Obama plan may boost e-tail
Obama’s economic team includes Treasury Secretary-designate Timothy Geithner (l)
January 20 could bring good news for direct marketers, based on key components of President-elect Barack Obama's economic recovery plan. That was the latest buzz from executives who welcomed Obama's proposals, released earlier this month.
Obama said he wants to expand the accessibility of broadband to communities that lack it, and is pushing for hospitals to connect with each other through the Web, giving them the ability to share electronic medical records. Both proposals, experts say, could open up new channels for marketers.
In tackling these challenges, Obama is taking on “two incredibly complex and thorny issues,” said John Adams, SVP of strategy at Draftfcb.
Municipal governments around the country have dabbled with the notion of providing free wi-fi in the past, to varying degrees of success, he pointed out.
“It will be interesting to see just how [Obama] goes about this, especially since the cable and telephone companies are still pretty viable financially, so the model of government intervention in the financial and automotive industries can't be applied in this case,” Adams said. “Tax incentives could be an avenue, but this will take some heavy negotiation with the cable and telephone companies to be viable.”
Widening consumer access to broadband could mean an upturn in online shopping — and more people for marketers and advertisers to reach, said Pontus Kristiansson, co-founder and CEO at Avail Intelligence.
A strong correlation between connection speed and activity in online shopping behavior — that is, the faster the connection, the more shopping consumers do online — has been well established, and is consistently reported in surveys from Forrester and other industry pundits, Kristiansson noted.
“For advertisers, this means that marketing to broadband users will result in significantly higher click-through and conversion rates, vs. advertising to dial-up users,” he said.
Furthermore, Kristiansson added, an increase in people with access to broadband means that more people will be able to view rich media advertisements that may not have been previously accessible to them on a dial-up connection.
Broadband users would be twice as likely to shop online as dial-up Web users, and more broadband users should result in a boost in online commerce, he said.
The incoming administration's electronic initiatives also won praise from trade organizations including Shop.org and the Direct Marketing Association.
“If more entrepreneurs and small businesses had financial support from the government to learn more about direct marketing skills and techniques, they would see their businesses grow, and that would help to recharge the economy,” said Linda Woolley, EVP of government affairs for the DMA. “We believe that this fits well within the overarching economic goals of the Obama administration.”
As for electronic medical records, Adams said it isn't a case of technology lacking, or even a dearth of investment dollars.
“I think the biggest roadblock is resistance by physicians and hospitals to adopting these systems,” he said. “They have to be strongly incented to do so.”
Obama's proposals also have drawn support from advocacy groups — but some also raise privacy concerns.
“We think that it can't just be done on a willy-nilly basis,” said Brock Meeks, director of communications at Center for Democracy and Technology. “We like the idea of free broadband for everybody, but we want to make sure that all of the bases are covered with privacy concerns.”
Obama also used e-mail marketing to much fanfare during the election. Some have speculated how he might use his massive e-mail database to communicate with voters as president.
The Obama campaign began its e-mail efforts in May 2007 with the goal to message, mobilize and to raise money, said Stephen Geer, director of e-mail and online fundraising for the Obama campaign, at last week's Email Insider Summit, in Park City, UT. Through its efforts, it was able to get 10 million people to sign up for e-mails and raised $500 million from three million individual donors.
While Geer did not say what the incoming administration plans to do with these e-mail addresses, he did speak about strategy during the campaign. To build the list before the primary season, the campaign set up e-mail lists in each state and encouraged sign-ups at events and various places online. The e-mails also had a forward-to-friend viral component, and voters were offers rewards, such as free bumper stickers to sign up.
On a large scale, the biggest benefit of Obama's proposals to the direct marketing industry would be an overall improvement in consumer confidence and the economy overall, said Claire Gruppo, managing director at Gruppo, Levey & Co, an investment bank serving the marketing industry.
“I have no idea how much stimulus it is going to take to get the economy back in motion, but anything that can be done is positive,” Gruppo said.