Chapter 23: Direct, Interactive and Viral Marketing

Direct Marketing

• Direct marketing generates $1.93 trillion in incremental sales

• Direct mail campaigns returned $15 for every dollar spent.

• 1.7 million direct marketing employees in the US, 8.8 million jobs that depends on DM.

• e-mail marketing investments provided a $51 return for every dollar spent in 2006.

• Direct marketing generates 10.3% of US GDP (Direct Marketing Association)

Forecasted Direct and Interactive Spending

Advertising budgets will remain flat, but the percentage of budget spent on these media is expected to grow from 12% to 29% of the ad budget by 2014. (Ad Age, 7/21/2009, “Advertising Will Change Forever)

Direct Marketing Definition

Direct Marketing

• Sending marketing messages directly to consumers (usually) without the use of intervening media> Delivering a message> To a targeted audience• When they are looking • Where they are looking• Speaking in a way that resonates with the target

> Prompting a desired action

Involves commercial communication, mainly: > Direct mail > e-mail > Telemarketing> Catalogs and mail order

Delivering a message

• Example

> Brand messaging • Using colors, logos to build brand awareness• Presentation of core messages in ad copy

> Benefits of a specific offer• Benefits and/or offer for product, service

To a targeted audience, when/where they are looking:

> Social networking (facebook, twitter, sermo)> Transportation (bus shelter ad, airplane seat-tray)> Trade journal> TV (time of day, programming)> Banner ads (google, nick jr)> Direct mail (personalized, non-personalized)> Door hangers> Package inserts> Pay-per-click ads> Voicemail broadcasting> Infomercials (DRTV)> Search engine optimization (maximizing hits)

Prompting a desired action

• Get the customer to:> Request information> Sign up to receive something> Purchase something> Apply for something> Go to a website> Call a number

• How do you tell if it is direct marketing or advertising?> Call to action is present—asks consumer to do

something other than simply process the information in the advertisement

Prompting a Desired Action> An Old Navy commercial presents information about the

brand and builds brand awareness (not direct marketing).

> Credit card ads almost always have a call to action (are direct marketing). 

> The Slanket and the Snuggie are classic direct mail TV commercials, as is the Soloflex gym. In general, infomercials like these are direct marketing.

> Local banks often have "take ones" (pamphlets) for credit card applications. These are direct marketing.

> Magazine and print: Makeup ads are usually focused on building brand awareness (not direct marketing). 

> Magazine and Print: Sleep Number Bed ads often have a call to action, directing consumers to a website or 800 number (are direct marketing).

“Standard” Marketing vs. Direct Marketing

Mass Audience & Media

Impersonal

Promotion Strategy visible

$$ Determines Promotion Amount

Target’s reaction unclear

Analysis at segment level

Surrogate Effectiveness Measures (awareness or intention)

Direct Communication/ Targeted Media

Personal (Name/Title)Programs “invisible”Can React to ResultsAction Specified and/or

measurable (inquiry/purchase)

Analysis at individual or firm Level

Measurable & controllable

Example

Evaluate Targeted Marketing

• Banner ad from Medscape:

> Message: Selling the opportunity to attend continuing medical education (CME) via the Medscape network

> Target audience• People that need CME credits• This population is very specific, they do not even define the

acronym here. They are advertising on a site often visited by health care professionals

• The Call to Action is to click through to access the CME activities.

Banner Advertisement from Kaplan SAT Prep

> Message: Selling online test prep> Target audience• People (likely 15-18 years old) who need to take the SAT and

need to improve their scores• Assume you know what the SAT is, show an example of the

support in place for training• The Call to Action is to click through to learn more.

Evaluate Targeted Marketing

• Here is an example of a banner ad from Coca-cola’s website

Evaluate Targeted Marketing

• Spring water example> Message• Selling a reassurance that the branded water you purchase

will be clean, safe, and natural• Selling the reliability of the Spring Natural brand

> Target audience• This target population is health-aware enough to be

choosing water over soda. They want to feel healthy when they are choosing this product (notice the supporting copy points).

• CTA: Here the call to action is less pronounced: key message is for the reader to feel better and trust more. The CTA is offered as an additional level of instilling trust, but it is not the goal of the banner to drive traffic to the CTA

Online Marketing

Why Online Marketing Works: Website Growth: 10 Year Timeline

Stickiness

StickinessStickinessA measure of a Web site’s

effectiveness; calculated by

multiplying the frequency of

visits times the duration of a

visit times the number of pages

viewed during each visit.

Stickiness = Frequency x Duration x Site Reach

For marketers today, three of the most important measurements of Web site hits are recency, frequency, and monetary value.

Online Direct Advertising

Companies use online advertising to target customers. These ads are unique in that the customer can take direct action in response to the ads by “clicking through”.> Banner ads> Pop ups> Rich media ads (incorporate animation, video, sound,

and interactivity)> Search-related ads: Specific ad comes up in response

to your search term. > Search engine optimization: Companies pay search

engines for higher placement on the solutions list for particular searches.

Online Marketing

Click-only companies: >Operate only online without any brick-and-

mortar presence.• E-tailers (Amazon.com)• Search engines and portals (Google)• Transaction sites (eBay)• Content sites (ESPN)

Click-and-mortar companies:>Traditional brick-and-mortar companies that

have added online marketing to their operations.

Online Marketing

Online marketing domains:>Business to consumer (Amazon)>Business to business (Staples)>Consumer to consumer (Ebay)>Consumer to business (Blogs, rating sites,

feedback sites)

Word of Mouth Marketing

Word of Mouth

• WOM spending grew from $76 million in 2001 to $981 million in 2006> Grow to $3.0 billion by 2013> 78% of respondents trusted “recommendations

from consumers”

• Word of mouth marketing can be:> Amplified> Organic

• Word of Mouth Marketing Association> www.widecircles.com

Word of Mouth Online

• Smirnoff Tea Party

• Rampenfest

• Coke and Mentos

• www.shaveeverywhere.com

• Brawndo

• The Hire Series from BMW: Ambush

• Lux Brand in Japan

WOM Categories www.womma.org

Buzz Marketing: Using high-profile entertainment or news to get people to talk about your brand.

Viral Marketing: Creating entertaining or informative messages that are designed to be passed along in an exponential fashion, often electronically or by email.

Community Marketing: Forming or supporting niche communities that are likely to share interests about the brand (such as user groups, fan clubs, and discussion forums); providing tools, content, and information to support those communities.

Product Seeding: Placing the right product into the right hands at the right time, providing information or samples to influential individuals.

Cause Marketing: Supporting social causes to earn respect and support from people who feel strongly about the cause.

Influencer Marketing: Identifying key communities and opinion leaders who are likely to talk about products and have the ability to influence the opinions of others.

Buzz Marketing

Unethical WOM Practices

Stealth Marketing: Any practice designed to deceive people about the involvement of marketers in a communication.

Shilling: Paying people to talk about (or promote) a product without disclosing that they are working for the company; impersonating a customer.

Infiltration: Using fake identities in an online discussion to promote a product; taking over a web site, conversation, or live event against the wishes or rules set by the proprietor.

Comment Spam: Using automated software ('bots') to post unrelated or inappropriate comments to blogs or other online communities.

Defacement: Vandalizing or damaging property to promote a product.

Spam: Sending bulk or unsolicited email or other messages without clear, voluntary permission.

Falsification: Knowingly disseminating false or misleading information. www.womma.org