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Changes in economy, role of direct top of mind for marketers in 2008

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Direct marketers are nothing if not intuitive. After all, these are people charged with divining what consumers want or need, often before the individuals themselves come to the realization. “Straight Line” decided to tap into this marketers’ intuition to find out what’s in store for the industry in 2008. Here’s what the experts told us they’ll be watching.

The Economy

Recent economic forecasts have been bleak. Peter Johnson, VP-research strategy and platforms at the Direct Marketing Association, said direct marketing spending in some sectors is already being affected.

“There is a softening in … parts of the economy exposed to the credit crisis and the housing crunch,” he said. “Marketers who are involved with real estate and durable goods … we’re predicting to be soft or even a little negative through the first half of 2008.

“The question is whether the banks are also going to be impacted,” Johnson added—a development that could have industrywide repercussions.

Of course, consumer spending—or a lack thereof—is also a concern. “The economy and its uncertainty will continue to be on people’s minds, so position your product or service accordingly,” said Grant Johnson, CEO of Johnson Direct.

‘Green’ Marketing

Consumer attitudes about the environment put “green marketing” on the map. In 2008, government intervention could make it an imperative.

“There are still a lot of folks out there … making noises about the environment,” Peter Johnson said. “That’s been increasing the level of political concern about public policy around [direct] mail.”

Meta Brophy, director of publishing operations for nonprofit testing and information organization Consumers Union, said she’s keeping tabs on the Federal Trade Commission, in particular. “The FTC … will be reviewing green marketing business practices on an expedited schedule. They will hold the first public hearing on Jan. 8.”

In addition, DMA will ramp up its green initiatives this year. The group will unveil target goals in June to reduce members’ environmental impact through paper procurement and use; mail design and production; packaging; recycling and pollution reduction; and list hygiene and data management.

Social Media

Buzz surrounding social media—online forums in which consumers generate content—has steadily increased. Despite this, many companies are only now waking up to its power, said Jeff Zabin, Aberdeen Group research fellow and author of a “Social Media Monitoring and Analysis” report to be released later this month. In 2008, Zabin expects social media to move from the fringe to the center.

“The rise of social media … is causing companies to rethink how they allocate their marketing dollars,” Zabin said. “[It] also represents a tremendous opportunity, because companies can now … generate consumer insights that have a profound impact on their marketing activities, including their ability to understand how well a given campaign is resonating in the marketplace.”

As use of social media for marketing purposes spreads, Zabin expects measurement capabilities to become more sophisticated. “I suspect we’ll see many more companies ramping up their social media monitoring and analysis technologies in 2008 and aligning these … to their overall marketing objectives,” he said.

The Changing Nature of Direct

Direct marketing isn’t what it used to be. A fragmented marketplace and the emergence of new media have irrevocably changed the nature of the profession.

“Direct marketers are morphing into brand response marketers,” said Neil Feinstein, director of creative strategy at ad agency True North. “Those who, in the past, only cared about cost per order are now concerned with ‘engaging’ users.”

This is pushing direct marketers into unexplored territory. “They’re building games. They’re … building Facebook apps and MySpace pages,” Feinstein continued. “They’re asking themselves, ‘What kind of widget can I build that will help my customer?’ ”

Amid this shift, practitioners must stay grounded in the principles of direct, Grant Johnson said. “Testing needs to be used … and tracking to determine what’s working and what’s not.”

Marketers might also reconsider their metrics, said Bob Frady, VP-direct marketing at Live Nation, a concert promoter, owner of the House of Blues.

“[Today] a consumer will see a promotion then, rather than follow the neat path we’ve laid out for them, they’ll go searching for in-depth levels of information about what we’re offering,” he said. “Many times we’ll lose the tracking we’ve put in place. … Traditional direct marketing measurements need to be tweaked to capture how customers are actually behaving.”

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