June 23, 2008
Offline Still Driving Direct Marketing Campaigns
By Tom Ryan
According to a survey from the Direct Marketing Association, five out of the top six shares of direct marketing budgets go to offline media like direct mail, catalog, direct response TV and radio, events and telephone. E-mail was the only digital medium to break into the top five, coming in second with 11.3 percent of the budget.
The survey, entitled The Integrated Marketing Media Mix, found that 75.4 percent of campaigns used direct mail, generating 29 percent of the revenue. The leading medium was e-mail, which was used in 79.1 percent of campaigns and accounted for 21.6 percent of revenue generated.
“Even as marketers are bringing more digital media into their integrated campaigns, traditional media remain a core component of the marketing mix,” Yoram Wurmser, a research manager at DMA, said in a statement. “What we see in our research is that digital media ranging from the firmly established e-mail to the nascent mobile marketing channels are complementing, not replacing, direct mail, telephone, events and direct response broadcast advertisements.”
When asked about how their media mix had changed over the past three years,
75.8 percent of respondents said they are using more e-mail; 61.1 percent are
emphasizing more online video; and 62.9 percent included more search engine
marketing into their media buys.
Regarding future media usage, 81 percent projected an increase in e-mail
usage. Other digital media forecast to see higher use include: search engine
marketing, new media, campaign URL/PURLs, online video, banner/pop-up ads,
and mobile. But respondents also predicted a “steady use of offline media” as well.
Discussion Question: Which offline direct marketing media will become more valuable for retail and consumer brands in the future? Which will lose value?
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As online and offline media continue to evolve, so will the media mix used by direct marketers. One medium will not necessarily replace another. The key is to make the message relevant to consumers.
All media is getting fragmented into smaller segments. Consumers are demanding relevance as the means to be granted permission to speak with them. Direct marketers need to examine each message, as well as the way it is communicated. Highly relevant, valuable offers will get through to consumers. The rest will wind up in real or virtual trash bins.
In the past six weeks our so, our area has started to get hit with an “advertising only” paper. I guess that with the reduction in newspaper readers and rise in the postage costs, it has become economical for someone to drive around and toss the “Saturday Circular” to everyone in the area whether or not they subscribe to a paper.
Obviously this can’t work everywhere, but it points out the fact that to really get people’s attention takes more than a pop-up ad or email. I think electronic promotions are still too easily ignored. It is a fine line between “aggressive promotion” and being a pain in the butt. When companies use pop-ups or emails that are somehow deceptive in order to get our attention, they risk turning more people off than they attract.
I think that for consumer goods, direct marketing is best done offline and with subtle “product placement” in games and online video. While the offline ads can direct consumers to specific products, the online promotions can build brand awareness and affinity. If all the avatars in my social networking site are drinking a certain brand of soda, you can be sure I will give it a try.
If the FMI research is correct and 70% of all purchases are still decided at the retailer (I think it’s a little lower but not that much), then I agree with Lisa – why not engage consumers where they are. Plus, let’s add on a positive customer experience and really make the trip worthwhile.
Craig Apatov from Miller Zell has data that shows manufacturer budgets for in-store media will be as high as 15-20% by 2010 as consumers “filter” out the massive bombardment of messaging they receive every day in their lives.
But manufacturers beware – it’s not about brand anymore but category. Those who will succeed will increase both simultaneously, and that will be good for the consumer which is what we all ultimately want, right?
I still love the Saturday morning circulars! I feel this is the best way to convey hot prices, new products and special events. Radio ads that are entertaining and placed correctly are also very effective in getting a message across. Direct ad mail seems to be losing its share of the pie. Customers are completely swamped with ad pieces at the mail box; it mostly ends up in the recycle bin now. Keep those flyers coming!
At its best, direct marketing has always been about connecting one to one with a customer and targeting their needs. At its worst, direct marketing has been about sweepstakes packages destined to generate high gross response rates and low consumer satisfaction.
As everyone tries to move to more targeted relevant advertising direct marketing in all forms is well positioned to thrive IF the medium focuses on transparency and meeting real consumer needs as opposed to cheesy pitches and 1990s tactics.
Engaging customers where they are, having a message that progresses as their relationship with your brand progresses and having the analytics and intelligence to speak as if you know who your customer is and what they want will make next generation direct marketing successful…offline and online.
Based on my own experience working with companies from numerous industries, I believe that in many cases the medium that gets the lowest advertisers’ attention can often produce the greatest results.
Relating to this article, just look at how many ads you are exposed to through the web and email. Compare that to the number of ads in your mail box. Fewer ads get more attention.
Combine that with the fact that as much as we might like to believe we are an electronic media society, we still like to “hold the message.” We like to flip through brochures, read newsletters, and open envelopes.
I believe the most successful combination of online and offline advertising would be using postage based materials to direct readers to an online squeeze page.
The longer term viability to various direct offline channels is in direct correlation to each channel’s measurability in terms of effectiveness (response) and in targeted reach. The ultimate recipe is getting into the home with targeted relevance i.e. the right offer. Continued escalation of paper, printing and postage will get advertisers’ attention and will likely result in reduced expenditures favoring digital formats but a media mix is still the right approach.
Strides are being made even in broadcast to be even more targeted and measurable. Services are also emerging that make targeted broadcast affordable for smaller advertisers which should keep them in the mix. Bottom line…follow the channels that deliver response and efficient cost with meaningful scale.
Magazine and newspaper ads (for the public as well as the trade) are declining the most, both display and classified. They won’t disappear, but they’ll continue to decline. TV, direct mail, radio, billboards, movie trailers, etc. will all lose share but they’ll continue on and won’t decline as fast as magazines and newspapers. The biggest crisis: ads on the back of supermarket receipts. I see a lot of unsold space and a great threat to the American way of life.
According to PQ Media, spending on alternative media hit $73.43 billion in 2007, a 22% increase over the previous year, and will continue to surge. As reported on AdAge.com, the research firm forecasts a 20.2% increase over the next year, to a total of $88.24 billion, and a compounded annual growth rate of 17% for 2007-2012, reaching $160.82 billion. By then, alternative media will represent 26.6% of all advertising and marketing dollars.
According to The Future Exploration Network, the fastest-growing and largest segments of digital advertising over the next few years are forecast to be paid search, mobile, and video. However the pace of growth is expected to be solid across the board. They expect new segments of digital advertising to emerge, including personalized outdoor and in-building advertising, and advertising in virtual worlds. The domain of digital advertising will continue to expand. For example, newspapers delivered on e-paper will be a new forum for digital, personalized advertisements.
[from a recent issue of Growth Strategies (rogerselbert.com)]
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As online and offline media continue to evolve, so will the media mix used by direct marketers. One medium will not necessarily replace another. The key is to make the message relevant to consumers.
All media is getting fragmented into smaller segments. Consumers are demanding relevance as the means to be granted permission to speak with them. Direct marketers need to examine each message, as well as the way it is communicated. Highly relevant, valuable offers will get through to consumers. The rest will wind up in real or virtual trash bins.
In the past six weeks our so, our area has started to get hit with an “advertising only” paper. I guess that with the reduction in newspaper readers and rise in the postage costs, it has become economical for someone to drive around and toss the “Saturday Circular” to everyone in the area whether or not they subscribe to a paper.
Obviously this can’t work everywhere, but it points out the fact that to really get people’s attention takes more than a pop-up ad or email. I think electronic promotions are still too easily ignored. It is a fine line between “aggressive promotion” and being a pain in the butt. When companies use pop-ups or emails that are somehow deceptive in order to get our attention, they risk turning more people off than they attract.
I think that for consumer goods, direct marketing is best done offline and with subtle “product placement” in games and online video. While the offline ads can direct consumers to specific products, the online promotions can build brand awareness and affinity. If all the avatars in my social networking site are drinking a certain brand of soda, you can be sure I will give it a try.
If the FMI research is correct and 70% of all purchases are still decided at the retailer (I think it’s a little lower but not that much), then I agree with Lisa – why not engage consumers where they are. Plus, let’s add on a positive customer experience and really make the trip worthwhile.
Craig Apatov from Miller Zell has data that shows manufacturer budgets for in-store media will be as high as 15-20% by 2010 as consumers “filter” out the massive bombardment of messaging they receive every day in their lives.
But manufacturers beware – it’s not about brand anymore but category. Those who will succeed will increase both simultaneously, and that will be good for the consumer which is what we all ultimately want, right?
I still love the Saturday morning circulars! I feel this is the best way to convey hot prices, new products and special events. Radio ads that are entertaining and placed correctly are also very effective in getting a message across. Direct ad mail seems to be losing its share of the pie. Customers are completely swamped with ad pieces at the mail box; it mostly ends up in the recycle bin now. Keep those flyers coming!
At its best, direct marketing has always been about connecting one to one with a customer and targeting their needs. At its worst, direct marketing has been about sweepstakes packages destined to generate high gross response rates and low consumer satisfaction.
As everyone tries to move to more targeted relevant advertising direct marketing in all forms is well positioned to thrive IF the medium focuses on transparency and meeting real consumer needs as opposed to cheesy pitches and 1990s tactics.
Engaging customers where they are, having a message that progresses as their relationship with your brand progresses and having the analytics and intelligence to speak as if you know who your customer is and what they want will make next generation direct marketing successful…offline and online.
Based on my own experience working with companies from numerous industries, I believe that in many cases the medium that gets the lowest advertisers’ attention can often produce the greatest results.
Relating to this article, just look at how many ads you are exposed to through the web and email. Compare that to the number of ads in your mail box. Fewer ads get more attention.
Combine that with the fact that as much as we might like to believe we are an electronic media society, we still like to “hold the message.” We like to flip through brochures, read newsletters, and open envelopes.
I believe the most successful combination of online and offline advertising would be using postage based materials to direct readers to an online squeeze page.
The longer term viability to various direct offline channels is in direct correlation to each channel’s measurability in terms of effectiveness (response) and in targeted reach. The ultimate recipe is getting into the home with targeted relevance i.e. the right offer. Continued escalation of paper, printing and postage will get advertisers’ attention and will likely result in reduced expenditures favoring digital formats but a media mix is still the right approach.
Strides are being made even in broadcast to be even more targeted and measurable. Services are also emerging that make targeted broadcast affordable for smaller advertisers which should keep them in the mix. Bottom line…follow the channels that deliver response and efficient cost with meaningful scale.
Magazine and newspaper ads (for the public as well as the trade) are declining the most, both display and classified. They won’t disappear, but they’ll continue to decline. TV, direct mail, radio, billboards, movie trailers, etc. will all lose share but they’ll continue on and won’t decline as fast as magazines and newspapers. The biggest crisis: ads on the back of supermarket receipts. I see a lot of unsold space and a great threat to the American way of life.
According to PQ Media, spending on alternative media hit $73.43 billion in 2007, a 22% increase over the previous year, and will continue to surge. As reported on AdAge.com, the research firm forecasts a 20.2% increase over the next year, to a total of $88.24 billion, and a compounded annual growth rate of 17% for 2007-2012, reaching $160.82 billion. By then, alternative media will represent 26.6% of all advertising and marketing dollars.
According to The Future Exploration Network, the fastest-growing and largest segments of digital advertising over the next few years are forecast to be paid search, mobile, and video. However the pace of growth is expected to be solid across the board. They expect new segments of digital advertising to emerge, including personalized outdoor and in-building advertising, and advertising in virtual worlds. The domain of digital advertising will continue to expand. For example, newspapers delivered on e-paper will be a new forum for digital, personalized advertisements.
[from a recent issue of Growth Strategies (rogerselbert.com)]