2.  Once the ugly stepchild of marketing, DM now garners 25% of US marketer’s budgets surpassing newspapers and broadcast TV  Direct marketing started fairly simply with early American colonists ordering seeds and other products not available in the Colonies.  Rural America has always favored direct marketing to enable access to everything from prefab homes and barns to clothing.

3.  90% of marketers, agencies and other providers use non-catalog direct mail and 46% state it is their primary promotional channel  Direct mail remains the primary tool $44.8B projected for 2013  Total direct and digital marketing to increase 5.9% to $137.2B

4.  Direct Mail is expected to fall 39% in the next 5 years as email begins to eclipse direct mail (to $29.8b)  Local use of email really anticipated to grow because cheaper and growing actual (and perceived) effectiveness

5.  Direct mail — yes junk mail via snail mail — still reigns supreme, offering response rates of 1.1 to 1.4% versus 0.03% for email, 0.04% for Internet display ads, and 0.22% for paid search. May 2013  Sixty-six percent of U.S. consumers and 49% of U.S. marketers believe television commercials are significantly more important and effective than online advertisements. June 2013  Direct mail has a better response rate than email — 25 percent vs. 23 percent — but direct mail costs about 100 times as much according to the Harvard Business Review. June 2013

6.  Direct Marketing today is at the center of a communications revolution › The Internet is now the essential tool and an essential part of everyday living › Marketer’s now demand their funds are used efficiently to provide customer centric communications › ROI is demanded

7. So what is direct marketing exactly?  The interactive use of advertising media to stimulate an immediate behavior modification in such a way that this behavior can be tracked, recorded, analyzed, and stored on a database for future use and retrieval.

8.  Interactive – One on one communications between the marketer and prospective customers/consumers. Two way interactions are the building block of DM  Use of Advertising Media › Combination of various media complements the overall effectiveness of the marketing efforts  Track, Record, and Analyze › Measurability is the hallmark of DM. Marketers now demand it!  Stored in a Database for Future Use and Retrieval

9.  45% of marketers cite email as the channel they use most to connect with brands they trust, and 49% of non-smartphone consumers and 36% of smartphone consumers say the same. [However], marketers are much more likely to make a purchase after receiving an email (93%) than consumers (49%). February 2013  79% consumers act on DM immediately. 45% act on email immediately

10.  Seeks to generate a measurable response to an offer › A call back, an order, website research  The organization wants to generate leads and encourage relationship building  Elements of Promotion › Copy 15%List/Media 40% › Timing 10%Offer 20% › Layout/format 15%

11.  Media/List › One of the keys to producing a response  All a matter of exposure  Segmenting and targeting vital  Getting together the buyers/sellers  Media mix vital – TV, radio, Internet, newspapers Geography, demos, psychographics › Offers  Relevance to TM vital; motivation important  Expenses lower than advertising so offers and incentives can be more generous

12. › Creativity  Copy - compel me to respond  Benefits, description, support copy and facilitators or sweeteners  Layout – enhance eye flow patterns, easy to read and process, highlight significant items and tell the story

13.  Do you attempt to capture a certain % of the market share or a % of your segment?  Many direct marketing products experience different product life cycles › Changes media and offer strategies  New Objectives › Building and maintaining customer loyalty › Costs 5-10x more to generate a new customer than retain › 90% of profits from 10% of customers – Olgilvy › Reducing customer defections by 5% could increase profits 25-85%

14.  One to One – › Direct interaction with the individual customer › ‘Mass’ Customized treatment of the consumer › Difference with Direct Marketing is how solutions are approached › Enables information collection and insight › Enables creation of products for the consumer  Direct Marketing › Traditionally behaviorists › Results oriented (the sooner the better) › If you buy outdoor equipment, sell the lists, bombarded with catalogs!

15.  Phase One – moving away from mass marketing messages … one commercial for everyone watching a particular program (TM)  Identifying customer segments and sending messages per segments  Integrating DM into an overall communications program › First understand insights and consumer motivations › Matching audiences, media and technologies avail › Generate effective messages per audience

16.  Recent results show that email metrics remain strong › Click rates (5.2%) declined slightly over last quarter but remain in line with same quarter last year › Average volume per client increased by 16.2% from Q1 › Unique click conversion rates increased 14.6% over Q1 2011.  $163B spent in 2011 on DM; 168.5B forecast for 2012; produced $2.05 trillion in sales  Captures 53% of advertising expenditures  $1 investment in DM yields $11.63

17.  Postal Mail Advertising (p-mail) – any advertising matter delivered by the USPS to the person to be influenced › Catalogs, letters, postcards, programs, DVDs, order blanks, menus, etc.  B2B heavy users of p-mail › Rising cost of TV (and less for $) › Unparalleled targeting of messages › Measureable results

18.  1. Zygna (poker) on track to spend $200M in advertising and marketing mostly on FB  2. Fab.com – Fab’s FB page has 656K likes  3. EA(Electronic Arts) $2.75M on just one title  4. Proctor and Gamble believes it can generate $500M in sales from FB and other social media  5. AT&T – developing apps to allow bill payment  6. American Express FB app “Link, Like, Love” link am exp cards to FB account and receive for Dunkin Donuts, Virgin Atlantic, Whole Foods

19.  Promotes money literacy

20.  7. Experian – see previous slide  8. Groupon - Groupon/AdParlor has an exclusive contract that represents tens of millions of dollars in spend, as Groupon uses Facebook ads extensively to drive email signups and sell daily deals 9. Walmart – company has a FB page as does each individual store!Groupon uses Facebook ads extensively  10. Microsoft -Microsoft, of course, used to serve all Facebook's ads until the social network took control of its own ad serving.used to serve all Facebook's ads  The company continues to provide Facebook with search services, and historically it has had a search affiliate advertising agreement with Facebook.search affiliate advertising agreement with Facebook

21.  Targetability – precisely targeting a defined group of people. Example, Saab selected just 200,000 consumers to receive mailings on the Saab 9-5. These included 65,000 current Saab owners and 135,000 prospects who satisfied income and car ownership requirements.  Measurability – how many mailings went out, how many responses; one downside is that sending a message to a household does not guarantee the target will receive it

22.  Accountability – easy to assess outcomes for brand manager  Flexibility – quick and easy to change with environmental factors  Efficiency – targeting saves money over national ads

23.  More than 10 billion distributed annually in US  More than 2/3 recipients visit company’s website  Sales to catalog recipients more than 150 times greater than those not receiving the catalog  Marketers look at them as an effective and efficient way to reach prime prospects

24.  Saves time – no parking spot hunting, travel, in-store crowds  Convenience – 24/7 browsing, decision making and ordering  No concerns about crime in certain areas  Liberal returns, online purchases accessible, 800 numbers enhance ease of shopping experience  Quality merchandise  Guarantees

25.  Videotapes, DvDs CD-Roms › Capture key visuals and audio information about the brand and distributing this information to business consumers and end users to project on computers or tv › Limited research on this form of marketing  Yet often the result of requests to the company enhancing targeting and effectiveness  Some evidence less likely to be thrown away vs p- mail › Expensive unless can lead customers to online downloads

26.  Access to database information of addresses, email contacts and phone information essential to the success of direct marketing campaigns. › Additional pertinent demographic information necessary to best target  Comparison to mass media advertising › “Broadcast media send communications; addressable media send and receive.” Shimp 2012.

27.  Dmdatabases.com › Consumer Mailing Lists › Business Mailing Lists › Email Lists › Telemarketing Lists › Specialty Mailing Lists  B2Blists will be smaller than B2C but companies seek to provide maximum data possible

28.  Allows firm to identify the best prospects for products and services  Allows varied messages to different groups of customers  Enables the creation of long term relationships with customers  Enhances advertising productivity  Enables calculation of lifetime value of customers

29.  Sizes range into the millions of addresses with dozens of input variables for each entrant  Inexpensive software allows the segmenting of entrants based upon variables of interest › Relations among variables to enable co-op marketing › Depth of understanding in buyer wants, purchases, uses