*Dot-Coms Get Their DM Education

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The exhibit hall at the DMA's 83rd Annual Conference & Exhibition looks different from a few years ago because of the addition of the dot-com marketers. However, many of the viable dot-coms owe part of their success to the education they have received from traditional direct marketers who have been attending these shows for decades.


"A year or two ago, traditional direct marketers felt like we were being left in the dust," said Fran Golub, senior vice president of list management at Walter Karl, Pearl River, NY, a division of Donnelley Marketing. "Now we're saying to the dot-coms, 'Guess what, kids? We're the teachers. Come to us.' "


Now that the days of wanton spending are over and Wall Street is demanding profits, Internet marketers are turning to offline direct marketers with open ears.


Concepts as second nature to veteran direct marketers as list managers and list brokers were unknown to many of the dot-coms, said Rob Sanchez, vice president of interactive and list management services at MeritDirect, Stamford, CT.


"In fact," said Andy Ostroy, managing partner at ALC of New York LLC, "RFM was not necessarily even on the radar screen of the dot-coms."


Response analysis, testing and return on investment also were unheard of, Golub said.


"[Dot-coms] did not look at cost per acquisition. They simply tried to build a house file as quickly as possible," said Frank Quaranta, director of media services at Millard InterActive, Peterborough, NH. "If you're spending $60, $70, $100 per customer, you're not going to see any kind of payback on that anytime soon."


Another rude awakening came when some dot-coms turned up on an offline direct marketer's doorstep looking to create and drop a direct mail piece inside of four weeks, Quaranta added. They had no idea about the time and planning that direct mail campaigns take.


Now, traditional direct marketing practices are all the rage among the Internet companies. Not only are dot-coms doing direct mail, but they also are getting their own lists onto the market and are overlaying them with demographics to generate revenue, Golub said. More dot-coms also are embracing the concept of testing offline lists and are finding they are much more targeted than most of the e-mail lists available, Quaranta said.


"What we're seeing now is a real fundamental migration back to direct marketing principles, which in turn has made companies like ours that much more valuable," Ostroy said.


Of course, the Internet community has taught traditional direct marketers a thing or two along the way. The mutual learning process has been an asset to both sides, Ostroy said. Ultimately, it has become a widely accepted notion that a combination of direct mail and e-commerce works best, Sanchez said.


Meanwhile, many still question whether the dot-coms will continue to heed the advice of direct marketers.


"I hope the dot-coms are taking our direct marketing discipline to heart. If not, the waste will only become more profligate, and the next big dot-com washout will occur likely [in] February and March, when the holiday season is accounted for," said Ralph Drybrough, CEO of MeritDirect.
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