Feature

Direct Approach: Behaviour therapy

The MRM chief executive and head of planning believe direct marketing shops can steal a march on digital rivals by understanding consumers.

Direct is dead. Long live digital! We've been hearing this mantra for such a long time, it's frankly getting a little dull. If direct really is dead, why are we all here?

Well, there are a number of good reasons. Not least because direct agencies offer a strategy life jacket to today's digitally obsessed industry.

Among the hype surrounding the rapid growth of digital, many seem to overlook the declining response rates for online advertising. Recent analysis from Adtech shows online click-through rates in the UK declined from 0.33 per cent in November 2004 to 0.18 per cent in March 2007.

In the more mature internet markets of Finland and Denmark, response rates are even lower, at 0.11 per cent and 0.09 per cent respectively. A sobering insight into the future unless we all wise up.

One reason for this dismal performance is an endemic failure to follow the principles of direct marketing in planning, developing, running and monitoring online advertising. Cold e-mailing is already unusable as an acquisition channel, except for the porn industry, while banners are at risk of becoming the desktop equivalent of junk mail.

Direct marketing is all about driving behaviour; building profitable relationships with individuals based on an understanding of their needs and motivations; and identifying and targeting audience segments to provide relevant and compelling messages.

It is an approach, not a format, and its disciplines can be used across all media channels. Of course, everybody is claiming a piece of the digital pie, but DM agencies have the expertise to win over clients in this space.

Take direct targeting methods. Research into online advertising effectiveness shows that the placement of an ad has a far greater effect on response rates (150 per cent to 250 per cent) than creative (15 per cent to 40 per cent). Agencies that combine planning and targeting skills with excellence in creativity will produce the best results.

Resistance to advertising is the current industry hot potato. But direct marketing already has a powerful answer: the ability to use data to make messages relevant. And the more relevant the message, the lower the resistance is likely to be, whether through direct mail, online or TV.

With the advent of interactive TV, advertising tailored to individual households is a real possibility. Just imagine connecting the power of a TV ad with the precision of DM and the interactivity of digital.

In the future, the industry will have a single view of the customer across all channels. TV advertising will be informed not only by the specific television set on which it appears, but also by the online activity of the consumer being targeted.

The technology to do this online already exists, but the industry is not making the most of the opportunity. Why, for example, do people still get served ads for dating services on sites where they are registered as being in a relationship? These sites know who you are, which pages you go to most often and what you've bought before. In the data-rich online environment, we should be able to do something about this lack of relevancy.

As well as contextual targeting, DM agencies can also approach consumers based on their previous online behaviour, exploiting not just an inferred relevance, but an actual relevance. So, a consumer who has researched mortgage deals online might be targeted with DIY products by an advertiser that knows they are moving home.

The possibilities of such "behavioural targeting" methods are only really beginning to be leveraged in the UK. In the US, there are numerous studies showing how such techniques can increase brand metrics across the board, from awareness to purchase intent.

It stands to reason that this kind of activity would improve response: creating groups of people online with common behaviour patterns; and separating customers from prospects in order to reduce wastage. This is a far cry from the Wild West of digital, where anything goes - as long as it's using the latest formats.

In the days when agencies wrote briefs that asked "what do we want consumers to think?", the idea of shaping the customer experience was a distant dream. By replacing that question with "what do we want consumers to do?", agencies have made response and action important.

Now agencies can ask: "How long, and in how many ways, do we want consumers to experience our brand?" This opens up a world of possibilities, and makes now the most exciting time to be working in the industry. Why? Because in today's world of tuned-out consumers, bombarded with multiple advertising messages 24/7, a whole new approach is needed from brands.

To build long-term, profitable relationships with audiences, brands need to communicate in a way that involves the consumer in the end product. In other words, agencies need to adopt a "participation marketing" approach to get the best results for their clients.

And direct marketing is right at the heart of that. DM practitioners appreciate the importance of relevance and targeting; the idea of involvement and engagement; and the secret of getting people to act, as well as to think.

Combine that discipline with the creative expertise and energy of online practitioners - whether they be "interaction designers", "information architects" or "technical wizards" - and agencies have got something special in the making. So, long live digital. Or, rather, long live direct.

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