Design by platform and gamification are helping direct hit its targets, despite its data problems
Taming the Big Data Beast is the #1 thing practitioners
mention when asked to identify the trends in direct response marketing.
What direct response actually is these days ranks as #2.
For the purposes of this discussion, we’re using a wide-ranging definition that encompasses anything a marketer does with the hopes of stirring active engagement and participation by the consumer. That includes email, social, mobile, certain forms of display advertising, search and even direct mail.
Now, about that dinosaur direct mail …
There have been rumors of physical mail experiencing a revival due to its sheer novelty factor, but no compelling evidence exists to show marketers are returning to a vehicle that rises in cost and yields a diminished return on investment.
“I don’t get into any conversation these days where a client is saying we have to do more mail,” says William Burkart, vice president of Acxiom’s global agency services in the San Francisco office. “The only think keeping direct mail at its current levels is having no opt-in email address.”
Deliverability also has to be a concern for any direct mail-dependent company as the cash-deficient u.s. Postal Service contemplates a 5-day delivery week. And with Uncle Sam looking to trim costs, it’s hard to imagine the government won’t take some kind of action within the coming year or two on the long-subsidized bulk mail rates that make direct mail campaigns viable.
Let’s Get Back to the Big Data Beast.
The multiplicity of channels producing a firehose of data sounds like an opportunity for marketers to gain insights to use for product development and integrated messaging. But it’s still a far cry from fairy tale to reality.
Taming really means capturing, sharing, then figuring out how to glean true insights and ask the right questions. There is such a thing as optimizing for the wrong variables.
A recent CEB study of nearly 800 marketers at Fortune 1000 companies found the majority still rely more on intuition, using data for just 11 percent of all customer-related decisions. And those who do use data, the study found, are likely to do it badly or too aggressively, adjusting for every little blip in the data.
“How do I figure out what to do with data? How to manage it and drive insight?” asks Acxiom’s Burkart.
For as long as there’s been talk over the past few decades of “one-to-one marketing,” there’s been acknowledgment of silos, turf battles and an inability to ask the right questions, says Jim Sterne, founder of the eMetrics Summit.
Amazon, Dell and eBay are doing it well, says Sterne. Ecommerce companies have a leg up on brands because they have the direct relationship with their customer and are often organized to maximize data.
“Then someone like p&g has so many different products and data collectors, they’re never going to get it together,” Sterne adds. But they’re not alone. Mid-size companies actually stand a better chance of making it happen.
“Things get bogged down in reality. Implementation, integration and who’s going to pay for it. It’s months on end,” says Sterne.
Still, the promise of merging all sales, marketing, and social media data into one actionable pool to implement solutions online and offline remains a goal.
“If I’m able to tame the big data beast so I can connect my offline data with my real-time data, I’m way ahead of the pack,” says Michael McLaren, president of mrm East and chief client solutions officer.
People Are Players and Gamification Techniques Will Continue
Gabe Zichermann, ceo and founder of Gamification Co., is the source authority on the technique.
The drive to gamify all kinds of marketing is driven by the need to achieve scale — principally through the use of virtual rewards and viral customer acquisition.
As the world gets more game-like and interruption-driven, it becomes ever more important for direct marketers to learn the techniques of games to cut through the noise and engage.
“What’s emerging at the intersection with gamification are smarter contests, smarter sweeps and interesting pivots that use social media in concert with game dynamics to drive cheaper (and more viral) results,” Zichermann says.
Ford’s Facebook-focused campaign for the tv show Escape Routes is a good example of the concept, he says.
Overreliance on badges is tapering off, Zichermann says, as marketers understand this recognition technique is no longer sufficient to drive consumer engagement.
According to calculations by the Gamification Co., gamification is on target to hit $2.8 billion in direct spend by the year 2016.
Instant gratification will get more instant, says McLaren, of mrm.
Design By Platform Becomes Even More Important
It’s no longer ok to wing it for mobile. As consumers use mobile devices increasingly to make purchases, as well as consume content, optimizing the experience on each device is no longer an option.
While clicking on mobile ads isn’t expected to go anywhere soon, using mobile apps to make purchases is becoming mainstream.
In some cases, the technique of responsive design is being used to create all platforms at once, starting with the most important elements visible on mobile and working back to the full website.
The new Starbucks website is an example of responsive design in action.
During the Olympics, smart devices were a major platform for downloading video. According to comScore data, 60 percent of visits to the official London 2012 Games website and apps came from mobile devices and 45 percent of nbc video requests came from mobile. In 2012, consumers will watch 30 billion hours of video, McLaren notes, and there is an opportunity here for dr messaging in the right context.
Building the entire experience around the device and not only customizing intent demonstrates respect for the consumer, McLaren says. “Respect my time and my business. As smart phones become the lingua franca of the web and primary communication tool, a lot of people will be predisposed to act. If you can hit it, wow, it’s a big bang.”
Triggered email and personalization
What data should be doing is allowing better forms of marketing — as in triggered emails and personalization. As marketers develop a more comprehensive understanding of behavior patterns, it is possible to target email campaigns to recent actions and activities.
With email being so cheap, there was little motivation to target. But given response rates falling because of massive clutter, the trend is away from volume and using data to know more about the email recipient and more targeting.
“We can now include social data,” says Burkart. “If I know I have a more brand-loyal recipient, I know my success will be higher (based on number of likes, tweets, favorable mentions across the ratings engines.) So if I pick between you getting it and Jeff, if I know Jeff and his social profile, my chances are better. I know my index. Do I know your age, income, home status, value of home, etc.?
Across all the emails Acxiom has launched, it has just crossed the 50 percent mark for email being opened on mobile devices — smart phones and tablets. And the ability to optimize is better than ever.
“Now we can send an email on a Monday morning in a structural test for subject line, content, call to action and creative. With all these test cells triggered, within an hour the system can determine and continue to run the winning campaign. It’s a major driver for efficiency,” says Burkart.
Social graph data incorporating an individual’s friends’ interests gives marketers an opportunity to create targeted messages that encourage customers to share with friends via email or on social posts.
Younger consumers are more comfortable with the implicit commercial trade-off between giving out data and receiving something they want in return. Personalization is fine so long as it doesn’t get too creepy.
Some categories — such as health — may be ones where recipients never become comfortable receiving customized ads and alerts. Hello, cancer patient.
Integration of Messaging
In an ideal world, messaging will be integrated whether tweet or text or display ad. But it’s tough to do in a real-time environment.
“Social and mobile has everyone’s attention right now,” says Jim Sterne. We want to reach out to our shoppers omnivorously.
It’s a trend called omnichannel or transmedia. It’s storytelling.
“If there’s a new movie coming out, you want to make sure the characters in your story are tweeting and blogging,” Sterne says. “People use iPads to read reviews. They don’t think of the iPad as a channel.”
It is now technically possible to tap all sources based on how you arrive at a site and click around what you say and what they are saying. You can give your messaging more relevance through machine learning.
Runa, for instance, is one company that delivers the most profitable automated real-time offers by leveraging big data and predictive analytics.
Sterne says he saw a system recently that analyzes websites for keywords and automatically generates content on the fly for a category you didn’t even know you needed.
Burkart says data management platforms (DMPS) are really the next great breakthrough in targeting. They allow you to gather landing page, clickable banner visits and website Facebook likes. All those disparate data points are being gathered in a compliant way, he maintains.
Responsive Design and Designing for Device
Not only do things look different on different devices and multiple screens, the way people use each one alone and together requires a different approach to design.
Another major trend is responsive design where things automatically configure to look right on the device you’re on.
The Emergence of SEO-cial
“Search and social components are becoming seo-cial because you really can’t have success in seo without some social component,” says Marc Engelsman, director of strategy and client relationships at Digital Brand Expressions, which is agency of record for sempo’s social media programs.
Search Retargeting will Continue
While search was historically a direct response tool and display was on-direct response, that has changed with the big trend of personalized retargeting. If I go to Zappo’s and look at black patent leather shoes, suddenly those ads appear everywhere.
Google’s revision of its privacy policies earlier this year will now allow them to store data across its entitities. That has big implications for search retargeting, says Antony Chen, who was in the Yahoo Response advertising division, and now works on a startup he says will marry online data with offline.
Facebook’s introduction of ads based on cookies will also make that a viable direct response advertising channel for the first time, Chen says.
Continued Push to Mobile
To what degree is sms or text a viable marketing communication? Contextually it can be for relationships versus prospecting. Text is going to become an appointment arrow in the quiver of CRM.
Look at the presidential candidates, says Burkart. Opt-in push messaging is now the way many are finding out about vice presidential picks.
“Relationships via smart phones will definitely grow,” he predicts.
The Network of One
Digital natives have abandoned programming designed for them and are establishing their own personal networks.
It’s More About Context
Digital is a fundamental driver in the evolution of engaging with the customer base and has moved to more of a crm-driven richer customer experience. This combines offers with content and utility. Building loyalty and driving deeper engagement, says mrm’s McLaren.
The growing penetration of location-sensitive smart phones and gps enable the matching of offer with location. A sandwich shop that knows you’re around the corner has a new opportunity. This is just beginning to emerge in the u.s., but is more fully developed in Asia.
In Seoul, for instance, taxi drivers respond to text messages for service calls.
Is DRTV Dead?
Susan Rowe, president of Rowe Media Group, says a thread with that very title has been drawing responses like mad on a professional users’ group.
Her take: It’s still a viable channel for products targeting a demographic of 65 plus. But as younger viewers migrate to watching tv on the Internet, the costs for buying Direct response media don’t yet make sense.
On the plus side, the trend of multiple screen watching has created an interesting dynamic for drtv because response can now be tracked in minutes or seconds as opposed to hours or days, according to Core Media, a technology provider to the indsutry. This means marketers can accurately tie specific campaigns for producing visitors to a website or calls to a call center.