Rapid climb from Direct to Big Data Marketing

12 Jun,2013

 

By Ananya Saha

 

Direct/data marketing has evolved in the Indian market. Given that traditional media is getting expensive, are brands returning or increasingly considering the option? What are the challenges that this form of marketing faces, especially in India? Will direct marketing grow on a healthy path in the coming years? We ask industry seniors what they think.

 

Ajay Chandwani, Director, Percept Ltd

Direct Marketing first started as a coupon response action device in media like print and worked as a direct response to one to one communication. This extended to other media like radio, TV and today digital has redefined the potential of direct marketing. Classical direct marketing based its importance to developing one to one relationships with customers which evolved to CRM or customer relation management. It was the tool for high ticket consumer and service products like durables, cars, banks and credit cards.

 

Efficiency in results has always been a feature of direct marketing with pin point targeting its great advantage.

 

Brands are increasingly turning to direct marketing for more efficient returns on their marketing investment. Today’s engagement and loyalty models are based on the traditional direct response principles. Even Facebook and Twitter campaigns are inspired by the tenets of direct marketing.

 

The big challenges are:

a. Offline advertising is still needed to provide a cover to direct campaigns and this is expensive.

b. Response levels of success are small and maturity is needed from client users on the slow build up of sales through this route.

c. Databases are often not accurate and building accurate relevant data bases can be a tedious process.

d. The power and immediacy of mass media will always influence clients to treat Direct Marketing with a pinch of salt.

 

The age of Direct Marketing is finally here…never before has big data analysis and loyalty/engagement marketing provided such exciting ways to meet marketing goals. Indeed Direct Marketing has finally moved into a spot where the sun is shining on it brilliantly as the lines between Direct and Digital blur and convergence of media is taken priority.

 

Vikram Menon, Country Head, OgilvyOne WW

The recent years have seen huge changes in the Direct Marketing model in India. The Digital Era is here, led by technology, data, smart phones and social media. In many ways these are the perfect media for one-on-one Direct Marketing. We now have the ability to have real and relevant conversations with our consumers, an ability that we never had before.

 

Brands now have the tools to do the two things that make them successful in Direct Marketing – The ability to stay real, relevant & authentic AND the ability to give their consumers the platform to talk about them to the rest of the world. Brands today can look at customers and prospects not as just potential consumers but as a marketing channel by providing them the content and the platform to become true and vocal advocates.

 

The reason isn’t because traditional media is getting expensive, it’s because brands now realise that digital is where the customer lives. Whether its on computers, their tablets or their phones. The digital space also allows real-time interaction and conversation with customers and prospects.

 

It’s the lack of penetration and bandwidth. Just 15% of India today has access to the internet. And under 10% use smartphones. This coupled with the perception that digital should be cheaper.

 

Loyal customers today expect unrestricted & personalised access and conversations with brands they adopt and Direct Marketing and CRM is the way to do that. It’s inevitable that brands will begin taking Direct Marketing, Data and Digital extremely seriously. We’re seeing more clients everyday asking for Direct and Digital-led campaigns. Something that was just an add-on to a television or a print campaign a couple of years ago. And we do expect this growth to get stronger with more people having access to the Internet and Smart phones.

 

Satish Ramachandran, Sr Vice President Digital, Draftfcb Ulka Interactive

The principle of direct marketing is a one to one communication to an individual or to a group of individuals based on common factors vis a vis a mass marketing, its is now imminently possible to digital and web.

 

With the advent of digital medium, direct marketing programs have really evolved they are now easier to implement, sharper, smarter and measurable with quick turnaround times.

 

At Draftfcb Ulka Interactive we were amongst the earliest to set up a traditional direct marketing agency, we were among the earliest to realise the potential of the digital medium and developed skills, tools and processes to maximise the opportunities provided by this medium. We are able to target niche audience like CXO’s, HNI, B2B audiences etc. some of work have been recognized and have received industry awards as well.

 

In fact with some of our clients we work on a pay-for-performance model which is a win-win situation for all. Every medium has a role to play instead of thinking mediums we must think consumer, his habits and behaviour and evaluate touch points and apply accordingly.

 

It’s also important to set objectives and metrics both long term and short term. Marrying the two will result in identifying the mediums, its impact and response. While brands are increasing investments in direct marketing, it’s still a small fraction of overall marketing spends. Hence it’s not a significant spend. Few marketers are using direct marketing effectively others are still experimenting. But we there is traction now and most importantly marketers belief on this medium it will grow henceforth.

 

Direct Marketing is a scientific method and there are no quick and easy solutions. One has to be patient, test different scenarios and build the program over some time. Some of the biggest challenges we face are:

1. Databases: We lack organised databases vendors and whatever is there is suspect and mostly junk. A marketer has to build database and clean up etc., this hampers the quality of the program.

2. Metrics: Today the currency for mass media is accepted GRP’s and readership etc., so no one questions. Whereas in direct marketing once can measure 15 metrics. While it’s very exciting because data is available and everyone has his/her point of view. As a result brands are getting distracted and whole exercise is meaningless and confusing.

3. Commitment: Senior management has to get involved and it should not be seen as a short term tactical activity.

4. Remuneration: Direct marketing is high effort activity unfortunately the remuneration is not commensurate to effort. A good agency has to invest on tools, talent and technology. None of this is cheap. Direct marketing will grow faster than mass marketing as more and more consumers are using digital devices and accessing the net, we also believe that the younger generation spends more time on digital domain than mass media. Thus marketers are now realizing the value of direct marketing and the investments in direct marketing are growing. in some of the western markets 40% of marketing spend is on direct marketing we are 2 – 7% range.

 

Kunal Jamuar, Executive Director, West, Havas Media India

Direct marketing is today a technique increasingly adopted by brands across scale to talk to their potential customers. It is no longer the tool of only niche or small scale brands. Improved technology allows more targeted communications to isolated audience segments over plain vanilla blanket emailers in data marketing. We also see the language evolving – it is not only direct mailers but also local theatre, competitions, events, etc ; even in regional markets for a large scale brand. It is increasingly becoming a considered tool for brand marketing.

 

It is a tradeoff between scale and cost per contact. Mass media certainly has a vital role in brand messaging. However direct marketing is perceived as being easier to gauge or test the response in real time but is a more expensive process. Niche brands use the direct route more frequently but we are increasingly seeing mass brands also adopting this format to a particular segment of their audience or a particular locale. The richness of the engagement contact and context makes it a valued proposition. It is expensive in the sense of cost per contact reach and resulting ROI from it. Also TG selection must be spot-on and then you need to collect a critical mass of TG at one point for the activation.

 

Then the vastness of India’s culture needs customized messaging to relevant TG , the one size fits all does not always work. For mass brands with scale this could be a greater challenge.

 

Yes, certainly direct marketing when used correctly is an arsenal for a brand. With the number of growing products and services this has the scope of creating immediate experience recall. It will increasingly become an essential part of the marketing mix especially for certain brands or their customers.

 

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