Outlook 2005: Around the Globe, the Message Is Integration

DMail and e-mail remain the workhorses of direct and interactive marketing in the United States and key markets overseas where OgilvyOne Worldwide has offices.

That trend is echoed in DM News' 2005 forecast for direct and interactive marketing in the enclosed Outlook supplement. But recognizing market shifts, OgilvyOne is urging marketers to move away from the spend/share-of-market calculation as the only way to deliver sales.

“With the consumer market as fragmented and segmented as it is, it's essential that we reach our consumers where they are with a message that will get them to act now,” said Trish Chuipek, director of client service at OgilvyOne Chicago. “Direct response vehicles give us a format to do this while still delivering the brand message.”

Direct mail is among channels like online banners, e-mail and direct response print ads that are popular with OgilvyOne Chicago clients. The shop now suggests integrated marketing, spending dollars through the funnel versus only at awareness to achieve aggressive acquisition goals.

Chuipek said her office recently finished a test with Allstate using direct response television, radio, print, banners and newspaper ads. A strong benefit message and call to action were engineered to boost calls for the insurance company.

Going forward, OgilvyOne Chicago sees interactive marketing as a key channel to convey promotional offers, especially for brands lacking a retail presence.

“But it won't be only delivering the offer via a banner,” she said. “The promotion itself will be an interactive promotion, playing a game online, for example, versus only collecting personal information. I think the goal will be to engage people and get them to come back more than once, and the game environment is a good way to do this.”

OgilvyOne New York sees an emphasis on sales enablement in business-to-business marketing. Clients are focusing on tactics from media educational pieces to collaborative online workrooms where reps can deliver personalized information. Multichannel programs letting consumers engage with brands on their own terms work for business-to-consumer marketing.

“In most cases, we've seen higher response with those who participate in both direct and interactive communications,” said Dan Goodman, director of interactive marketing at OgilvyOne New York. “Interactive communications are being implemented as the primary channel for lower-value customers, as added-value content and information sources for high-value customers and as a potential single-channel choice for all.”

Goodman sees scope this year for leveraging video online, packaged in a response-oriented context. Also, media firms like CNET, MSN and Yahoo are using video to replace text articles or reviews to provide a broadcast experience. And brands use online videos to deliver broadcast experiences.

Another trend he sees is creation and distribution of original content to engender long-term brand engagement and loyalty. Online, this can translate to members-only access sections as well as standalone and unbranded sites. OgilvyOne New York is also making strides with tele-web offerings and expects those, along with click-to-chat services, to grow.

“We're using this to both assist in conversion — for example, putting click-to-talk and click-to-chat functionality at key attrition points in the customer process — as well as to provide special treatment to high-value customers through personalized customer service,” Goodman said.

The situation in Europe varies by market. In Britain, which closely mirrors U.S. trends, traditional DM holds its own even as the Internet plays a larger role.

“Although we're seeing some significant replacement of direct mail with e-mail, particularly in business-to-business, we're seeing much more activity combining direct mail and e-mail approaches,” said Paul O'Donnell, London-based chairman of OgilvyOne's British operations. “Search engine marketing continues to gather at a pace. Direct response television is still a tiny part of the market, but more and more advertisers are experimenting. They should, as the audience for certain products — cars, financial services — is already there.”

The agency's highlight last year: Wimbledon. OgilvyOne clients IBM and American Express sponsored the event. For IBM, the agency got real-time “Transvision” feeds of live scores to digital poster sites at London train stations. TV Wimbledon also was beamed into specially sponsored taxicabs around the tennis courts. A Web site and banners supported the effort.

The American Express work promoted “Wimbledon in the city,” a temporary tennis court at London's Tower Bridge. Charge card members and prospects were invited to watch tennis stars play live in the center of London.

As in the United States, interactive marketing is set to take center stage this year in Britain.

“I believe we'll see some significant advertisers eschew traditional media altogether,” O'Donnell said. “Too many digital brand marketers recruited traditional packaged goods marketing executives into chief marketing officer roles, and their choice of media selection has been somewhat mystifying. I sense that in 2005 they're going back to follow their audiences and get back into digital territory.”

The move from traditional to Internet marketing also is evident to O'Donnell's junior colleague, Mike Dodds, managing director of OgilvyOne London.

“We're seeing a significant growth of targeted e-mail campaigns at the expense of direct mail,” he said.

Digital printing is taking mail personalization to a new level in Britain.

“The year 2004 was … when these campaigns stood out from the norm,” Dodds said. “This year, they'll be the norm. We're all familiar with direct marketing being used in a highly targeted way. I believe that we'll see more and more low-cost direct marketing being directed at mass markets via mail and door-drop.”

Germany continues driving toward integrated media. E-mail, mobile devices and search marketing will grow more important this year. Rich media via videos and audios using emotional and storytelling techniques no longer will be about providing only information.

“We expect budget shifts from above- to below-the-line,” OgilvyOne Germany CEO FranzJosef Rensman in Frankfurt said. “We'll see more campaigns on the Internet. Agencies also are improving their creative product.”

In Spain, typical acquisition actions rely on mail and e-mail to drive traffic to a telephone number or online for more information or to buy. Integrated marketing and the use of online media are up from a year ago, too. The trend is expected to continue this year.

“The concept of DM is going to be more open, including actions that we can call guerrilla that traditionally we didn't use in DM strategies,” said Mamen Lucio, director general at OgilvyOne's Madrid office. “We'll see more use of mass media actions as a direct response media with a strong call to action, and not just with the objectives of awareness and image.”

In Greece, direct mail and telemarketing, coupled with extraordinarily high use of SMS text messaging in promotions, are popular.

“What prevailed last year was the aggressive marketing of the 2004 Olympics' official sponsors, using all disciplines offline and online,” said Dimitris Paximadis, chairman of OgilvyOne in Athens. “This year, further emphasis on CRM, particularly in the retail sector, along with increasing business-to-business direct marketing, is the trend gaining ground.”

Direct mail remains the most popular consumer DM tactic in Japan. Marketers still use it despite sometimes better response from e-mail and lead generation banners. Mail is considered more cost-effective for conversion and finding quality leads. Lifetime value is better, too, once a customer is won.

On the BTB side, demand generation through banners is becoming trendy. Search marketing is making inroads, but not as much as in the United States.

Japan last year introduced the two-dimensional QR code. While a conventional barcode can contain information equal to about 20 characters, the new symbol can store up to 100 times that amount. The QR code can be read into the cell phone by taking its photo with a cell phone. They are then used as debit points when purchases are made from specially equipped machines. Consumers can sign up for lottery campaigns and coupons or pay for the services much easier than before.

“Telecommunications carriers and other businesses see the coded squares as ideal low-tech bridging media,” said Yoichi Kinoshita, executive director of consulting at OgilvyOne Japan K.K. in Tokyo.

Marketers also are eyeing China. E-mail and mail are becoming more mainstream marketing media. The country has nearly 100 million Internet users. Use of new technologies like EyeBlaster and Ooqa Ooqa are up, as are CPM deals on online portals. This is driving consumer brands to take the Web more seriously.

“Online advertising will take off massively in 2005, especially in terms of sophistication,” said Chris Reiterman, managing director of North China for OgilvyOne in Beijing. “China Post will continue to support commercial direct mail business. Financial services and the telecommunications industries will become key players for direct marketing. Automotive companies will use direct to fight for share as growth rates flatten out. General infrastructure for DM will improve.”

In Australia, direct marketing tends to be overused as tactical, broadcast-based vehicles to support mainstream messages. But this is changing with better understanding of DM's targeting capabilities. Use of location-based information on 60-inch plasma screens and touchscreen kiosks is up. Messaging changes based on day-part data and competitor activity. Intelligent use of radio frequency ID, purchase behavior and data capture are on the uptick.

“Changes to postal regulations are allowing diversity in terms of size and shapes of mail, which have also been grasped as a means of differentiation,” said Phillip Smith, managing director of Singleton OgilvyOne/Interactive, Sydney. “Data is becoming more high profile within executive management in organizations and more of a priority as mass-media prices continue to soar — price increases [are] expected to be double-digit again — and as channel fragmentation of broadcast and pay television escalates.”

DM has taken firm hold in Latin America. Even a small country like the Dominican Republic reports a massive use of e-mail campaigns. Suppliers compile online lists, but do not offer segmentation services. CPM is low, so e-mail has proven effective.

Last year, the Dominican market saw better integration between brand and DM campaigns. Direct and interactive became further entrenched in promotions and campaigns.

“I see our market making better use of traditional interactive pieces like banners and mini-sites and more use of the interactive medium in general,” said Tansi Santos, director of OgilvyOne/Interactive, Santo Domingo.

Use of online CRM and e-mail marketing was up in Mexico.

“However, there is little or no metrics behind campaign definition, which minimizes the success rate of campaigns,” said Delfina Flores, director general of OgilvyOne's Mexico City office. “Most of the CRM programs lacked a proper way of measuring results [because of] insufficient infrastructure or low human resources skills.”

Despite the obvious constraints, the use of SMS, loyalty schemes, campaigns to smaller groups and ROI-based marketing is rising in Mexico. And U.S. marketers may even look with envy at the two DM tactics most popular with their southern neighbor: e-mail and outbound telemarketing.

Mickey Alam Khan covers Internet marketing campaigns and e-commerce, agency news as well as circulation for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

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