discounts and offers, which are sent daily by email. Purchases are often made using a special coupon code or promotional code. The largest of these sites, Groupon, has over 83 million subscribers.[17]

[edit] Direct Response TV

Direct marketing via television (commonly referred to as DRTV) has two basic forms: long form (usually half-hour or hour-long segments that explain a product in detail and are commonly referred to as infomercials) and short form, which refers to typical 30-second or 60-second commercials that ask viewers for an immediate response (typically to call a phone number on screen or go to a website). TV-response marketing — i.e. Ginsu Knives by Ginsu Products, Inc. of RI. Several aspects of ad, such as its use of adding items to the offer and the guarantee of satisfaction were much copied, and came to be considered part of the formula for success with short-form direct-response TV ads (DRTV)

[edit] Direct Response Radio

In direct response radio, ads contain a call to action with a specific tracking mechanism. Often, this tracking mechanism is a “call now” prompt with a toll-free phone number or a unique Web URL. Results of the ad can be tracked in terms of calls, orders, customers, leads, sales, revenue, and profits that result from the airing of those ads.

[edit] Insert Media

Another form of direct marketing, insert media are marketing materials that are inserted into other communications, such as a catalog, newspaper, magazine, package, or bill. Coop or shared mail, where marketing offers from several companies are delivered via a single envelope, is also considered insert media.

[edit] Out-of-Home

Out of home direct marketing refers to a wide array of media designed to reach the consumer outside the home, including transit, bus shelters, bus benches, aerials, airports, in-flight, in-store, movies, college campus/high schools, hotels, shopping malls, sport facilities, stadiums, taxis — that contain a call-to-action for the customer to respond.

[edit] Direct Response Magazines and Newspapers

Magazine and newspaper ads often include a direct response call-to-action, such as a toll-free number, a coupon redeemable at a brick-and-mortar store, or a QR code that can be scanned by a mobile device — these methods are all forms of direct marketing, because they elicit a direct and measurable action from the customer.

[edit] Direct Selling

Direct selling is the sale of products by face-to-face contact with the customer, either by having salespeople approach potential customers in person, or through indirect means such as Tupperware parties.

[edit] Grassroots/Community Marketing

The door-to-door distribution of flyers and leaflets within a local community is a business-to-consumer form of direct marketing used extensively by restaurants, fast food companies, and many other business focusing on a local catchment. Similar to direct mail marketing, this method is targeted purely by area and community, and costs a fraction of the amount of a mailshot, since it is not necessary to purchase stamps, envelopes, or address lists with the names of home occupants.

[edit] See also

[edit] References

  1. ^ The Power of Direct Marketing: ROI, Sales, Expenditures, and Employment in the US, 2009-2010 Edition
  2. ^ c Brandweek 50,no.36.D1-D4 “The Next Generation of DIRECT MARKETING.” Academic Search Complete, EBSCOhost, 2009,p.6.
  3. ^ Marketing Legend Lester Wunderman Live on ‘The Alan Levy Show’
  4. 978-0-324-56862-2.
  5. ^ Postal Service OPERATIONS
  6. ^ Entry for junk, Online Etymology Dictionary. Retrieved February 19, 2008.
  7. ^ Origin of the term “spam” to mean net abuse, Brad Templeton’s website. Retrieved February 19, 2008.
  8. ^ FCC: Spam, Unwanted Text Messages and Email
  9. ^ What is a “Whitelist” and why do I want to work with a “Whitelisted” Mail Distributor?
  10. ^ Advertising Age – More Advertisers Adopt Stricter Codes Around Digital Privacy
  11. ^ eMarketer Press Release, June 2011
  12. ^ DMA 2011 Statistical Fact Book, Chapter 4
  13. ^ DMA 2011 Statistical Fact Book, Chapter 2, page 46
  14. ^ Telemarketing Sales Rule
  15. ^ FTC Consumer Alert – Q&A: The National Do Not Call Registry
  16. ^ DMA 2010 Response Rate Report
  17. ^ New York Times Article, June 2 2011 – Groupon Plans I.P.O. With $30 Billion Valuation



This article uses material from the Wikipedia article Direct Marketing, which is released under the Creative Commons Attribution-Share-Alike License 3.0.

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