Visibility

Being online has rapidly become the center of our universe.  And why not?  There you can literally do anything and everything: watch tv, shop, network with colleagues, listen to the radio, converse with friends in foreign countries, even live a completely alternate, virtual life — and you could do it all at the same time if you wanted.  Couple this digital, constantly connected reality with recent changes in the economy, and the way we do business has changed forever. 

At this moment we are witnessing some aggressive paradigm shifts.  We know the economy has forever changed, but we are also watching the shift in dollars from advertising to marketing, specifically to direct response marketing and direct channels.   We are also seeing a shift within direct marketing from the traditional channels like mail, catalog, and telephone, to the new media channels like email, search, social networking, and mobile.  Right now the very nature of how people are using direct marketing is fundamentally changing.  Marketers are going through a structural resetting of an understanding of how to use direct marketing in the context of a 21st century, multichannel, multimedia marketing campaign under the guise of very limited resources. 

Challenging?  Yes.  However, it is important to remember that every challenge fosters ingenuity and creativity, and offers a unique opportunity to overcome.  Marketers and all savvy business people know in order to be truly successful and overcome, even in a down economy, you have to see where the money is moving and then learn how to follow it.

I have a saying that there’s this inexorable march of the billions from advertising to marketing, and that’s in fact true, the balance has fully tipped in the US.  Today’s estimate is about $177 billion dollars are spent in direct marketing related media spend and about $162 billion are in the traditional broadcast, television, newspaper, and radio.

Marketing dollars are still shifting from advertising to direct marketing and the use of new media channels will only continue to rise.  For 2008, an investment of $1 in direct marketing advertising expenditures returned, on average, $11.63 in incremental revenue. 

A shift in marketer focus from acquisition to retention also helped the tip from “above the line” to “below the line.”  It became more important to keep current customers than try to get new ones.  Marketers began to move their dollars from acquisition to retention and in turn, to low-cost digital communications like email.  Currently, the average return on marketing investment for email is $45.06 for every $1 spent.  That is just the average, which means the expert email marketers are seeing a much higher ROI.

DMA recently surveyed marketers and asked them to look ahead to the next three years to see how their media use will evolve.  The results clearly showed that marketers were using more digital media.

Eighty-one percent of respondents expected an increase in email.  They forecasted other digital media like Search Engine Marketing, online video, and mobile to see higher use as well.  Digital media scored very high in terms of efficiency, and email produced roughly twice (1.93x) the revenue share relative to its share of the budget.  As the attractive, popular, low-cost alternatives, the future will see all these channels grow further and give way to even more exciting possibilities like viral marketing and trigger marketing.

Today marketers are adding email and other digital media to campaigns in ever-increasing numbers.  Marketers are increasingly evolving to integrated, multichannel direct marketing, paying close attention that as they rebalance the mix of channels, they fully reflect today’s landscape.   

The integration of Web 2.0 opened a plethora of possibilities for marketers, most notably enabling them to create a real-time dialogue with each individual consumer, no matter of time or location.  The flexibility of the channel lets both groups work together to create content, generates leads, and make sales.  The Web also affords marketers unparalleled tracking opportunities and the ability to strategically monitor and evaluate each marketing campaign and its individual components.   It has progressed, transformed by wireless communications services, to mobile where we can now interact with anyone, at all times, and in all places.

Mobile is the fundamental enabling platform for the buyer/seller relationship of the future.  Right now there are well over 272 million wireless subscribers in the US alone, and well over 2 billion around the globe.  People, as well as advertisers, are taking notice — worldwide, mobile screens are more ubiquitous than TV’s and PC’s combined — there are 2.3 billion mobile devices versus the 1.2 billion TV’s and the 630 million PC’s.  Marketers will need to aggressively move spending into mobile in order to keep up and realize the true value of fully integrated, personalized one-to-one marketing.    

Besides Web 2.0, email, and mobile, other direct marketing channels and infrastructure services, like data analytics and CRM, will continue to grow and get stronger.  Analytics is the key to staying relevant, being responsible, and getting that desired result.   CRM, Search, etc. will have the same growth prospects as we continue further from mass advertising towards true, one-to-one direct marketing.

Today’s marketers, faced with unique challenges, are experimenting with channels as they strive to rebalance and find that perfect, 21st century mix.  When the economy finally turns around marketers should continue these types of experiments.  They often garner surprising results.  Marketers should focus on performance and improving digital channel integration — and they should most certainly continue the accelerated march of the billions.