Direct Marketing's Media Take Over

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Greg Corso, dunnhumbyUSA
Greg Corso, dunnhumbyUSA

As a student of statistics, my college years were steeped in the study of probability and likelihood, from survey sampling to process control and regression modelling. But without any professional work experience to apply it to, it wasn't until I saw the 2001 film Traffic that the real implications of statistics for business truly resonated with me. In one scene, a Mexican drug cartel member described how it used predictive analytics and regression models to plan border crossings. It was an epiphany, adding new meaning to the direct marketing adage of “right time, right place.”

Today, the convergence of Big Data and addressable media is creating new, thrilling implications for the future of direct marketing. The two have a symbiotic relationship with each other – more data improves our ability to increase relevancy in consumer touchpoints, which in turn yields better response (clicks/comments/purchases) and hence generates more data. But it's not just that we're creating large amounts of data, we are generating massive volumes of actionable data. This evolution means that the delineation between above- and below-the-line media is blurring. CRM used to mean direct mail, and then email. Now, with the proliferation of one-to-one targeting and measurement capabilities, every media channel is essentially a direct marketing channel. Since the CRM arsenal has expanded to include addressable media like digital display, search, social platforms, and even TV, the direct marketer's purview is encroaching on the other, once separate and distinct, areas of marketing, causing the silos within marketing departments to overlap and merge.

Take programmatic buying of digital display media. It's really just good old-fashioned direct marketing executed in a new channel. By combining it with search-inspired, auction-based real time bidding (RTB) technology, it has become even more powerful. The RTB wave reflects an industry migration away from cost-based media buying toward value-based media buying. No longer will advertisers try solely to maximize reach at the lowest possible cost per thousand (CPM). Instead, the smart advertisers will look to maximize the value of every single impression by measurably delivering relevant ads to targeted consumers. This strategy mirrors that of traditional direct marketing and indicates that with RTB, digital display is not just a fast growing media channel, but a potent and scalable direct marketing channel.

The RTB movement is encouraging because it signals that the online advertising industry, just like the drug trade in Traffic, is adopting the principles of direct marketing: delivering the right message to the right person in the right place and at the right time. This addition of digital display to the addressable media mix means that the number of opportunities to deliver relevant and timely communications is growing, which will be advantageous for marketers dedicated to personalizing the experience to build long-term loyalty with their best customers.

Along with this opportunity comes a responsibility to change how we plan, buy, and serve media. RTB is pushing the rest of the industry to refine targeting methodologies and adopt more of the “right person” approach. The “right time” piece comes next, usually informed by recent behavior indicating that the target may be in-market, as in retargeting. But commonly overlooked is the “right thing” (content) component. Without tailoring content to ensure relevancy, RTB becomes just another high-priced marketing channel. A homogeneous content strategy executed in a precisely targeted way is akin to a smuggler crossing the border effectively but forgetting to bring the drugs.

Further, if we only use our data insights to inform channel-specific plans, game-changing results will remain elusive. The wealth of data that has resulted from the propagation of addressable media enables linkage across channels at a customer level–leading us toward true multichannel marketing attribution. With the knowledge of how different customers respond across channels, we can stop creating channel plans and start formulating channel-agnostic customer contact plans. For example, while one individual customer may respond 5X better to direct mail, another may be more likely to respond best to the combination of TV and email. In other words, no one media plan fits all. Through more relevant and seamless interaction with customers, our strategies can become even more precise and effective overtime. And given the measurability of it all, the industry could begin buying and selling these multichannel customer plans based on the results, potentially adopting a pay-for-performance model.

Marketers and the media industry at large are known for coining grandiose statements like, “2013 will be the year of mobile.” Well, 2013 isn't the year of mobile and it isn't the year of Big Data. Neither the channel nor the data tells the whole story. This year, and every year, is the year of the customer. Marketers that firmly believe in the power of data, and the ability to drive more accountability and sophisticated marketing strategies with it, need to reorient their focus. With blending marketing silos and an ability to interact seamlessly with the customer, it will be the quantitative, customer-first minded marketer that leads the charge toward Big Results in marketing.

Greg Corso is Vice President, Media Solutions, at dunnhumbyUSA. Follow him on Twitter @gjcorso.

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