The following is a recent commentary by Thomas Harpointner the CEO of AIS Media, Inc. (www.aismedia.com), an Atlanta-based, award-winning interactive marketing agency that was published in the Atlanta Journal-Constitution . He provides insight into the direction and opportunities that lie ahead for businesses on-line advertising.
Direct Mail, Other Selling Channels Are Giving Way To High-Tech Models
In 2010, 221 million people in the US will be online, representing approximately 71% of the total population. Those numbers are projected to grow to 250 million by 2014 – more than 77% of the total population.
Internet usage among consumers continues to grow rapidly, businesses are shifting their advertising budgets in epic proportions away from traditional channels such as direct mail, print, and television to interactive marketing channels such as websites, search engines, email, and social media. Interactive marketing is often less expensive, easier to measure, and proven to deliver higher ROI (return on investment).
This shift in business spending is fueling the interactive marketing industry to double by 2014 to nearly $55 billion dollars, which will represent 21% of all marketing spend, funneling budgets into search marketing, display advertising, email marketing, social media, and mobile marketing (according to Forrester Research).
The US Postal Service is being hit particularly hard. The Post Master General projects a $7 billion dollar loss this fiscal year and a potential accumulated loss of $238 billion over the next decade, attributing the losses to the massive reduction in direct mail advertising and the growing number of email users. Direct mail volume was 202 billion items in 2009. That’s 9 billion less than the year prior, representing the largest single volume drop in history.
What gets measured gets improved.
Since interactive marketing typically requires users to click on an advertisement, visit a website, or perform a targeted action, nearly all aspects of an interactive marketing campaign can be tracked, measured, and tested. Therefore, marketers can easily test various messages on a target audience, and optimize response rates and conversions. Such measurement cannot be achieved through direct mail, television, or billboard advertising, which–at best–can gain prospects’ interest to respond at a later time and typically in a different medium.
Email marketing for example, enables businesses to measure how many emails are sent, delivered, opened, and clicked. Search engine advertising makes it easy to track clicks. Websites can deliver marketers a wealth of valuable insight including the number of visitors, where those visitors originated (i.e. a search engine ad, and email ad, or banner ad, etc.) and which web pages visitors clicked. Armed with this type of data, marketers can make quick, incremental improvements to maximize their marketing ROI.
Interactive marketing can multiply traditional advertising ROI.
According to an IBM report on multimedia, “There is general agreement among researchers that people have short-term attention spans of about 20% of what they hear, 40% of what they see and hear, and 75% of what they see, hear and do.” Interactive marketing can fall into the 75% category because a website, for example, can contain written content, multimedia and engage the visitor.
Effectively integrating interactive marketing into a traditional advertising campaign can dramatically increase overall response rates, conversions and ROI (return on investment). For example, AIS Media’s 2010 Insurance Customer Interactive Marketing Usage Survey revealed that 59% of insurance customers would prefer to respond to a direct mail offer by visiting a website instead of calling a phone number. Therefore, providing customers the added option to visit a website can significantly lift response rates and measurability with minimal increase in marketing expense.
Although the concept of promoting a website in a traditional marketing piece is easy to understand and not new, an overwhelming number of marketers today continue to make the fatal mistake of directing prospects to their company home page. Since direct mail or print ads typically promote a specific product or service, prospects can easily be “taken off-path” or confused when directed to the company home page where they expect to see “more” about the promotion. Additionally, it’s difficult to track the effectiveness of a traditional ad when all traffic is directed to the same, non-unique page.
The better (and more measurable) destination of a direct mail piece should be a PURL (personalized URL). In essence, a link to a dedicated web page (landing page) designed specifically to correspond with the traditional advertisement, which contains a clear call-to-action (i.e. complete a request form, call a phone number, or make a purchase). PURLs and landing pages used in conjunction with direct mail, print, TV, or billboard ads can deliver powerful multi-channel marketing results.