Direct marketing
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Direct marketing is a sub-discipline and type of marketing. There are two main definitional characteristics which distinguish it from other types of marketing. The first is that it attempts to send its messages directly to consumers, without the use of intervening media. This involves commercial communication (direct mail, e-mail, telemarketing) with consumers or businesses, usually unsolicited. The second characteristic is that it is focused on driving purchases that can be attributed to a specific "call-to-action." This aspect of direct marketing involves an emphasis on trackable, measurable positive (but not negative) responses from consumers (known simply as "response" in the industry) regardless of medium.
If the advertisement asks the prospect to take a specific action, for instance call a free phone number or visit a website, then the effort is considered to be direct response advertising.
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[edit] History
The term direct marketing is believed to have been first used in 1961 in a speech by Lester Wunderman, who pioneered direct marketing techniques with brands such as American Express and Columbia Records.[citation needed] The term junk mail, referring to unsolicited commercial ads delivered via post office or directly deposited in consumers' mail boxes, can be traced back to 1954.[1] The term spam, meaning "unsolicited commercial email", can be traced back to March 31, 1993,[2] although in its first few months it merely referred to inadvertently posting a message so many times on UseNet that the repetitions effectively drowned out the normal flow of conversation.
Although Wunderman may have been the first to use the term direct marketing, the practice of mail order selling (direct marketing via mail) essentially began in the U.S. upon invention of the typewriter in 1867.[citation needed]
The first modern mail-order catalog was produced by Aaron Montgomery Ward in 1872.[citation needed] The Direct Mail Advertising Association, predecessor of the present-day Direct Marketing Association, was first established in 1917.[citation needed] Third class bulk mail postage rates were established in 1928.[citation needed]
Direct marketing's history in Europe can be traced to the 15th century. Upon Gutenberg's invention of movable type, the first trade catalogs from printer-publishers appeared sometime around 1450.[citation needed]
[edit] Benefits and drawbacks
Direct marketing is attractive to many marketers, because in many cases its positive effect (but not negative results) can be measured directly. For example, if a marketer sends out one million solicitations by mail, and ten thousand customers can be tracked as having responded to the promotion, the marketer can say with some confidence that the campaign led directly to the responses. The number of recipients who are offended by the junk mail/spam, however, is not easily measured. By contrast, measurement of other media must often be indirect, since there is no direct response from a consumer. Measurement of results, a fundamental element in successful direct marketing, is explored in greater detail elsewhere in this article. Yet since the start of the Internet-age the challenges of Chief Marketing Executives (CMOs) are tracking direct marketing responses and measuring results.[citation needed]
While many marketers like this form of marketing, some direct marketing efforts using particular media have been criticized for generating unwanted solicitations. For example, direct mail that is irrelevant to the recipient is considered junk mail, and unwanted email messages are considered spam. Some consumers are demanding an end to direct marketing for privacy and environmental reasons,[citation needed] which direct marketers are able to provide by using "opt out" lists, variable printing and more targeted mailing lists.
[edit] Channels
Some direct marketers also use media such as door hangers, package inserts, magazines, newspapers, radio, television, email, internet banner ads, pay-per-click ads, billboards, transit ads. And according to Ad Age, "In 2005, U.S. agencies generated more revenue from marketing services (which include direct marketing) than from traditional advertising and media."[citation needed]
[edit] Direct mail
- See also: Direct mail fundraising
The most common form of direct marketing is direct mail,[citation needed] sometimes called junk mail, used by advertisers who send paper mail to all postal customers in an area or to all customers on a list.
Any medium that can be used to deliver a communication to a customer can be employed in direct marketing. Probably the most commonly used medium for direct marketing is mail, in which marketing communications are sent to customers using the postal service. The term direct mail is used in the direct marketing industry to refer to communication deliveries by the Post Office, which may also be referred to as "junk mail" or "admail" and may involve bulk mail.
Junk mail includes advertising circulars, catalogs, free trial CDs, pre-approved credit card applications, and other unsolicited merchandising invitations delivered by mail or to homes and businesses, or delivered to consumers' mailboxes by delivery services other than the Post Office. Bulk mailings are a particularly popular method of promotion for businesses operating in the financial services, home computer, and travel and tourism industries.
In many developed countries, direct mail represents such a significant amount of the total volume of mail that special rate classes have been established. In the United States and United Kingdom, for example, there are bulk mail rates that enable marketers to send mail at rates that are substantially lower than regular first-class rates. In order to qualify for these rates, marketers must format and sort the mail in particular ways - which reduces the handling (and therefore costs) required by the postal service.
Advertisers often refine direct mail practices into targeted mailing, in which mail is sent out following database analysis to select recipients considered most likely to respond positively. For example a person who has demonstrated an interest in golf may receive direct mail for golf related products or perhaps for goods and services that are appropriate for golfers. This use of database analysis is a type of database marketing. The United States Postal Service calls this form of mail "advertising mail" (admail for short).
[edit] Telemarketing
The second most common form of direct marketing is telemarketing,{[fact}} in which marketers contact consumers by phone. The unpopularity of cold call telemarketing (in which the consumer does not expect or invite the sales call) has led some US states and the US federal government to create "no-call lists" and legislation including heavy fines. Marketers call telephone numbers. This process may be outsourced to specialist call centres. The agents sit at computerised work-stations and try to sell the products of the clients.
In the US, a national do-not-call list went into effect on October 1, 2003. Under the law, it is illegal for telemarketers to call anyone who has registered themselves on the list. After the list had operated for one year, over 62 million people had signed up.[3] The telemarketing industry opposed the creation of the list, but most telemarketers have complied with the law and refrained from calling people who are on the list.[citation needed]
Canada has passed legislation to create a similar Do Not Call List. In other countries it is voluntary, such as the New Zealand Name Removal Service.
[edit] Email Marketing
Email Marketing may have passed telemarketing in frequency at this point,[citation needed] and is a third type of direct marketing. A major concern is spam.
[edit] Broadcast faxing
A fourth type of direct marketing, broadcast faxing, is now less common than the other forms.[citation needed] This is partly due to laws in the United States and elsewhere which make it illegal.[citation needed]
[edit] Voicemail Marketing
A fifth type of direct marketing has emerged out of the market prevalence of personal voice mailboxes, and business voicemail systems. Due to the ubiquity of email marketing, and the expense of direct mail and telemarketing, voicemail marketing presented a cost effective means by which to reach people with the warmth of a human voice.
Abuse of consumer marketing applications of voicemail marketing resulted in an abundance of "voice-spam", and prompted many jurisdictions to pass laws regulating consumer voicemail marketing.
More recently, businesses have utilized guided voicemail (a application where pre-recorded voicemails are guided by live callers) to accomplish personalized business-to-business marketing formerly reserved for telemarketing. Because guided voicemail is used to contact only businesses, it is exempt from Do Not Call regulations in place for other forms of voicemail marketing.
[edit] Couponing
Couponing is used in print media to elicit a response from the reader. An example is a coupon which the reader cuts out and presents to a super-store check-out counter to avail of a discount. Coupons in newspapers and magazines cannot be considered direct marketing, since the marketer incurs the cost of supporting a third-party medium (the newspaper or magazine); direct marketing aims to circumvent that balance, paring the costs down to solely delivering their unsolicited sales message to the consumer, without supporting the newspaper that the consumer seeks and welcomes.
[edit] Direct response television marketing
A related form of marketing is infomercials. They are typically called direct response marketing rather than direct marketing because they try to achieve a direct response via broadcast on a third party's medium, but viewers respond directly via telephone or internet.
TV-response marketing--i.e. infomercials--can be considered a form of direct marketing, since responses are in the form of calls to telephone numbers given on-air. This both allows marketers to reasonably conclude that the calls are due to a particular campaign, and allows the marketers to obtain customers' phone numbers as targets for telemarketing. Under the Federal Do-Not-Call List rules in the US, if the caller buys anything, the marketer would be exempt from Do-Not-Call List restrictions for a period of time due to having a prior business relationship with the caller. Major players are firms like QVC, Thane Direct, and Interwood Marketing Group then cross-sell, and up-sell to these respondents.
[edit] Direct selling
Direct selling is the sale of products by face-to-face contact with the customer, either by having salespeople approach potential customers in person, through indirect means such as Tupperware parties.
[edit] See also
- Direct response marketing
- Database marketing
- Direct mail
- Customer relationship management
- Direct Marketing Associations
- Personalized marketing
- Johnson Box
- Predictive analytics
- Telephone Preference Service
- National Do Not Call Registry
[edit] References
- ^ Entry for junk, Online Etymology Dictionary. Retrieved February 19, 2008.
- ^ Origin of the term "spam" to mean net abuse, Brad Templeton's website. Retrieved February 19, 2008.
- ^ National Do Not Call Registry Celebrates One-Year Anniversary, Federal Trade Commission, June 24, 2004. Retrieved February 19, 2008.
[edit] External links
- donotcall.gov To Register for the U.S. Do Not Call list
- Site for consumers from the U.S. Direct Marketing Association
- Junkbuster's How you can gain control of your mailbox_Encyclopedic information and effective advice for consumers
- USPS Form to block any junkmail (United States) (PDF file)
- Privacy Rights Clearinghouse - information on how to reduce junk mail.
- Direct Marketing in the Yahoo! Directory
