Merging old- and new-school direct marketing
Scott Hildebrand, the newly appointed chief consumer relationship officer at Engauge, has worked in direct marketing on both the client and agency side. He worked as EVP of brand marketing and customer acquisition at JPMorgan Chase, and previously ran his own agency, Bold Mouth Inc., which focused on social media. While moving into his new office, he spoke to Direct Connect about how direct marketing's new wave and old school can work together.
Direct Connect: Are marketers using social media effectively?
Hildebrand: The vast majority of companies are still very hesitant to make a major investment in social media for a host of different reasons. Some of them are cultural, such as they are just not equipped to converse with consumers on a one-to-one basis. Second, as more and more digital has moved to marketing, the whole idea of accountability — of a return for your marketing investment — is very important. When I had my own agency, it was one of the first questions I'd get asked: “What's the return on this?” I don't know if that's a legitimate question to ask at this stage of the game. The third reason is because it's still so new. Brands that tend to be edgier and more irreverent have ventured into it the strongest.
Direct Connect: How do you justify spending on analytics, considering how inexpensive social media is compared to other platforms?
Hildebrand: We still need to develop the final tools to help us measure social media. The real richness in social media is in the data embedded in those conversations. Most database marketing tools have been developed on a basis of numbers. I mail “x” percent; “y” percent respond. Two people might be conversing about where someone bought a skirt last weekend, the quality of the stitching and how friendly the salespeople were. That's not easily quantifiable, but if we were to read that conversation, we would agree that it includes a lot in terms of convincing one of those parties about the validity of those products. It's not easy to mine that.
You know who does this really well? The intelligence services, people like the NSA and CIA, because they've been mining phone conversations. I have bumped into different companies that have unnamed government contracts, and that's where they've developed the expertise for doing this very thing.
Direct Connect: So we need spies?
Hildebrand: No, we need the technology that they use, only applied on a commercial basis. The real issue we need to think about from a marketing perspective includes the privacy issues inherent in that.
Direct Connect: Isn't there an accepted loss of privacy in social media?
Hildebrand: When I had my agency, I had people working for me that were just out of college, and they just had an entirely different mind-set in terms of what they were willing to post. The fastest growing set of users on Facebook includes people who are 35 years old plus. They are much more careful about how much they share.
Direct Connect: Digital media has changed direct marketing, but marketers still heavily use direct mail. Are there times when it is better?
Hildebrand: Mail is a really compelling medium. You turn on your e-mail and you immediately go click, click, click, and you delete a bunch of stuff without ever looking at it. People always go through their mail. There's something about getting that piece of mail. Someone wants to talk to me, someone is interested in me. That's quite compelling. By that way, if they were not getting any response, they would not be mailing. Every dollar that goes into direct marketing — whether it's the Web or mail or DRTV — is measured.
Direct Connect: Social media spending rose just as the recession made marketers cut back. Will they go back to focusing on traditional media as the economy recovers?
Hildebrand: It's going to become another tool in the arsenal. Social media is relatively cheap. We've seen this happen over the past 20 years of marketing. As another channel snaps in, everything expands to accommodate it. Budgets in TV get a little smaller to accommodate more mail. Then those two accommodate more things, like banner ads. Then those three accommodate search. It continues to fragment.