The DM Essays: Ivan Palmer, the strategic planning director at Joshua

The first decade of this century is one of convergence, which means the communications industry must adapt to remain relevant, Joshua's Ivan Palmer argues.

The need to talk to smaller audiences with more specific messages is changing the nature of advertising. The adoption of direct media as a way of reaching distinct groups of customers with awareness, as opposed to responsive, propositions is changing the nature of DM.

The organisational shift of clients from product- and brand-driven to customer-driven is creating an identical agenda for all communications agencies, regardless of media.

It's time for integration to move on from making different things work together, to convergence, where everything works the same way. There is no line.

In an increasingly fragmented and pluralist society, delivering personal relevance is far more important to a brand than reaching the mass consciousness with common values.

To remain competitive, brands must wrap themselves around the differing motivations and needs of the patchwork of customer tribes that comprise their audience.

At a communications level, this means brands have to be more fluid and inclusive. They have to act selectively, delivering a variety of what we call customer value propositions rather than risk alienating valuable groups by blanket promotion of universal sales propositions, irrespective of how relevant they are.

In this new customer-centric world, advertising is the new DM, as are all media. The stage is set for direct marketing skills and techniques to enjoy their greatest moment. Will the direct business make the most of the opportunity?

In 2002, advertisers spent £2.4 billion on direct mail - 155 per cent up on 1990. This investment is conservatively estimated to have generated business worth £26.3 billion, delivering an return on investment of 1:14.

But is ROI the most single appropriate measure for mail media? The DMIS 2000 Response Rates Survey found that the primary objective of nearly half of all mailings (44 per cent) was awareness. In contrast, only one in eight DM campaigns were designed to drive immediate sales.

On the face of these figures, direct mail would seem to have finally left behind its reluctant heritage as a low-cost sales channel for product promotions, and arrived at its long-desired destination as a powerful brand medium for personal customer communication. Yet, in its hurry to get there, DM may be losing sight of what enabled it to make the journey in the first place.

In 1999, the average British household received 4.4 mail items a week compared with 0.7 in 1985; 64 per cent of these items were either not opened or not read; 3.4 billion mailers costing approximately £1.5 billion didn't persuade recipients to go any further than the opening salutation.

Open rates have fallen. Read rates have declined even faster. More people think DM is better designed but only 11 per cent believe what they are sent is relevant to them - hardly impressive especially when 9.8 per cent of direct mail is requested.

It's a similar story in business to business: 67 per cent of mailings contain at least one data error; £76 million a year is spent sending material to companies that no longer exist. On average, business-to-business data is 18 months old - a long time for business.

Direct marketers are at a crossroads. In one direction, the sector is perfectly poised: advertisers want to deliver specific personal messages to highly targeted customer segments to make their brands relevant.

It is a future illuminated by developments in data and online technology.

Attitudinal classification working systems, legacy behavioural knowledge-banks and econometric measurement tools promise high-quality, high-speed delivery of communications matched to mood, mode, beliefs and emotions as much as recency, frequency, value and propensity.

Deep marketing. Liquid marketing. Personal marketing. Choose your label.

But, for this vision to succeed, it is vital that the core dynamics of direct communications aren't lost in the excitement of pursuing new applications.

Creating and maintaining the highest quality data is a must-do, not a should-do. Testing before investing mustn't be passed over in favour of research before development. The need for specialist training has to be recognised alongside the desire to encourage broader skills.

There is much direct marketing can learn from its new stakeholders. But to retain its potency it needs to work hard to adhere to its principles and even harder to get the basics right, while exploring the new territories opening before it. Like any other business, it's best to look to the lessons of the past to move forwards.

In the 80s, direct marketing was primarily a standalone medium focused almost exclusively on telling the story of the product to generate direct sales. In the 90s, direct marketers aspired to tell the story of the brand, direct marketing agencies became multi-discipline shops and integration became necessary to manage the proliferation of media channels.

Now all media platforms are uniting to tell the story of the customer.

Multimedia management is still necessary to ensure the best mix for reach, but the roles of different media are no longer distinguishable. In marketing terms, the first decade of the 21st century is one of convergence - where everything ostensibly does the same thing with the same purpose but possibly in different ways.

The implications of convergence are more than just semantic. There will no longer be a need to create different propositions for different discipline partners (unless they are talking to different customer segments). Direct media will need to be measured by its ability to create positive emotional responses as much as broadcast media will need to demonstrate accountability and ROI. There will be no barriers between employment across different disciplines. There will be data departments in what we now know as advertising agencies. There will be customer insight planners in what we now think of as direct departments. Some of these things are already happening.

The real issue for agencies in the age of convergence will be differentiation.

When what were previously known as advertising agencies are pitching for the same projects as what were previously known as DM agencies - what will be the winning factor? Creativity? Originality? Thinking? What we do to achieve consumer relevance will be far more important than the channel we use to deliver it. The old maxim that a good idea can come from anywhere may just be upon us.

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