25th Anniversary Issue: Promotions, DM Join For Better Targeting

Until a few years ago, direct marketing used sales promotion as a tactic: “And if you act now, we’ll include a free set of steak knives!” Sales promotion used DM as a medium, offering business reply cards to make it easier for consumers to mail in their sweepstakes.

As the disciplines interacted, sales promotion practitioners learned it was not always financially feasible to take the shotgun approach to reach a target audience. It became clear that a more direct marketing approach – targeted, relevant and accountable – was needed. Let’s look at examples of how sales promotion has evolved to be more like direct marketing.

Macy’s Thanksgiving Day Parade was initiated in 1924 to create awareness for the store’s holiday offerings. For many years, it served to pre-empt the competition and established Macy’s as the Christmas headquarters. Big, broad and bold, the parade remains an iconic kickoff to the holiday season. It’s relevant, but not targeted – and definitely not accountable, except in the broadest sense at the cash register.

In the 1950s, Stanley Arnold revolutionized the sales promotion industry by offering outrageous and wonderful sweepstakes prizes in promotions for his packaged-goods clients. Many of them were extremely successful, mainly because a company could require a purchase to enter a sweepstakes back then.

For example, Gillette customers who bought a specified blade were entered to win a share of stock from every company listed on the New York Stock Exchange. It’s interesting to note that great prizes, along with lots of chances to win, remain key to developing successful sweepstakes.

Largely because of Arnold’s success, marketers today must offer an alternative means of entry – “No Purchase Necessary!” Cracker Jack pioneered the “alternative means” to give consumers a write-in way to get the same game pieces that were packed inside the brand’s product.

Database Changes Everything

Sales promotion had yet to be more targeted or accountable. The discipline even started losing relevance for consumers and instead became a means for marketers to help drive display within grocery stores. Run a sweepstakes, advertise it and buyers would give you an end-aisle display. Sales went up, thanks largely to the displays. But sales promotion was still big and broad.

In 1981, United Airlines introduced its Mileage Plus program, and the electronic database became forever ingrained in the sales promotion lexicon. Other airlines followed, along with hotels and restaurants.

The beauty of data-driven programs is that they create an audience that essentially opted to receive marketing messages. United, and the entire sales promotion industry, finally had a way to measure success beyond the cash register.

Some sales promotions are so intuitive to a brand’s personality that they reach consumers in a way that transcends traditional strategies. “Guinness Win Your Own Pub in Ireland” touched on the essence of the brand and reinforced its relationship with the Emerald Isle. Barq’s Root Beer’s “Russia Is Going Out of Business Sale” gave away surplus Russian goods just as our great Cold War foe was going under, firmly establishing Barq’s (albeit temporarily) as a quirky, fun soft drink brand. Unlike Guinness, however, the Barq’s promotion could not easily be duplicated the following year.

Technology Helps Targeting

Technology has helped marketers target consumers and manage accountability in even more relevant ways.

In 2000, Ericsson (now Sony Ericsson) and AT&T Wireless introduced a new cell-phone design by reaching out to current heavy users with a direct mail game piece designed as a replica of the new phone. The phone contained an optical sensor and an LED screen. Consumers watched a special optically encoded commercial on ABC’s “Who Wants to Be a Millionaire” and, just by pointing the game piece phones at the TV screen, learned whether they won.

Sales promotions also have become more relevant because marketers have developed many more customer contact points – stores, events, online, on the street, wherever a targeted message can be delivered. Just look at the proliferation of magazines and cable TV channels and you can appreciate the means and the difficulties that marketers face in reaching consumers with promotions that really touch home.

Room still exists for the broad, far-reaching effort. But even big games like Burger King’s recent “Spider-Man 2” movie tie-in need something to ground them and make them relevant to their diverse audiences. The borrowed interest of a successful property does this. Offering many chances to win does this. And, of course, offering exciting prizes does this.

I think we will continue to learn from DM as we develop the roles of data and analytics in sales promotion planning. As audiences grow more divergent and marketers look for ways to differentiate their promotions, it will keep sales promotion firmly in the driver’s seat for some time.

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