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Digital, data lead to new directions

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To take the pulse of the industry, East Coast Bureau Chief Christopher Hosford contacted experts to solicit their views on direct marketing trends, and the rapidly evolving forces of change wrought on it. Participating in the virtual roundtable were Margie Chiu, exec VP-strategic services at agency Wunderman, New York; Chris DeMartine, director of business development at Nextmark, an online marketplace for list brokers and list managers; Mary Miller, global director of marketing at Mardev-DM2, a data and marketing services company; and Nick Tassi, sales manager-broker and reseller division at list compiling company MCH Strategic Data.

BtoB: Direct marketing has traditionally leveraged direct mail but is increasingly using digital channels. What changes are you seeing?

Margie Chiu: You can't talk about the future of direct marketing without talking about mobile. At Wunderman, we're increasingly gathering people's mobile numbers and building that into our communications with them, offering it as an option.

I think agencies do a great job at the top of the funnel, but it breaks down when customers get into stores and make decisions; that last meter, if you will. The whole range of scanners and mobile couponing is intriguing to us. Also the ability to scan a quick-response [QR] code to get additional information. I recently saw a Calvin Klein QR code for people to view a censored ad!

BtoB: How is mobile playing out in the world of b-to-b marketing?

Chris DeMartine: It's really about managing performance in the traditional channels while increasing your testing in the new channels. You might pull your budget from ads and dump it all into mobile, but with what results? Oops, big mistake! Some smaller companies have made aggressive changes that haven't delivered.

Chiu: Text marketing is catching on, I think. We are seeing both b-to-b and b-to-c marketers using text as a convenient way to reach out on a timely basis. But in the business market many databases already probably have mobile phones on record, so it's easier to take action.

And think about events and conventions, which are very relevant to a b-to-b audience. You can overlap information with virtual maps at massive convention centers. Add GPS into the mix and it gets interesting. But again, it's totally opt-in and depends on what the recipient is getting in return. You have to always think about how this can benefit the recipient.

BtoB: What trends are you seeing in database marketing?

Mary Miller: As the more traditional list broker companies are consolidating, there are fewer players left who command the market. At the same time, because there is more demand-generation and marketing automation, everybody has adopted data enhancement and hygiene. Now, marketers look at list managers and brokers as sources for that instead of marketers having to constantly clean up their own in-house lists. You always know that data will degrade. And because companies increasingly are going global, segments may be done differently internationally.

Nick Tassi: We're now working on very specific worlds, where the run count may be only 700 or so records. It's a tighter universe, a more focused one that will pull better with the right offer. Also, these files are being updated three or four times a year.

DeMartine: Forty percent of the success of any direct marketing campaign lies in the list, regardless of whether it's e-mail or postal. It comes back to how you are able to find a really good list. For that, you have to work with a quality list broker. How do you find that broker? That's the challenge. It's not a matter of price, since brokers work on commission from the list managers or list owners. The problem is who do you call?

Chiu: It's important to be 100% sure you're reaching who you want to reach. In particular when you're talking about a dimensional direct mail piece, where there's a definite hard cost associated with it, it's important to be right. B-to-b marketers have a little more room in play with, because the lifetime value of the customer is so much higher.

BtoB: Direct mail seems to be surprisingly viable these days. It's virtually the only U.S. Postal Service offering that is enjoying growth.

Chiu: We're big believers in cross-channel marketing and making sure everything is working together. With mail, in terms of targeting down to a specific individual, you can be fairly confident in whom you're talking to. In terms of this precision, digital still can't touch mail in any way, shape or form. It's true that with digital you have some level of geo-targeting, but you're still targeting a cookie, not a person.

Also, because people are mailing less overall, direct mail stands out. Everybody seems to be heading toward e-mail, tweets and websites and, as a result, there's a lot of clutter because their incremental cost is nothing. But with mail, since volume overall is decreasing, there's a higher impact.

BtoB: List compilers and managers seem to be working much more closely with marketers, almost as partners. What trends are you seeing here?

DeMartine: For several years list brokers have been acting more like consultants. The challenge now is things have gotten more complex. For example, how does online display impact search marketing? Also, list brokers are having to have that conversation with their marketing clients about how direct mail efforts are helping drive traffic online. The long-term, sustainable growth among brokers will come from the ones who make [the] transition and embrace new media channels.

We're also seeing challenges with international lists. For example, in Canada there are stricter regulations about the use and disclosure of personal information. Clearly, the opt-out in Canada is huge. So marketers have to ask their brokers if the people in the list have had the opportunity to opt out.

Tassi: The trend that is continuing is that companies want to bring in outside files and mix these with their own data, to create their own view of the world of prospects. But what's a prospect? Prospects could be found within any given record. Marketers are looking for options that either bring more insight or specificity ... Based on the requests we're getting from list brokers, we're trying to focus on job functions that make a difference to marketers, so they can segment better and spend their marketing dollars more wisely.

BtoB: How is automation helping direct marketing?

Miller: There are a handful of companies out there that understand what automation can do for their busi- nesses. Some are seeing that they need some sort of nurturing campaign, but many don't know what that means. So they'll buy software and use it as a glorified e-mail platform.

But I think automation's acceptance by midsize-to-large companies will increase. Costs can be kept down by offering software-as-a-service products, so midsize companies can start seeing their investments pay off. It will make prospecting efforts more seamless.

DeMartine: A key here is personalized dynamic content. Personalization is a lot easier today because the tools are there. It's really easy to do an e-mail broadcast in HTML now because the tools work for you. And Salesforce.com and other software-as-a-service CRM applications can make it easy because, with the cloud, you can easily link your content with your database. Whatever I have on customers can easily be linked to my e-mail.

However, with these capabilities, overpersonalization can become an issue. For example, sometimes when you personalize the subject line and the content of an e-mail, it can look too much like spam instead of a more-relevant message to an individual. Recipients are catching on to these tricks. Instead, marketers should focus on doing a better job with relevance within the content of the e-mail.

BtoB: How is social media informing direct marketing?

Chiu: We're finding social is being embraced in all kinds of different ways, and being integrated with e-mail and on websites. Think about LinkedIn, message boards and communities specific to an industry where people are saying, hopefully, good things about you.

Right now, however, we're not measuring the impact of social media marketing; but this is something we're encouraging our clients to think about. Further, in terms of databases, when you are talking to customers, registering them, finding out about their communities and seeing that they're tweeting regularly, you have to weigh this in how you evaluate them. You have to ask yourself, is social about the database or the fan base?

It gets really interesting when you think about a person as an influencer. When you look at a prospect's fan base, you could be potentially looking at someone who is highly influential, with hundreds or thousands of fans. Knowing that may actually result in your treating that person differently as a prospect or customer.

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