Outdoor Advertising Goes 3-D

Chapter 14
Direct Marketing

DIRECT MARKETING
A system of marketing by which organizations
communicate directly with target customers
to generate a response.
 Growth of Direct Marketing
• Consumer credit cards (more than 1B cards)
• Direct Marketing Syndicates
• Changing structure of American society and
the market.
• Technology advances.
• More sophisticated marketing techniques.
• Industry’s improved image.
 Objectives of Direct marketing
• Sales
• Test Drives
• Votes
• Contributions
• Behavioral response

.5% to 3% response rate …. Good = 2%

* rates up slightly in current economy (coupons, sales, etc)
 Forms of Direct Marketing
• Direct Mail $34.8M
• Catalog Direct Mail $21.0M
• Telephone Marketing $46.2M
• Internet Marketing (non Email) $19.6M
• Commercial E-Mail $.5M
• Direct Response Newspaper $12.9M
• Direct Response Television $22.6M
• Direct Response Magazine $8.8M
• Direct Response Radio $5.1M
• Insert Media $1.0M
Porsche Targets Prospects with Direct Mail
Success with Catalogs
A Direct Response Print Ad
 Direct Marketing Strategies

One-Step Two-Step

• The medium is used directly to • May use one medium to obtain

obtain an order inquiry and qualify prospect
• Often use 800 number phone • Typically follow up with a
orders , and credit card payment second medium to complete
the sale
 Direct Mail Consumer Database
• Name Education
• Address/Zip Code Income
• Telephone Area Code Occupation
• Length of residence Transaction history
• Age
Unique identifier
• Gender
Home Value
• Marital status
Year home built
• Family data
• Dwelling Type
 What does Direct Mail cost?
• Mailing list - $20 to $300 per 1,000
– ($.02 to $.30 each)
– Larger quantity… lower price
– More demographic “wash) … higher price.

• Printing & Mailing - $.60 to $1.00 per item.

• Renting vs Buying list.

• Bad leads
How to determine the cost of a direct
mail campaign
• What amount in your marketing budget is designated for direct
mail.
• Determine your target audience. This will help decide the number
of leads to buy and how the list is “washed”.
• You will need to design and write the direct mail piece. If done in
house will save a substantial cost.
• Art or photography needs to be provided or created. If this is not
done in house, the cost of the campaign will go up.
• Printing is a significant cost in direct mail. Ask the printing company
to provide postage and fulfillment too. If this option is not available
– individual quotes will be needed for printing, postage &
fulfillment.
• Get an estimate for the above items. If over budget, the list can be
narrowed down.
 Direct Mail Campaign
• Develop your mailing list.

• Create a mailing piece.

• Code your response vehicle.

• Test the campaign.

• Run the campaign

• Handle customer responses*

• Analyze the results

 Creating the Mailing Piece
• 40% of the impact comes from sending it to
the proper target market.

• 40% of the impact comes from the value of

the offer.

• 20% comes from the design or writing of the

piece.
 Direct Selling
• Salesperson visits the buyers home or other
location to sell product or service.

• Avon, Mary Kay, Amway, Shaklee, Arbon,

Zapata, Tupperware, etc.
Cutco Knives Employs Direct Selling
 Direct Marketing
Advantages Disadvantages
• Selective reach • Image factors
• Segmentation capabilities • Accuracy
• Frequency • Content Support
• Flexibility • Rising costs
• Timing
• Do not contact lists
• Personalization
• Costs
• Measures of effectiveness
 Chapter 15
The Internet & Interactive Media
• Internet
– Started on September 2, 1969
– From 1993 to 2001, over 50% of the US homes
were wired to the Internet.
– 2008: 74% of North American households are
connected to the internet.
– First advertisement on the Web on HotWired in
1994.
 Internet Marketing Objectives
• Create Awareness.
• Generate Interest.
• Disseminate Information.
• Create an Image.
• Create a Strong Brand.
• Stimulate Trial.
• Create Buzz.
• Gain Consideration.
• Sales
The Web Site
Using Web Sites to Build Image
Sales Promotions on Web Sites
 E-Commerce
• $402B in the direct selling of goods over the
internet.

• Expected to continue to grow.

Ebay is a Popular E-Commerce Site
 Types of Advertising on the Internet
• Banners – most common form.
• Sponsorships – pays to sponsor a section of a site.
• Pop Ups
• Push Technologies – webcasting – send a message
rather than waiting for the consumer to find it.
• Links
• Paid Search
• Contextual Ads – ads target based on content of site
• Rich Media – sports clips, videos, etc.
Typical Banner Ads
 2009 Which Advertising Worked Best

• Email 39.4%
• Search 23.6%
• Display 7.1%
• Direct Mail 6.3%
• Social Media 4.7%
• Mobile .8%
Successful Electronic Email Campaigns
• What to Say:
– Be casual
• Treat your customers as equals
• Imagine talking to a friend
– Get personal
• Let your customers get to know you.
• Include using personal stories where appropriate.
– Get your emails open with the right subject line
• Put yourself in your customers shoes & ask what would get
me to open the email.
• Don’t use words like “free” (junk mail).
– Spy on your competition
• Try to think about what competitors aren’t providing.
• Go to their websites and look for ideas (don’t replicate).
 Which of the following marketing tactics will be part
of your 2010 online marketing strategy?

• Improved targeting 77.6%

• Loyalty campaigns 63.2%

• Measurement 71.2%

• Win back customers 38.4%

• Content creation 54.4%

• Awareness campaigns 48.6%

• Email list growth 63.2%

 2009 – Ten most popular strategies to maximize their
digital mix.
• Use email marketing newsletters to announce new Linkedin, Facebook or
Twitter feeds, directing readers to social networking websites for sign up.
• Use Twitter to link followers to your latest blog post.
• Include an option to join the company’s social networks in the email-
newsletter registration section.
• Use the sidebar on your email-marketing newsletter to list all company
social networking profiles.
• Invite customers to participate in YouTube viral-marketing video contests.
• Read & respond to comments with social networks or blog articles.
• Include a link to your help forum or YouTube video tutorial within
purchase confirmation emails.
• Launch a regular Q & A section in your company’s email newsletter.
• Include a social-bookmark console on product pages in case readers want
to share your website.
• Join relevant Linkedln and Facebook groups, assigning a knowledgeable
representatives to answer questions.
 Mobile Media Usage 2009
Mobile Email News/ Any Social
Media Info App Networking
Browser

Apple 94% 87% 80% 83% 58%

Android 92% 63% 80% 82% 52%

Smartphone 80% 70% 65% 59% 43%

Non Smartphone26% 12% 14% 13% 8%

Twitter Growth (% month over month)
Over 50 Million Tweets a Day
Additional Internet Advertising Forms

Podcasting, RS syndication, Blogs, Streaming

 Internet Marketing
Advantages Disadvantages
• Target Marketing • Measurement problems
• Message Tailoring • Annoyance
• Interactive capabilities • Clutter
• Information access • Potential for deception
• Sales potential
• Privacy
• Creativity
• Poor reach
• Exposure
• Irritation
• Speed

• Complement to IMC