S
ome of us believe with total conviction that direct marketing
should-must-lead the new interactive media into the 21st century.
Are we suited? YES! Will we be recognized? YES! Can we go it alone? NO!
There are new media and new direct response leaders with new techniques and technicians
offering us exciting new visual opportunities. Armed with an expanded form of our
persuasive dialogue, it looks like we're a natural for the Net, for all forms of
interactive media in fact. And now that our major direct response agencies are integrated
and branding-sensitive, it's helpful to take stock of their stands on the new interactive
advertising.
Who's out there doing what? Are we leading the way? And if so, which way are we going?
To help answer such questions, I talked with the interactive/new media heads at four of
our leading agencies: O&M Direct, Wunderman Cato Johnson, Bronner Slosberg Humphrey
and Grey Direct. Each of these agencies has its own division, department or company that
deals exclusively in new media which, translated precisely, cover the Net, CD-ROM,
diskettes, electronic mail, interactive TV-everything digital.
If you were puzzled about the Net or any of the new technologies, this may restore your
comfort level. But if you're complacent, this could also make you a little uncomfortable.
For starters, these interactive leaders are very enthusiastic and excited. I got a
strong sense they feel they're "where it's at" and that every bright young
person under 30 is banging on their doors.
One of them commented matter-of-factly, "Kids today don't know anything else but
digital." (If this is true, you can figure out pretty clearly how much time is left
for us print-types to catch up.)
On the other hand, none of them predicted the demise of traditional media like print or
direct mail. One sagely pointed out that television didn't kill off radio; it simply
offered more options. And although the World Wide Web is a powerful medium, we still don't
understand the value of such exposure or its long-term power.
Kathy Biro, president of Strategic Interactive Group, a subsidiary of Bronner Slosberg
Humphrey, heads one of the best-known interactive operations, thanks to its work for L.L.
Bean, House of Seagram, Kraft Foods, BayBank, AT&T and Harvard Business School
Publishing.
SIG sees itself as an agency that's leveraging its direct marketing experience to help
clients evaluate and efficiently exploit interactive media. Biro warns, "An effective
approach to investing in the new media is possible, provided companies focus more on
consumers and less on the enabling technologies."
Biro insists that to have effective interaction, the customer must be given a quality
experience that relies strongly on customer benefit exposition. The Net must provide this
rich experience, and provide it in many forms, instead of a linear presentation that ends
in offer, offer, offer.
She gives the L.L. Bean World Wide Web site as an
example. Bean provides a business without walls here, an experience in the outdoors, a
learning trip, a taste of the past and the history of the company in a variety of
self-contained modules with a highly developed but easy-to-follow navigational scheme and
simple user interface that allows the prospect or customer to call the shots.
"...through the use of video, stills, animation and text, consumers could derive a
meaningful, highly 'Bean-like' experience...no longer verbal, but rather visual."
According to Biro, "the online revolution has been fueled less by the voracious
appetite for knowledge and data access than by the need to communicate, to stay in touch,
to meet like-minded others in the comfort of one's home, all under the cloak of anonymity.
Indeed, research indicates that the real drivers of the online revolution are boredom and
loneliness ....Those who succeed in creating true community will come to dominate the
interactive age."
The subject of "privacy" came up frequently in my discussions. It's crucial
that the new-media users learn how to demonstrate respect for the prospect and gain
approval to use his/her name.
This issue is paramount to the development of interactive selling, says Steve Carbone,
president of Grey Direct's Electronic (e.) Marketing company. Carbone feels strongly that
you should "pay" for a prospect's name by the delivery of value-added
information. If you give them good information, "people will be reasonable, willing
to answer questions as prospects." On the other hand, he allows that consumers should
be able to ask for information without use or capture of their name. One way to handle
this, of course, is to ask their permission.
Because the consumer is in control, picking and choosing products and services of
interest, a payback or "reward" is a good way to get involvement for inquiry
response (just as with direct mail).
For example, in creating a Web site for Quick
& Reilly Discount Brokers, Grey Direct e. Marketing used two media to provide an
interactive exchange. Following an electronic inquiry from the Q&R Web site, a
fulfillment package was mailed. It contained a CD-ROM of QuickWay Plus (product software)
as well as online access to give the customer support and more information. Carbone
believes that "Integrated marketing like this is the way to build brands through the
next five years."
Other interactive work with new-media clients like Chase Manhattan Bank, Seagram
Corporate Communications and the Direct Marketing Association demonstrates that direct
marketers "should be at the forefront of electronic marketing in maximizing its power
as a strong lead generator and customer server."
Greg Stuart, senior vice president and director of interactive communications for
Wunderman Cato Johnson, called interactive marketing an evolution of direct marketing. And
added that Wunderman was committed to utilizing interactive media to build long-term
relationships with the customer.
Although he agreed that the Web allows direct marketers to do things that used to be
just theory (like immediate data capture allowing merchants to track customer buying
cycles fast and accurately), he felt the customer service aspects, as they relate to
marketing loyalty, were the most exciting part.
Stuart sums up their experience with "the most exciting things we've found so far:
customer-acquisition programs implemented online at 50% to 80% the cost of traditional
media for AT&T...having 20% of a total marketing
program's members acquired online via Prodigy versus all the other media...sweepstakes
entries via the Internet that beat traditional media 3-to-1. [Total entries were
30,000.]"
Ogilvy & Mather Direct's Mike Troiano (CEO of subsidiary Ogilvy & Mather Interactive) also sees the customer
as the central figure and believes the new media allow the development of more natural
relationships between brands and individuals. "The medium lets marketers and
consumers talk the way people are used to talking-one-on-one, in real time."
Troiano continues, "Interactive marketing is available like direct mail; not
intrusive, like television commercials. Imagine that moment of truth when the 'user'
decides whether to read or toss your direct mail. Now imagine that user needing to seek
out the mail and make 10 or 12 'open' decisions in a single session."
He explains that effective interactive marketing, which he calls "digital direct
marketing," is communicating, promoting and selling in a consumer-controlled
environment. The shape of the environment-its interplay-serves hypothetical users and the
server. Its success depends on the strategic creation of genuine user value for a defined
consumer group.
A good example of this is the ExpressNet area of America Online, which O&MI
developed with American Express. The market is techno-savvy, affluent businessmen. The
service is travel data. The business' objectives are: increase American Express
share-of-wallet, reduce the attrition rate of Cardmembers and increase average monthly
usage of the American Express card.
ExpressNet delivers value by providing, among other services, a searchable database of
hotels, restaurants and attractions in hundreds of cities all over the world. It offers
participants access to account information, the ability to buy products and make travel
reservations online plus information on different card products and services. ExpressNet
even provides a forum where Cardmembers can share travel experiences with one another.
While costs are low for American Express, this is perceived as a high-value service for
Cardmembers.
Results have been "extraordinary," Troiano says. "More than 100,000
Cardmembers registered for the service in its first six months of operation, and more than
15,000 new card applications from prospects have been received."
Some Points to Remember
These interactive leaders are working in media so new that "past history" is
last week; data grows with experience every day. You've just read what's new now. There'll
be more news tomorrow. Nevertheless, in my discussions with these interactive pioneers, I
did find agreement on certain points that will be important for us:1. The merchant user
of new media is not a pure advertiser (direct marketer or brand-builder), but a content
provider, building sites based on benefits of his/her product or service, helping the
customer to move freely and browse the site or sites.
2. The experience is the thing. To hold someone, this experience must offer customers
and prospects entertainment, information, education or other value. Customer benefits are
the basis of the experience, creating involvement that results in interaction, requests
for more information, actual purchases. And all the while, building image and awareness.
3. Interactive marketing is not linear. It does not necessarily start with a benefit
and move straight to an offer. The customer is in charge of the movement, the
relationship, and can move backward and forward, but within a carefully planned
environment.
4. The leaders who talked with me were impressed with the current low costs of the Net.
Although the jury's certainly out on this in terms of broader market reach and the
long-term value of such prospects/customers, the economics are impressive. "Half the
cost of direct mail for new customers"..."41% less than print, 63% less than
DRTV" for inquiries..."Costs practically nothing compared to
mail"..."Its primary challenge is economic."
5. Consensus is strong that relationship marketing will thrive on the Net, thanks to
its speed, low cost and convenience. "Direct mail is too slow for one-on-one. E-mail
is fast, lets you forge your own path." "You can't put a customer on hold and
let her listen to canned music." "Electronic billboards offer fast answers for
frequent customer questions." "Interactive can focus on customers' individual
needs, give immediate feedback." "Good for club fulfillment."
6. Although the growth of the Net and the World Wide Web is phenomenal, critical mass
is not necessarily around the corner. Kathy Biro put it well when she said that
"consumer acceptance of new technologies has historically been slow and cumbersome,
delaying anticipated profits by decades" and that "It's clear why consumers are
not clamoring for this technology; it's simply too much work."
7. In the foreseeable future, integrated advertising using all media, working together,
will become the norm. CD-ROM won't kill off catalogs, the Internet doesn't spell "the
end" for direct mail. And most of us may end up more integrated than ever before.
8. At present, business-to-business uses are playing a leading role in interactive
media, but experience in all areas will be crucial to understanding and preparing for
future market opportunities.
Now, where do direct marketers come in? Who are the teams that make up these new
interactive operations?
We're in the "mix" all right, but very young people who are also very bright
in digital technology make up an essential part of all the teams, as well. And direct
marketers are going to have to work closely with them. (P.S. They'll need us, too, as few
of these technologically savvy people are direct marketers in any sense of the word!)
But be warned. We're going to have to be flexible, more flexible (and young at heart)
than we've been before. And, by the way, if you're not a strong benefit seller and
experience creator, it's time to start working on it.
If your company is considering a major exploration of new media and direct marketing, I
also suggest you ask the DMA about the new AT Kearney Report, "Direct Marketing in
the New Media Age."
(March 1, 1996)
More DIRECT
