Traditional and digital marketing thrive in tandem
Direct and digital marketers today are tasked with defining and refining the optimal marketing communications strategy based on audience and objectives. That often includes marrying both traditional direct marketing and digital media channels, whether the marketer's goal is customer retention or new customer acquisition. Direct Marketing News convened a diverse group of marketing executives in March for a roundtable, sponsored by Kodak, to discuss this topic, including marketing integration challenges and opportunities; the role of print and direct mail in the overall marketing mix; how best to deploy behavioral targeting that is both meaningful and relevant; and the importance of content in engaging customers. Participants also discussed the role and merits of social media in the marketing toolkit.
Direct Marketing News: What role does print and the traditional direct mail channel play in your larger multichannel marketing strategy?
Jim Kabakow (Media Horizons): I don't think the effectiveness of the offline channels like print, direct mail and inserts have changed. What's really happened is digital has become another effective marketing channel. If you look at the overall spend, digital, on a push media basis is still relatively small compared to the other channels. Digital has given a place for consumers to interact and transact, even if they're driven to a website by an offline channel.
Tom Fenske (Fenske Media Corp.): Mail is the closer. The other media work hand-in-hand, opening the door: radio, billboards, newspapers and the Internet. As we track every mailing, we see direct mail bringing high response rates. The other channels are valuable to the mix, but mail pays the bills.
Peter Westerman (Ziff Davis Enterprise): Most of the revenue that we drive in our business comes from digital media. Probably 85% of the company's revenue at this point is from digital, but 90% of the names that we acquire come in through our print publications. We've started thinking about print vehicles almost like traditional, postal direct mail. That's the way we're creating our relationships with our customers. We monetize through our digital events and through lead generation activities. But all the research that we've done internally and that our clients have shared with us specific to print as a medium show that it's still very strong [as an information vehicle].
Bryan Trainor (Bulbs.com): We don't use any print. We don't use any traditional channels. We are growing right now and testing a lot of different online programs. We're doing a lot with paid search, as well as free targeting and behavioral targeting. We're significantly growing within e-mail.
A lot of our marketing focus right now is organically trying to build our marketing e-mail database. We're not in the position to buy a lot of lists, but we have a 16-person internal sales staff that is constantly working leads. I'm putting all my money towards online because it's getting me the best possible ROI.
Larry Kimmel (Direct Marketing Association): It's very different by category. We just ran an event for the nonprofit community. In the fundraising world for nonprofits, it's about 95% mail. You've heard about some success in mobile, but that's not scalable. In other categories, like online commerce, it's the converse. We see significant lifts when direct mail is combined with other channels.
Stacy Braun (AXA Equitable): We're marketing to the financial adviser or to the broker, as well as marketing directly to the consumer to help create brand awareness. That way, when they have that interaction with the intermediary, they're familiar with our product line.
With our captive agents, we've created a program where they can select the direct marketing piece that they want to use with their clients and customize it. Some of the products that we sell, we sell them once. It's something that they buy for the future. We really need to use direct mail as a way to retain [them]. Retention is a very big part of our business.
Direct Marketing News: One of the biggest challenges for marketers is marketing integration. How are you solving that?
Debbie Roth (Japs-Olson Co.): The integration really ties into what is your core. The core for so many marketers continues to be direct mail. Your arm cannot work without its connection to your body. The nice thing about the core is that it is one of the easiest ways to get measurable results. You can measure it a lot easier than so many of the other channels.
Westerman: We would never lead with something like postal direct mail as the first element of the campaign. It's expensive, and the cycle time from production to testing to feedback is much longer than our business can tolerate. We're going to always use digital first. We're always going to use channels that are "free" to us before we spend a considerable amount of money on something like direct mail.
When we look at product launches now internally, the first things that we do are all digital because they're relatively cost-free. When we send e-mail or telerecruiting for something, or somebody's tweeting about something that we're doing, we get pretty instantaneous feedback. It takes too long to gather that through traditional direct mail.
Darrin Wilen (Wilen Media): The proper integration really involves a strategy and the proper synchronicity. We have a website called Where's my Mail, which allows us to track every piece of mail that goes out. What we're able to do is determine exactly when our direct mail for clients will hit the home. Then you can determine [when to] send an e-mail.
Braun: We're doing a lot of experimentation this year with social media. What we're finding in doing focus groups on all of the exciting technologies and integrated ideas that are out there, is that you can't rely on consumers to integrate them. They really have to stand on their own.
Direct Marketing News: There has been much discussion and hand-wringing around behavioral targeting. What is your approach?
Braun: We started with segmentation and really understanding who are the customers that we want to target. We're a 150-year-old company, and we have some contracts on the books that are 40 years old. We have customers who don't even know they own a contract from us. Trying to understand what products and services we want to offer to these different segments of the market was our first goal.
Now that we've identified our segments, it is understanding how these people think and how they behave. We're doing a lot of testing, working with our counterparts at our group level, and doing overlays with our existing customer base onto prospects.
Ginny Musante (Microsoft Corp.): We have some behavioral targeting pilots right now that we're working on. One thing we're thinking about very seriously [regarding behavioral targeting] has to do with contextual relevance. It gets back to right message, right person, right time. If you give someone a message but it's completely out of context, it can have a negative effect.
Direct Marketing News: Can you give an example of your behavior targeting?
Musante: This is very personal. Friday morning my boyfriend said he wanted to marry me. I was so excited, but he didn't give me a ring. I started to search the Web because I want a ring, right? Later, when he came home, we were doing something completely different on the Web. Up pops a banner ad for a ring. It led to a pretty awkward conversation. If I privately was looking at my computer on a wedding site and got that ad, I would have been clicking on it. Instead, I had the opposite reaction. You really have to think about the environment in which you are marketing.
Kimmel: Can I make a point about behavioral targeting? I hate the term. It's the wrong characterization of what we're doing. I don't think we should ever use it. What we're doing is personalized messaging. If you change the dialogue and the thought process of what this is about, we're trying to be helpful and supportive of individual consumers. It's not just semantics. It's an understanding of the service model that's part of the heart and soul of the direct marketer's DNA.
Westerman: I think there are a couple of different actors that we're talking about regarding behavioral targeting. I think people are appreciative if you're using data to give them things that are more relevant to [them]. I think where that kind of targeting has gotten a bad name is you have a lot of data brokers and you have these aggregators who are aggregating behavioral data and turning around and selling it to people who don't understand the context in which the information was gathered and they're using it for inappropriate things.
Scott Drayer (Paul Fredrick): We take advantage of remarketing opportunities and personalize interactions with the customer based on our own internal data. If we're using information that the customer has readily provided us or modeling behaviors so that we can present them with a more relevant message, I don't think as many people are having problems with that.
Kabakow: When you're doing behavioral targeting or retargeting, you're not getting the information on where those people actually searched or looked. You just know that they've been to one of those pages or they've been to your site, so you're able to serve them a relevant banner or message when they're surfing the Web.
On the direct mail side, when you talk about behavioral targeting, you're talking about building predictive models to target best prospects. It would be very difficult, with the cost structure of direct mail today, to make direct mail work well without those types of predictive models.
Fenske: We've been talking about acquisition of new customers and house file mailings. The house file is a goldmine. It tells you what they bought, when they bought it and how much it cost.
Ginny Musante: It's not so much about behavioral targeting as it is about personalization. What we know is that with our customers, it will be personal, it will be connected, and it will be social. When you launch your Xbox and you sign into Xbox Live, you've signed in with an ID. They know who you are. Then, if you have that same ID on your mobile phone and you bring it to the Web, then it's personal.
From an entertainment perspective, we can make recommendations about what you would want to watch. It's connected to Facebook and Twitter and you can invite your friends to have the same experience with you. The same technology that allows us to do that from an entertainment perspective will ultimately allow us to do it from a marketing perspective.
Braun: I think it depends on the industry in terms of how close a customer will let you get to them. Entertainment is one thing. But when you start talking about your financial situation and the investments that you've made over time, customers don't want that information shared.
Direct Marketing News: What are the major e-commerce trends you're seeing?
Drayer: We very much have a heritage as a cataloger. The multichannel component came later. Print is still a viable channel for us. We're using the catalog, we're using print as an acquisition tool to bring in new customers. That's been very effective.
With e-commerce, there are a couple of the things that we're thinking about right now. Among our current initiatives is optimizing our e-commerce site from a personalization or behavioral targeting standpoint.
As a multichannel retailer, the heart of our business is our customer database. We want to make sure that we're making the right decisions on attribution and monitoring behaviors that are important so that we can run CRM and figure out "is it better for me to send this person a catalog next or an e-mail next?"
Trainor: We've been testing content. LED is a new and up-and-coming technology, so in the last few months we've been testing content around LED [in our e-mail]. We've seen triple response rates any time we include content regarding LED.
Musante: Content is huge for us. The most scarce thing in this fragmented media world is the consumer's attention. In order for a marketer to get a consumer's attention, they have to offer value.
Brian Bolton (Bridgeline Digital): We work with a lot of customers that are grappling with content management. They say, "My content's not on my website anymore. My content's on Facebook. My content's on Twitter. My content's in an e-mail campaign that's all over the place." We've actually revamped our products to give marketers more ability to manage that concept of content. That applies not only to what you're doing on your website and how that content is performing there, but hooks into what you're doing anywhere your content can be found.
Direct Marketing News: How is social media playing a role in your marketing strategy?
Braun: We've done a lot of work over the last six to nine months on social media and trying to understand buying habits of consumers around financial products. We're selling the relationship that you have with your adviser. Those individuals are our brand ambassadors. We just launched a pilot a week ago with 50 of our AXA advisers. [We're] training them on how to use social media and providing preapproved content that we developed.
Kimmel: Many companies are still figuring it out. I think the biggest question now is who owns social media? What is it, and what is the best way for marketers to use it? A lot of companies are deciding it's not an e-commerce play.
Direct Marketing News: Ginny, is it about customer service or e-commerce for Microsoft?
Musante: No, it is about engagement. For example, on Halloween, Reese's Peanut Butter Cups did a campaign with Xbox where they invited you to enter your avatar in a Halloween costume. A total of 1.6 million people dressed up and entered the contest, and something like 125,000 people clicked on and played the Reese's Peanut Butter Cup TV ad. People talked about it on Facebook and Twitter. The challenge becomes how to track that.
Kimmel: Social media is forcing marketers to be marketers. Marketing for the last 30 years has been about advertising communication. It hasn't been about product. It really hasn't been about price and it hasn't been about place. But suddenly, with consumer empowerment, consumers are deciding what they want and what to recommend to others. Social media is forcing marketers to think about holistic marketing. I think it's very exciting if you're a marketer, because most marketers today don't have influence on the totality of marketing.
Direct Marketing News: Is it a marketing function or a PR function or both?
Bolton: It can be both. We're executing a nine-city seminar tour around content marketing. We made a conscious decision to do a lot with Twitter around this event. We've been promoting the hashtag. Every confirmation e-mail, it's in there with links to automatically post on Twitter. The amount of traffic that we're starting to generate around our hashtag on Twitter has generated registrations from people that we're not even marketing to. A lot of the other stuff that everyone talks about is hard to measure.
Direct Marketing News: Is anyone else able to measure social media yet?
Westerman: We look at social media really as an evangelism function. We did a lot of work with Microsoft about 15 years ago when the developer relations group still existed. It reminds me a lot of the activities that they used to do, where you have evangelists who work for your company who then empower third parties to talk on your behalf.
Bolton: The speaker on our content marketing tour tells a story in her presentation about taking a trip to Armenia and looking for a camera. She throws a question out on Twitter asking for a recommendation for a camera. Then, the VP of marketing from Kodak responded to her directly and made a suggestion. Now she's telling everybody.