Digital Attracts. DM Connects

01/02/2009

Uncertain economic times make it imperative that marketers know where their money is being spent and connect with customers in a very direct way. Individually, DM and digital do this very effectively but together they make a very powerful combination, argues Mark James, Client Services Director of digital consultancy Net Behaviour

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With sales declining and marketing budgets being squeezed, advertising effectiveness and accountability are high on marketers’ list of priorities. While traditional ‘brand-building’ media such as television will always be important, campaigns that combine digital media and DM offer a proven means of speaking directly to consumer and building on the existing relationship of trust.Read on...

Economic fortunes may ebb and flow but one constant is marketers’ ability to coin a term that captures a trend. A word being bandied around a lot these days is “cocooning”. It’s the idea of consumers retreating into their shells as their financial situation deteriorates and of their becoming more conservative in their buying behaviour. One indication of this is that consumers are tending to stick with, or go back to, brands or companies they trust.

One of the advantages of direct mail (DM) is that, at a time when consumers are feeling battered and bruised, it allows you, the brand owner, to reward them for keeping their business with you and nurture that ongoing relationship. Well targeted DM arriving through the right letterbox into the right hands has that feeling of ‘special’. It’s a unique piece of communication that makes people feel they’re getting rewarded for something, or being repaid for their loyalty to that particular company.

Now here’s a thought:

What if you could combine DM with a marketing channel that is similarly in tune with the times and equally effective at bonding with consumers? Which would you choose – radio? TV? Outdoor? Of course you could make an argument for each of these (and other authors in this series have eloquently done so) but, for my money, no channel works better with DM today than digital.

Of course, when you put the two side by side, it’s their differences rather than similarities that jump out at first – on the one hand, a paper-based medium that’s been around for decades; on the other, a paperless technology that many of its advocates consider to be modern, radical and empowering.

But the more you look at this odd couple the more complementary – and relevant – they seem, as the chill winds of recession sweep the land.

But first let’s take a closer look at digital.

While it is true that compared with the big guns – press, TV and radio – websites account for a modest share of the advertising cake, that share is growing fast. It is estimated that more than eight out of every 100 euro spent by Irish advertisers go on online media (including Google) – or roughly €130 million out of an annual total of €1.5 billion.

Digital’s growing appeal has clearly a lot to do with shifting consumer patterns. A few years ago it was possible to hit all your target audiences through traditional media but that’s arguably not the case now. If you look at 16 to 24-year-olds now, it is unlikely their main sources for news and entertainment are the old reliables of press, TV and radio. In the US – a very advanced market in terms of internet adoption – many of the newspapers are in crisis. And it’s not just because their cost base is too high; it’s also because their readers are moving online and not buying newspapers.

Despite these well flagged trends, it is fair to say that there’s long been some scepticism within the Irish market about the value of the online channel. It’s really only in the last two years that the wind has really got behind it as a marketing medium. Why? Perhaps because advertisers finally started to realise that digital is more accountable than other media – in terms of showing them what their advertising investment is actually buying – and allows them to recruit customers much more cheaply. In this sense, online seems to be particularly in tune with these straitened times.

But so too is DM.

And this is where the similarities between the two media, rather than their differences, come to the fore. Both DM and online marketing are personal, responsive, measurable and cost-effective. Moreover, as media from which to learn, both online and DM are out on their own. With DM, you get to learn people’s preferences and needs/wants by how they respond to what you’ve sent them. It’s a dynamic process: you learn from the response and adapt your pitch next time. The same applies to online marketing.

Moreover, both of these media are built on the twin concepts of service and trust – service in terms of market penetration and trust because consumers trust them to do something. You trust your supermarkets to honour the loyalty club vouchers; you trust the internet to help you book a holiday or buy a car, and so on.

A growing number of advertisers and brand owners across a number of sectors are seeing the merits of combining both media into a single integrated campaign. And the benefits can be significant. Recent research by Royal Mail in the UK found that integrating digital advertising with direct mail campaigns can increase customer spending by almost 25 per cent.

Integrated DM/digital campaigns are particularly good at selling a message or idea

Worldvision, the charity, did this very successfully with its community-gift scheme which ran at Christmas. Online and DM were key elements in activating consumer response. The website allowed you to research the gift options, select a gift and finally to create a personalised card that would go to the recipient; the actual fulfilment of the personalised card was through the medium of mail.

Similarly, the customer loyalty programmes run by retailers such as Superquinn involve a clever interplay of digital and DM. The early days of Superquinn’s Superclub programme in the mid-1990s involved sending out vouchers and reward points to a database of loyal customers. But as internet use grew, the retailer began to integrate the web more and more into the programme so that today customers can go online to check for special offers and the number of reward points they have, as well as do their shopping, of course, while the actual delivery of the ‘value’ is through DM.

Superquinn's current healthy-eating initiative, ‘Eat Better’, also successfully combines both media – via a website that delivers nutritional advice for consumers and DM sent to target groups of customers, which reinforces the health message.

Such cross-media programmes can be seen in the FMCG area, too

An example is Unilever Ireland's decade-old consumer loyalty programme, ‘Living’. The DM part is Living, a customer magazine containing information about various Unilever brands such as Lynx and HB, and special offers that are dispatched to some 70,000 customers. The digital piece is livingonline.ie, a website that has much of the same content, plus an interactive element. Given that retailers are usually said to ‘own’ the customer, Living/Living Online is a clever way for Unilever to bypass the retailer and connect with end users of its products via online and offline channels.

The fact that such marketing institutions as Superquinn and Unilever are integrating DM and online says something about merits of this combination. My feeling is that, as recession bites, a lot more organisations will be following their lead in the coming months.

Mark James is Client Services Director of digital consultancy Net Behaviour

This article is part of a series commissioned by An Post in partnership with Marketing Magazine.