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Innovation: The Name of the Game Down Under

MELBOURNE – Why are Australian direct marketers so innovative? Because we have to be. The Australian population is small (just under 19 million), so campaigns must generate 20-percent to 45-percent response rates to reach a significant audience.

This is in comparison to the huge U.S. market, where traditional direct-mail traders can generate a 1-percent response rate and still reach a significant audience.

Direct marketing strategies in Australia, therefore, must be finely tuned to achieve successful response rates. Given population size and small databases we can’t afford the luxury of testing new campaigns before rolling them out. We have to get things right the first time. We also have to work hard to isolate target markets within a population that is largely decentralized and spread across a vast continent.

To help overcome this tyranny of distance, both within Australia and between ourselves and other countries, Australians are quick to adopt new communications systems and technologies. We are, for example, experts at using sophisticated geo-demographic and psycho-demographic profiling tools, and are always open to new methodologies or ideas.

It’s a pioneering attitude and one well-entrenched in the Australian psyche.

Geographically far removed from the rest of the world, Australians have become natural innovators, with little fear of change and a healthy disrespect for tradition.

The small size of the Australian market also means most global corporations are loath to spend big money on marketing, so regional offices operate with limited budgets and strict sales targets.

Within these restraints, many clients realize that direct marketing tactics – rather than traditional brand ads or TV commercials – are often the best way to use a small budget and still gain the response expected from overseas headquarters.

We find that today, many companies in Australia insist DM be a major component of any advertising pitch.

The latest Commercial Economic Advisory Service of Australia figures support this, showing that expenditure on direct marketing was more than $7.2 billion last year, outpacing mainstream media at $7 billion. Direct is growing at 14 percent a year and represents 49 percent of all marketing expenditure.

We review all media carefully in our strategic planning phases – television, print, radio, Web sites, multimedia, CDs, signage, collateral materials, direct mail, special events and public relations activities – to choose those which will reach our target audience most effectively.

Note that successful campaigns in the U.S. or Europe do not necessarily work equally well in Australia. Of the global campaigns we have seen, few have been able to transfer successfully to Australia. Australians simply don’t relate to most overseas campaigns.

It’s the same with neighboring countries.

New Zealand agencies, for example, have a history of producing extraordinarily creative campaigns which are usually a complete departure from overseas trends.

New Zealanders, or Kiwis as we like to call them, are not afraid to go it alone. The result? Campaigns which are truly courageous and very successful.

Australia’s other neighboring region, Asia, is largely unexplored in terms of direct marketing. There are a number of reasons for this. Traditional mailing strategies are usually not appropriate because in most Asian countries, it is difficult to secure stable addresses and postal services are not reliable. Other hurdles to overcome are cultural relevance and differences in socio-economic groupings.

We believe the future of direct marketing in the Australasia region lies in the Internet. As more and more Australian companies and consumers begin to use it, data collection and information dissemination will become much easier and more effective than it is today.

Note that Australians adopted the Internet early enough so the pure pleasure of surfing the Web has given way to far more targeted use of the new medium.

Consumers want specific and detailed information and will form ongoing relationships with sites that give it to them. The role of search engines has grown. Yahoo and Excite have recently developed uniquely Australian search engines.

Within Australia, direct marketers can use the Internet to contact people in isolated rural townships, giving them greater access to products and services.

The Internet will also help us to learn more about rural Australians’ lifestyles and form relationships with them far more successfully than using traditional mail services.

On a global level, the Internet opens the world to Australia. Our small market will widen as products and services can be marketed and sold to the rest of the world online.

At the same time, we must be aggressive in protecting our market from the reach of overseas businesses that now have easier access to Australian consumers and can compete with us online.

Australia may have a small population, but we are a nation of big thinkers, and our direct marketers are out there with the best.

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