This Campaign book of essays demonstrates that direct marketing truly has come of age. Maturity brings increased opportunity and responsibility, particularly against significant changes and challenges to the industry.
Most of these opportunities and challenges are a function of new media.
These are emerging as significant forces in the marketer's portfolio and many of them have one-to-one communications at their core. And the UK growth rates are astonishing. In January 2002, the number of e-mails between households was 550 million. In December 2002, more than eight million people shopped online and 1,600 million text messages were sent.
The beauty of one-to-one communications is accurate targeting, genuine personalisation and real relationship building. But, contrary to popular belief, doing it properly does not come cheap. Clients must realise that quality comes at a premium, as the best agencies can demonstrate.
An excellent example of top agencies working together to create a holistic campaign with a client is given in the Barnardo's case history co-authored by Mary Daniels of Barnardo's and Dan Goldstein of Bartle Bogle Hegarty.
This describes the impact of the "giving back children their future" campaign created by BBH, John Ayling & Associates and EHS Brann, which won the Grand Prix in the 2002 IPA Effectiveness Awards. The campaign had a return on investment of £2.16 for every £1 invested, with Barnardo's total income increasing by 19 per cent, or £47 million over the first 29 months.
Direct marketing was key to its success and increased contribution by 86 per cent, while "face-to-face" recruited and retained 107,205 people, with £4 million income to date deriving from this source. It is clear these "response" media operated so successfully because of the brand umbrella created by powerful press advertising and the public relations which underpinned it and then spun off it.
Another key component in the campaign was that of addressing Barnardo's vital internal audience. Barnardo's made great efforts to communicate its new positioning to the 12,500 people working for the charity, knowing that these brand ambassadors needed to be fully briefed on the new direction.
Although it is now commonplace for agencies to take a media-neutral approach in developing a brand campaign, it is still relatively rare for them to include internal communications in their thinking. As companies in the information age become more transparent, it becomes more important that internal values are aligned with their external ones.
All too often, a massive investment in advertising and marketing communications can be fatally undermined by helpline hell. Existing and potential customers are put off by poor management at a brand's call centre.
DM agencies are better placed than most to address this issue by taking a 360-degree approach and facing those challenges presented by response handling systems. They must argue the case for enhanced quality and demonstrate the increase in customer loyalty and lifetime value.
The Barnardo's case also illustrates the answer to another key challenge for the industry, which is that of delivering brand communications in a holistic way using a portfolio of channels to establish a successful dialogue with customers.
Barnardo's used six media in its campaign and the analysis of the IPA Effectiveness Databank reveals a steady increase in the number of different means of communication being used by winning campaigns. In 1998, the average was 3.97; in 2000, it was 4.06 and in 2002, it rose to 4.20.
Having said that, TV remains the single most important medium, according to the IPA Effectiveness Databank, and many leading DM agencies now spend more client money on TV than they do on direct mail. DiTV can only accelerate this.
In parallel, the increase in the penetration of broadband means that web TV will be with a large sector of the population within a couple of years. We can look forward to a convergence between "brand" and "response" advertising to advance one-to-one communications. In this context, agencies with a heritage in direct marketing are well placed: clients are focused on accountability, integration of media mixes is key to brand success and "brand response" is the future of TV.
However, the meteoric growth of spam threatens the future of these new media and is leading to calls for increasing regulation. In order to prevent unnecessary restrictions on commercial communications, the industry has to take the lead and apply new thinking to new media. We must prepare ourselves for the reality of permission-based marketing and consign the "throw enough shit at the wall and some of it will stick" mentality to the bin.
In the digital world, there's no excuse for accepting a response rate of 1.5 per cent, because the irritation factor of 98.5 per cent spam in your inbox, let alone on your voicemail, is out of all proportion to what it might be on your doormat.
Protecting the public's confidence in commercial communications is essential to the well-being of brands. To this end, the industry is making significant progress in persuading the Government and Ofcom to consider introducing accredited self-regulation into the world of broadcast advertising.
As we move towards a more holistic approach to self-regulation and as communications platforms converge, let's ensure the industry does not allow any new-media Achilles' heels to be exposed, which may make it vulnerable to attack. DM agencies have an important role to play in this arena, both in collecting the funding for self-regulation through the Advertising Standards Board of Finance levy and in ensuring both they and their clients abide by the newly reviewed and unified Committee of Advertising Practice (CAP) Code, which operates across all non-broadcast media.
In this convergent media world, brand response and brand responsibility go hand in hand.