Chances, Challenges of Online Channel

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We all know that direct marketing is undergoing drastic changes. With the new telemarketing laws as well as the rising cost of postage and declining response rates, direct marketers are looking for the next big opportunity.

Enter the online marketing channel. Besides providing access to an audience of 200 million unique users, marketing online is a natural extension of direct response practices and assets. End-to-end response tracking, similar metrics such as CPA and creative testing all apply here, making it an easy transition. But marketing online also differs, with unique challenges and opportunities.

Challenge No. 1: Reaching consumers is getting harder and easier at the same time. While digital media continues to explode, giving consumers more choice and marketers more points of interaction, the very nature of digital media often gives consumers the power to eliminate intrusive advertising, if they choose. More points of interaction - yes. Higher likelihood your audience will give your message the stiff arm - absolutely.

Challenge No. 2: End-to-end results tracking is becoming both easier and harder. More direct marketers use online tracking tools. These tools are getting better, and they're giving marketers more and richer data than ever. The result is information overload, making it harder to understand what's going on and take appropriate action.

What all this data does reveal is that digital media use patterns are complex. In search, research has shown that there can be a seemingly stream-of-consciousness pattern of activity that doesn't necessarily follow a linear progression leading to conversion.

Today's de facto attribution model, which gives full credit to the last click prior to conversion, is just the tip of the iceberg. Giving "credit" to the correct advertising that drove the result is becoming a more difficult science.

So how can DMers overcome these challenges? Here are two opportunities.

Opportunity No. 1: Use the targeting capabilities of digital marketing to delight, rather than to sell to, your audience. Direct marketers are trained to sell when presented with a chance to interact with a prospect. Digital media and the context within which the user sees your message potentially tell you a lot about what that user needs at a particular time. Think more about user intent and how you can use this information to better identify your prospect's needs.

Targeting should be used to drive creative excellence. User intent reveals a need. Delivering against the need should be the objective of your creative. Delighting the user, instead of selling the user, will increase your chances of being heard.

Opportunity No. 2: Eliminate the silo approach and embrace media mix optimization. The standard approach is to evaluate results within a single channel. But consumers don't use media this way anymore. Consumers can watch television while surfing the Web and listening to digital music devices.

An interaction with one form of media can cause a jump into another. Silo approaches lead to the wrong questions. Instead of asking, "How did this channel do?" we should ask, "What portfolio of media do I need to best captivate my target audience?"

Track advertising across media so you can correlate and holistically track user behavior. Direct marketers need to look to more sophisticated techniques such as media mix modeling. Only then will we have approaches that make sense in the digital world.

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