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CADM Attendees Expect Strong Growth in 2004

CHICAGO — Spring is lagging slightly in Chicago, but not the direct marketing industry.

Marketing budgets are rebounding on local and national levels in favor of more measurable media and return on investment, according to senior executives attending the Chicago Association of Direct Marketing's DM Days & Expo show at Navy Pier.

“From my perspective, the trends seem to indicate that marketing activity is going to stay strong for the foreseeable future,” said Joe DeCosmo, president of data mining and analytics firm DeCosmo and Associates Inc., Burr Ridge, IL.

“The first half of last year was quite a different story,” he said. “Many of our clients postponed major marketing initiatives and froze spending on any new projects. Fortunately, that all started to change for us around August. Since then, we've been consistently busy.”

Bill Aylesworth, chairman of CFM Direct, an Oakbrook Terrace, IL, agency, agreed. Almost without exception, marketing expenditures are up, with direct accounting for a larger share of the pie, he said.

“Our clients are relying upon us to help them recalculate their media mix,” he said. “Many are making interactive media a larger part of their plans. Even marketers who got burnt in the dot-com era are embracing the channel again. And many clients are also looking for insight into how to effectively utilize telemarketing with the do-not-call list now in effect.”

Businesses that survived the past two years are expected to thrive. Mary Shanley, president of TTC Marketing Solutions, Chicago, sees her clients focusing on radio, television and mail with inbound telemarketing support.

“Business to business is on the upswing, and even consumer marketers are looking for ways to reactivate customers they have lost over the last 18 months,” she said.

What is also obvious is the convergence of several trends.

According to Clive Maclean, president of The Marketing Store, an Oakbrook, IL, agency, there is more reliance on event and experiential marketing. The use of brand partnerships — General Mills with Hot Wheels or Apple Computer with Pepsi — is up. Interactive is becoming an important part of the marketing mix.

Equally important is the blurring of lines between marketing disciplines.

“Direct marketing and promotions — it's almost impossible now to discern which are promotions and which direct,” Maclean said. Clients are allocating more resources to DM “but more money to promotional marketing, in general, too.”

A trend Aylesworth notices is the growing interest in insert media.

“In the past year, we've developed alternative media programs for nearly all our clients,” he said. “Everyone wants to know how these channels can benefit their marketing programs.”

Euphoria aside, Maclean has a sober view of DM agencies in his neck of the woods.

“The overall agency environment in Chicago and the Midwest has been, and remains, difficult,” he said. “The loss of some significant companies from within the Chicago environment has had an impact on the overall demand and level of activity.

“Right now, we're starting to see more activity and an upswing in hiring,” he said, “but it is still not where we would like it to be.”

Still, the increased appetite for marketing has spurred innovations within agencies. CFM Direct last year introduced ExpressAnalytics, a suite that slices and dices files to help marketers play what-if scenarios.

More recently, CFM began a credit card program for new client Universal Savings Bank in Milwaukee. The first flight of millions of mailers dropped only four to five weeks after the agency won the account.

Similarly, DeCosmo and Associates gained six clients this year. For the University of Illinois Foundation, the firm helped build a database of varsity alumni and friends. It is also creating models to target fundraising for the foundation.

DeCosmo said he saw no major technological developments in the Chicago-area market. The advances to him are the constant focus on ROI of any DM activity and the greater use of modeling, segmentation and data mining for targeted, data-driven efforts.

“A few years ago, most of the focus on the data side was on building a suitable database for DM and CRM activities,” he said. “Now that our clients have built their databases, their focus is using the data most effectively to drive marketing programs.”

If recent work by The Marketing Store for McDonald's Corp. and Verizon Wireless is any indication, advertisers seem open to new ideas.

The agency created a “Text-a-Monster” campaign for the Oakbrook, IL, fast-food chain that offered text codes on fry and burger boxes. Young adults were asked to text in the code on purchase of those items to see whether they were an instant winner. Respondents were then asked to join the “Text Club” to receive relevant outbound text marketing messages.

For client Verizon Wireless, The Marketing Store drove more than 500,000 new opt-in e-mail addresses in only six weeks. Subsequent promotion to these prospects yielded purchase results far in excess of the benchmark, Maclean claimed.

Now the agency is helping McDonald's address health and obesity issues. A test market in Indianapolis is said to have a far-reaching effect beyond its geography.

The big challenge for direct marketers is getting the attention of consumers. The mass of messages out there simply reduces the consumer response to marketing overtures, however targeted they are.

Jonathan I. Singer, group vice president of sales and marketing for Banta Direct Marketing Group, Hinsdale, IL, agrees that Chicago faces much of the same challenges as the rest of the country. But its vibrancy owes much to a diversity of businesses, central location, a revived downtown and an environment that engenders relocation of younger families.

“The strength of Chicago as a location is very strong corporate ethics and strong Midwestern values,” Singer said. “It also has a middle class present in all the demographics.”

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