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NYU Panel: DM Shines in Tough Economy

It is a sign of the times when a CEO says business for his agency group is good because the payroll was met last week.

But that is what Hawkeye Communications' G. Steven Dapper told an audience yesterday at a seminar organized by New York University's Center for Direct and Interactive Marketing.

“It's been an interesting two years,” New York-based Dapper said, “[but] I don't think there's ever been a better time to be in database, direct marketing, anything that gets a return on investment.”

Businesses are moving forward even though uncertainty abounds around the world, he said. That progress, however, brings a few changes that marketers must understand.

First, Dapper sees a need for speed to solution. Marketers must understand what makes consumers tick and how brands influence them. This is especially true for direct marketers.

“They used to talk of advertising being above the line and direct marketing being below the line,” he said. “I don't think there's a line. Brands are changing behavior, and consumers don't see the difference.”

Another trend is the increasingly global nature of marketing. Third, the whole idea of data access and analysis will get a fillip. Consumers will have to be targeted better, so brands will have to know where to fit in.

Finally, marketers must realize that consumers are more sophisticated, with ready access to information.

“It's great. Still, it's going to be difficult,” he said. “The economy's not going to turn around tomorrow.”

Fellow panelist Elissa deBritto, president of ParadyszMatera, was equally optimistic about DM's prospects. Her direct marketing agency is “growing and hiring a little bit,” she said.

Most of New York-based ParadyszMatera's growth has come not from old clients, but new business. But even as clients are more conservative about the volume of mailing or testing, they still expect more creative approaches and faster results.

“I'm a little optimistic about this coming year,” deBritto said.

Steve Fuchs, executive director of New York ad agency True North, actually has seen business grow on the interactive side. He said about 50 percent of the growth for True North — not to be confused with the ad conglomerate that once had the same name — was from e-mail, site development and online ads for clients.

“That's where we're focusing our attention, at least from our clients' side,” Fuchs told the audience of NYU direct marketing grads and faculty, and agency and marketing executives.

Circumstances have changed, too. Traditional marketing departments now control the budgets, having wrested them from interactive divisions set up in the high-tech heyday. That change also saw a shift in power.

For example, three years ago True North could not find a decent Web designer with Flash skills. The one who was interviewed demanded $100,000 in annual salary, plus a 50 percent raise every six months.

Now, looking for a designer with the same skills, the agency posted the job on Yahoo Inc.'s HotJobs.com. It received 400 resumes. The pay packet is $35,000 to $40,000 a year.

“Yes, it's a buyer's market,” Fuchs said.

Now that “the craziness of the last three years is gone,” he said, marketers comprehend the Internet's true benefits.

E-mails to encourage subscription renewals is one. Also, the market will see an emergence of online ads that capture data within the unit and not whisk users elsewhere. This ability has existed in the past few years, but only now is gaining favor.

This does not mean direct mail is redundant, Fuchs said. Business-to-business marketers consider hard-copy mail their most reliable tool. But even they are using e-mail for follow-up as postal addresses get matched with e-mail data.

But for prospecting to succeed, it is crucial to have new and fresh e-mail lists on the market. The same pool of names and compiled lists has been circulating the past few years. The good news is, Business Week and Forbes have put their e-mail lists on the market, Fuchs said.

Panel coordinator and graduate program director Marjorie Kalter's question on getting inside the mind of clients generated interesting responses.

“What's everybody else doing that works? There's less interest in creating something that's brand new,” deBritto said after observing client and marketer behavior.

Marketers want to stick with the tried and true. This is more the case as time to market shortens and marketers demand quicker results on campaigns. But she advocates that they take some chances.

“People are buying, and to establish some credibility it does take creativity to stand out,” deBritto said.

Marketers also should pick what they are good at, focus on it and not spread themselves too thin.

Dapper said clients should demand more ROI on their marketing dollars.

“Opening rates of e-mails are dropping dramatically,” he said.

The challenge is collecting responsive e-mail addresses without violating privacy or spam standards.

Dapper's agency has devised a creative idea for a client. About 7,000 slices of cheesecake will be distributed in a mall. But to eat a piece, consumers must give their e-mail address for marketing purposes.

When asked for best practices among marketers, Fuchs said Walt Disney Co.'s Buena Vista Home Entertainment was a good example. An agency client, Disney always is willing to test not only new technology, but creative to promote its videos and DVDs.

Dapper cited retailers J. Jill and L.L. Bean. He liked Discovery Stores for its multichannel approach.

Still, online has a way to go. Fuchs expects more effective use of rich media ads as well as the idea of transmitting information within the ad unit. E-mail marketing will continue to grow even as the fight to stand out from the clutter and spam intensifies.

DeBritto said basic direct marketing principles will come into play as the mining of databases grows more sophisticated.

Beyond that, Dapper expects in-store marketing to become more interactive. Event marketing will grow dramatically to reflect lifestyles. And multichannel use will accelerate.

“I think the whole concept of customized bundled messaging for households [will become more popular],” he said. “You'll develop programs for best customers using all channels. Technology will allow you to do that.”

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