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Direct marketing

Marketing
Key concepts

Product â€’ Pricing
Distribution â€’ Service â€’ Retail
Brand management
Account-based marketing
Marketing ethics
Marketing effectiveness
Market research
Market segmentation
Marketing strategy
Marketing management
Market dominance
Marketing process outsourcing

Promotional content

Advertising â€’ Branding â€’ Underwriting
Direct marketing â€’ Personal Sales
Product placement â€’ Publicity
Sales promotion â€’ Sex in advertising

Promotional media

Printing â€’ Publication â€’ Broadcasting
Out-of-home â€’ Internet marketing
Point of sale â€’ Promotional items
Digital marketing â€’ In-game
In-store demonstration â€’ Brand Ambassador
Word of mouth â€’ Drip Marketing

Direct marketing is a form of advertising that reaches its audience without using traditional formal channels of advertising, such as TV, newspapers or radio. Businesses communicate straight to the consumer with advertising techniques such as fliers, catalogue distribution, promotional letters, and street advertising.

Direct Advertising is a sub-discipline and type of marketing. There are two main definitional characteristics which distinguish it from other types of marketing. The first is that it sends its message directly to consumers, without the use of intervening commercial communication media. The second characteristic is the core principle of successful Advertising driving a specific "call to action." This aspect of direct marketing involves an emphasis on trackable, measurable, positive responses from consumers (known simply as "response" in the industry) regardless of medium.

If the advertisement asks the prospect to take a specific action, for instance call a free phone number or visit a Web site, then the effort is considered to be direct response advertising.

Direct marketing is predominantly used by small to medium-size enterprises with limited advertising budgets that do not have a well-recognized brand message. A well-executed direct advertising campaign can offer a positive return on investment as the message is not hidden with overcomplicated branding. Instead, direct advertising is straight to the point; offers a product, service, or event; and explains how to get the offered product, service, or event.

Contents

[edit] History

The term direct marketing is believed to have been first used in 1967 in a speech by Lester Wunderman, who pioneered direct marketing techniques with brands such as American Express and Columbia Records.[citation needed] 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.[1] The term spam, meaning "unsolicited commercial e-mail," can be traced back to March 31, 1993,[2] although in its first few months it merely referred to inadvertently posting a message so many times on UseNet that the repetitions effectively drowned out the normal flow of conversation.

Although Wunderman may have been the first to use the term direct marketing, the practice of mail order selling (direct marketing via mail) essentially began in the U.S. upon invention of the typewriter in 1867.[citation needed]

The first modern mail-order catalog was produced by Aaron Montgomery Ward in 1872.[citation needed] The Direct Mail Advertising Association, predecessor of the present-day Direct Marketing Association, was first established in 1917.[3] Third class bulk mail postage rates were established in 1928.[citation needed]

Direct marketing's history in Europe can be traced to the 15th century. Upon Gutenberg's invention of movable type, the first trade catalogs from printer-publishers appeared sometime around 1450.[citation needed]

[edit] Benefits and drawbacks

Direct marketing is attractive to many marketers, because in many cases its positive effect (but not negative results) can be measured directly. For example, if a marketer sends out 1,000 solicitations by mail, and 100 respond to the promotion, the marketer can say with confidence that campaign led directly to 10% direct responses. The number of recipients who are offended by junk mail/spam, however, is not easily measured. By contrast, measurement of other media must often be indirect, since there is no direct response from a consumer. Measurement of results, a fundamental element in successful direct marketing, is explored in greater detail elsewhere in this article.

The Internet has made it easier for marketing managers to measure the results of a campaign. This is often achieved by using a specific Web site landing page directly relating to the promotional material, a call to action will ask the consumer 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 Web site page).

Another way to measure the results is to compare the projected sales for a given term with the actual sales after a direct advertising campaign.

While many marketers recognize the financial benefits of increasing targeted awareness, some direct marketing efforts using particular media have been criticized for generating unwanted solicitations, not due to the method of communication but because of poorly compiled demographic databases, advertisers do not wish to waste money on communicating with consumers not interested in their products. For example, direct mail that is irrelevant to the recipient is considered "junk mail," and unwanted e-mail messages are considered "spam." Some consumers are demanding an end to direct marketing for privacy and environmental reasons,[citation needed] which direct marketers are able to do to some extent by using "opt-out" lists, variable printing, and more-targeted mailing lists. In response to consumer demand and increasing business pressure to increase the effectiveness of reaching the right consumer with direct marketing, companies such as Ireland Advertising specialize in targeted direct advertising to great effect, reducing advertising budget waste and increasing the effectiveness of delivering a marketing message with better geodemography information, delivering the advertising message to only the consumers interested in the product, service, or event on offer.

[edit] Channels

[edit] Direct mail

The most common form of direct marketing is direct mail,[citation needed] sometimes called junk mail, used by advertisers who send paper mail to all postal customers in an area or to all customers on a list.

Junkmail

Any low-budget medium that can be used to deliver a communication to a customer can be employed in direct marketing. Probably the most commonly used medium for direct marketing is mail, in which marketing communications are sent to customers using the postal service. The term direct mail is used in the direct marketing industry to refer to communication deliveries by the Post Office, which may also be referred to as "junk mail" or "admail" or "crap mail" and may involve bulk mail.

Junk mail includes advertising circulars, catalogs, free trial CDs, pre-approved credit card applications, and other unsolicited merchandising invitations delivered by mail or to homes and businesses, or delivered to consumers' mailboxes by delivery services other than the Post Office. 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.

Advertisers often refine direct mail practices into targeted mailing, in which mail is sent out following database analysis to select recipients considered most likely to respond positively. For example a person who has demonstrated an interest in golf may receive direct mail for golf related products or perhaps for goods and services that are appropriate for golfers. This use of database analysis is a type of database marketing. The United States Postal Service calls this form of mail "advertising mail" (admail for short).

[edit] Telemarketing

The second most common form of direct marketing is telemarketing,[citation needed] in which marketers contact consumers by phone. The unpopularity of cold call telemarketing (in which the consumer does not expect or invite the sales call) has led some US states and the US federal government to create "no-call lists" and legislation including heavy fines. This process may be outsourced to specialist call centres.

In the US, a national do-not-call list went into effect on October 1, 2003. Under the law, it is illegal for telemarketers to call anyone who has registered themselves on the list. After the list had operated for one year, over 62 million people had signed up.[4] The telemarketing industry opposed the creation of the list, but most telemarketers have complied with the law and refrained from calling people who are on the list.[citation needed] (The list does not apply to non-profit organizations.)

Canada has passed legislation to create a similar Do Not Call List. In other countries it is voluntary, such as the New Zealand Name Removal Service.

[edit] Email Marketing

Email Marketing is a third type of direct marketing. A major concern is spam, which actually predates legitimate email marketing.[citation needed] As a result of the proliferation of mass spamming, ISPs and email service providers have developed increasingly effective E-Mail Filtering programs. These filters can interfere with the delivery of email marketing campaigns, even if the person has subscribed to receive them,[5] as legitimate email marketing can possess the same hallmarks as spam. There are a range of e-mail service providers that provide services for legitimate opt-in emailers to avoid being classified as spam.

[edit] Door-to-Door Leaflet Marketing

Leaflet distribution services are used extensively by the fast food industries, and many other business focussing on a local catchment Business to consumer business model, similar to direct mail marketing, this method is targeted purely by area, and costs a fraction of the amount of a mailshot due to not having to purchase stamps, envelopes or having to buy address lists and the names of home occupants.

[edit] Broadcast faxing

A fourth type of direct marketing, broadcast faxing, is now less common than the other forms.[citation needed] This is partly due to laws in the United States and elsewhere which make it illegal.[citation needed]

[edit] Voicemail Marketing

A fifth type of direct marketing has emerged out of the market prevalence of personal voice mailboxes, and business voicemail systems. Due to the ubiquity of email marketing, and the expense of direct mail and telemarketing, 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.

[edit] Couponing

Couponing is used in print media to elicit a response from the reader. An example is a coupon which the reader cuts out and presents to a super-store check-out counter to avail of a discount. Coupons in newspapers and magazines cannot be considered direct marketing, since the marketer incurs the cost of supporting a third-party medium (the newspaper or magazine); direct marketing aims to circumvent that balance, paring the costs down to solely delivering their unsolicited sales message to the consumer, without supporting the newspaper that the consumer seeks and welcomes.

[edit] Direct-response television marketing

Direct marketing on TV (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 Web site).

TV-response marketing—i.e. infomercials—can be considered a form of direct marketing, since responses are in the form of calls to telephone numbers given on-air. This both allows marketers to reasonably conclude that the calls are due to a particular campaign, and allows the marketers to obtain customers' phone numbers as targets for telemarketing. Under the Federal Do-Not-Call List rules in the US, if the caller buys anything, the marketer would be exempt from Do-Not-Call List restrictions for a period of time due to having a prior business relationship with the caller. Firms such as QVC, Thane Direct, and Interwood Marketing Group then cross-sell and up-sell to these respondents.

One of the most famous DRTV commercials was for 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 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] Popularity of Direct Advertising

A report[6] produced by the Direct Marketing Association found that 57% of the campaigns studied were employing integrated strategies. Of those, almost half (47%) launched with a direct mail campaign, typically followed by e-mail and then telemarketing.

[edit] See also

[edit] References

  1. ^ Entry for junk, Online Etymology Dictionary. Retrieved February 19, 2008.
  2. ^ Origin of the term "spam" to mean net abuse, Brad Templeton's website. Retrieved February 19, 2008.
  3. ^ O'guinn, Thomas (2008). Advertising and Integrated Brand Promotion. Oxford Oxfordshire: Oxford University Press. p. 625. ISBN 9780324568622. 
  4. ^ National Do Not Call Registry Celebrates One-Year Anniversary, Federal Trade Commission, June 24, 2004. Retrieved February 19, 2008.
  5. ^ What is a "Whitelist" and why do I want to work with a "Whitelisted" Mail Distributor?
  6. ^ "The Integrated Marketing Mix," Use of digital Media Rising, 'BtoB Magazine,' July 14, 2008


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