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Case study: If you’ve got it, use it

Nothing is out of bounds in modern direct marketing: mobile phone, email, SMS, iPod and anywhere the advertising can get personal. Even talking toilets or scrolling messages on the seat. As companies demand tangible results from advertising, direct marketers are in the spotlight and the industry is under pressure to be innovative as an array of products competes for consumers’ attention. Trends are expected to centre on the growth of digital media, personalised advertising messages, investment in client information databases, text messaging and podcasting. The direct marketing sector covers advertising that is aimed at a select group of customers with a specific offer. This separates direct marketing from advertising that sells one message to a wide audience. Some of the biggest proponents of direct marketing are finance institutions, because pursuing a specific demographic can mean a reduction in credit risk and a greater chance of products being sold. The chief executive of the Australian Direct Marketing Association, Rob Edwards, says trends will include better application of digital and online media, more effective use of data to understand customers, and clever use of direct mail. ‘Australia is not as active in digital media because we don’t have it to the same extent as the United States’, he says. ‘People thought e-mail would spell the end of direct mail, and although the volume has come down, marketers are using clever mail pieces to get better response rates.’ Edwards gives the example of a finance institution including a product offer in a bank statement, which customers have to open. But he adds that exploitation of such tactics could put customers offside. The United States usually lead trends in direct marketing, and the chief marketing officer at Marsh Consumer & Commercial Practice in Washington DC, Don Neal, says there is a push for personalisation and immediacy. ‘In the US you can drive past McDonald’s and get an SMS message inviting you to have a shake. Cell phones and iPods are the mediums of the future; it comes down to mobility.’ As an example of future personalisation, Neal cites the movie Vanilla Sky, where billboards tailer advertising messages to people’s preferences. But that old stalwart, word-of-mouth marketing, remains important. Neal says a Harris Interactive poll showed 75% of consumers believed word-of-mouth to be the most influential marketing tool, compared with 26% for direct mail. ‘Word-of-mouth is a $US150-million industry and companies have formalised it as a legitimate marketing channel. Procter & Gamble have a division for it, called Tremor’, he says. ‘For example, a business will send 250 000 shampoo samples to girls to create buzz in high schools.’ Reaching influential consumers remains a big goal of direct marketers. Optus exceeded sales targets by 223% for a luxury phone when it promoted it to Qantas Chairman’s Lounge members. Recognising different customer segments and giving them something other than advertising can also foster loyalty. Neal says the US clothing store Gap has an e-mail campaign that divides its customers into nine characteristics, according to style, fashion and age. ‘They send e-mails with fashion advice people like to read, so it is information-driven, and sometimes they will include marketing or special offers.’

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says e-mail has the advantage of being cheap and it links consumers to a web site. everyone receives the same web page and puts in their details’. says more comprehensive client information is available using databases for direct mail. American Express Australia’s vice-president of acquisitions. Leanne Martin. particularly in the finance industry with issues like phishing. Adams says. Because credit card applications require written approval. The principal of the technology marketing company Ideagarden Consulting. in which consumers are encouraged to spread a message because of its novelty factor. We got coverage from BBC radio. The director of Innovative Solutions Oceania. Companies continue to experiment with online viral marketing. Luke Berry. The Sydney Festival in January also used SMS in direct marketing to lift response rates to outdoor advertising. which created the initiative. You pay a premium price and response rates are very low.’ But American Express is also using SMS. direct mail is still a core component of marketing for many companies. it received wide response. The sales and marketing manager at Mass Media. where all content is tailored to you. where all content is dynamic. A major growth area will be the continued integration of direct mail and online. says there is a niche market for alternative marketing mediums.’ The campaign ran for about a month. The head of direct marketing at M&C Saatchi. Nick Adams.’ Clever gimmicks can spread the message of direct marketers for a relatively low cost. Williams says an effective example of this was the movie Wedding Crashers. ‘I’ve seen scrolling messages on female toilet seats overseas. Jenny Williams. which had a web site where people could superimpose pictures of themselves and friends over the actors’ faces. clients can then text back their response instead of mailing a letter. says consumers only received requested information and were not bombarded with any further material. she says. Kimberlee Wells. Leon Young. and it’s about 80% with SMS’. The council’s community safety co-ordinator. compared with e-mail. After sending a letter.Despite new technology. she says. and the way you navigate a page will determine what you see next. the company calls clients and asks their permission to send a text message. it is widely used to get to existing customers. ‘The critical shift in the industry is “How do you create relevant and interesting material?”. says companies will increase experimentation and the use of personalised web pages. which people could send as an SMS and receive an e-mail reply with more information. says: ‘The gimmicky aspect attracted a lot of attention and anecdotally it got a lot of people talking about the issue. although the 2 . Posters included a keyword specific to an event. ‘There is a paucity of quality e-mail lists in Australia. ‘We were getting 50% return rates with fax and letter. ‘We will see direct mail push consumers online. When Manly Council in Sydney ran a campaign last year warning of drink spiking. Although spam legislation has limited the scope of e-mail as a tool in direct marketing. ‘If you have a creative idea it can spread far from a very small seed [e-mail] list’. rather than “How do we send this to as many people as possible?”’ Williams says advances in e-mail marketing are centred on companies’ ability to observe how people interact with their advertising: whether it is opened and which demographic groups respond to specific messages. using talking urinals in local pubs. ‘Now.

and not a lot of organisations are up to that.’ he says. use it’. because direct marketers have a seat at the table.’ As the technology available to direct marketers becomes more sophisticated. Edwards says. Jane 2006. but companies can take a few weeks to send a brochure.’ Future trends More investment in understanding potential consumers. Technology will enable direct advertisers to refine their campaign messages faster. Increased use of digital media. pp. and Procter& Gamble have said they won’t pay for anything they can’t measure. ANZ Banking Group sent out musical cards to advertise its home loans. SMS and multimedia messaging on mobile phones. ‘If you’ve got it.’ he says. ‘Digital TV might allow you to click and say “send more information”. and denim pockets to represent the money that consumers could save by using a financial planner. More creativity with direct mail. Source: Searle. leading to greater customer segmentation and more personalisation of advertising. They should get over it.’ Neal in Washington says direct marketers overcome an inferiority mentality. ‘But there is an image of direct marketing as guys in brown suits next to the Armani guys from big ad agencies. business will have to respond faster. although the volume may decrease. 58-9. ‘Clients expect instant fulfilment. BRW. 3 . It’s not for companies protective of their image. 2-8 March. ‘Companies want tangible results beyond impressions and general brand awareness. although Australian networks are not sufficiently established yet for this type of close-targeting advertising. For example.medium is best for products like condoms or alcoholic beverages.