GRAPPLING WITH CYBER-CONSUMERS;DIRECT MARKETERS' CLASSIC STRENGTHS MAY BE CRUCIAL

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Direct marketers are facing consumers who-empowered by interactive technologies-are in control of the marketing process like never before.

About 2,000 attendees grappled with this reality at the Direct Marketing Association's spring conference last month in Los Angeles.

"With new media, rules have changed. Marketers no longer drive the communication with customers as they do with all other types of marketing methods, including traditional direct marketing," said Harris Gordon, VP at A.T. Kearney. "The customer now has the power. So marketers need to understand the dynamics of how to engage customers in interactive dialogue-and what the implications are in this new `magnet' model for marketing."

`WELL-POSITIONED'

"Direct marketers-because of their experience in data analysis, targeted marketing and fulfillment-are well-positioned to profit from the Internet and all types of new media," said Mr. Gordon, who unveiled a DMA-commissioned study on direct marketers and interactive media.

Early findings of that study of 552 direct marketer respondents note that 52.2% use the Internet/World Wide Web for sales and marketing, 48.2% use online services and 37% use CD-ROMs. But 84.3% of Internet users have been using it for less than one year.

About 74.9% adopted new media just to stay ahead, 50.7% to test new distribution channels, 47.7% to reach new customers and 47.2% to increase revenues.

Keynote speaker Martin Nisenholtz, president of The New York Times Electronic Media Co., detailed three scenarios of how the interactive world may evolve.

3 SCENARIOS

The first envisions marketers dominating through creation of free, exciting ad environments, promoted through mainstream media and blending promotions, event marketing and talent integration. Attention spans will collapse-instead of spending 30 or 40 minutes with print magazines, consumers will spend 30 or 40 seconds with each site, and "advertisers build promotional playgrounds to catch the consumer."

Scenario two is the opposite and more traditional, empowering the "megabrand" venues. Consumers would spend more time with these megabrands and marketers will nest in the mega-brands, staking out territory as they do now at Walt Disney World. Traditional entertainment providers will become dominant and capture advertisers based on how they draw consumers.

In the third scenario, the consumer uses interactive media for practical purposes instead of as entertainment-to pay a credit card bill or get details about a car. Marketers go practical too, using cyberspace for customer service and direct response.

These scenarios are not mutually exclusive, Mr. Nisenholtz said, but "depending upon which scenario evolves, direct marketers need to reach people differently with different messages."

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