There has been a tendency in the direct marketing industry to play
down the significance of e-mail marketing with practitioners rather
sniffily pointing out that it is, after all, "just another marketing
channel".
This reluctance to wholeheartedly embrace e-mail into the direct
marketing fold is not that surprising.
Here was a new communication channel that threatened to divert spend
away from direct mail. And direct mail is big business, fuelling a large
network of companies including direct marketing agencies (many of which
charge commission on the print and distribution costs), mailing houses
and printers.
E-mail, in comparison, costs virtually nothing to transmit. It is fast,
it can elicit an immediate response courtesy of the "reply to sender"
button and, most importantly, it is about as direct as it can get. An
e-mail pings straight into someone's inbox. Get the message right and it
is one of the most affordable and effective ways of striking up a
dialogue with customers.
So e-mail may indeed be "just another channel", but it is a very
compelling channel, particularly for companies which may have been
priced out of direct mail. There's growing evidence of a commitment
among companies to e-marketing. P&O Ferries announced earlier this year
that it was scrapping direct mail in favour of e-marketing. Dulux has
just embarked on its first viral e-mail campaign dovetailing with its
"You find the colour and we'll match it" TV ads. And the NSPCC is
diverting spend into e-mail following its first successful campaign
aimed at attracting new donors.
But while e-marketing is undoubtedly gaining momentum, direct mail
evangelists will be reassured by the fact that mailing volumes are
rising unabated.
The latest figures from the Direct Mail Information Service reveal that
volumes for April to June 2001 rose year on year by 4.5 per cent to 1.25
billion. Expenditure over the same quarter rose by 7.5 per cent to
£480 million. So, rather than eating into a company's direct mail
budget, e-mail is actually growing the overall direct marketing pie - a
fact born out by more figures, this time from the Direct Marketing
Association.
Its annual census this year revealed that the UK's direct marketing
industry had hit the ten billion-pound mark for the first time, fuelled
in no small measure by emerging new-media channels.
The message is clear: online and offline channels co-exist, they
complement rather than cannibalise each other. Victoria Moffatt, the
senior CRM consultant at the WPP-owned OgilvyOne, endorses this view:
"One of the best ways of using e-mail is in conjunction with direct
mail. E-mail is the quick hit, alerting someone to a product or an
offer, followed by direct mail which gives the depth."
Increasingly, companies are adopting this multi-channel stance. The
Chrysalis-backed sports network Rivals.net supported the launch of a new
SMS service for football fans with a 250,000-strong e-mail campaign as
well as ads in fanzines, an SMS to 50,000 fans, banner ads and a
promotional campaign.
But with such a wealth of media channels at a company's disposal, it is
all too easy to treat on- and offline communications in the same
way.
Steve Barton, the chief executive officer at Leonardo, the direct
marketing and digital arm of Leo Burnett UK, describes this as
"mail-pack thinking in a digital environment". He adds: "It doesn't
work. You have to take the direct marketing principles but reapply them
in a very different environment with different expectations."
One of the DM principles to have received the most attention in relation
to e-mail is permission marketing.
It's a straightforward notion (ask an individual's permission before you
communicate with them) but one at odds with traditional DM. Direct mail
has always been about interruption marketing. If your targeting is good
and your message relevant, there's a good chance the recipient will
respond despite the fact that permission has been neither sought nor
given.
Barton, however, argues that this approach is beginning to change
offline. "Companies are asking customers what they are interested in
hearing about, how they want to be communicated with and are honouring
those requests," he says. "It's happening, but it's making a lot of
people nervous because you're closing down channels. The fact is,
though, that it works. The increase in response is not incremental but
goes up dramatically."
However, Barton admits this approach "is not happening as much as it
should". He adds: "You still have the point at which it's more cost
efficient to dump mailings on people and some sectors have bought that
model for far too long."
Lisa Thomas, chief executive of M&C Saatchi's DM division, LIDA, says:
"I'm no supporter of cold blanket direct mail but for some companies the
return on investment model works. E-mail is a chance to get it right in
terms of permission."
And there's the rub. E-mail is a channel that demands permission has
been given. Unlike DM, the personal nature of an individual's inbox
means that unsolicited contact infuriates, frustrates and alienates. For
a company with any concern for its relationship with customers, that's
bad news. For the DM industry, it's a chance to prove the permission
model works. By putting control in a consumer's hands, the industry can
distance itself from accusations of scatter-gun techniques which show
little concern for the individual.
Of course, how companies actually seek permission has been the subject
of much debate in the industry with the new trade body, The E-mail
Marketing Association, advocating opt-in while last month the European
Parliament postponed making a final decision on Europe-wide policy for
e-mail marketing until later this month. Moffatt argues that opt-out is
adequate, adding: "The key thing is to make sure marketers are
compliant, to make it an effective law so that we don't need to go to
extremes."
Best practice clearly dictates that, regardless of whether an opt-in or
opt-out mechanic is used, companies are absolutely transparent about how
the information given is going to be used as well as making it very easy
to unsubscribe. Only then will the consumers' trust be won and only then
will the long-term effectiveness of e-mail marketing be secure.
CUSTOMER COMMUNICATION: E-MAIL'S BRANDING POTENTIAL
The e-mail branding and marketing specialist Mailround has discovered
that 75 of the world's most valuable brands, as defined by Interbrand,
are not using e-mail marketing to its full capacity.
Earlier this year, the company sent one enquiry by e-mail and one
enquiry by post to each of the 75 companies.
Not one of the 87 responses received by Mailround from the top 75 brands
displayed any form of branding, despite companies being twice as likely
to respond to e-mail enquiries than to requests for information by
post.
Eldar Tuvey, the managing director of Mailround, commented: "Companies
with employees that regularly use e-mail are missing a communication and
marketing trick. Companies send out tens of thousands of e-mails a
month.
"They can be as uniformly branded as print media, and yet they have the
added potential for holding interactive messages and reinforcing key
elements of the brand."
KODAK CAPTURES CUSTOMERS - AND SMILES AT PROFITS
Kodak Digital and Applied Imaging launched a pan-European
permission-marketing programme, involving e-mail and online advertising
across seven markets to support the roll-out of the shop@kodak
(www.kodak.co.uk/go/shop), as well as to boost site traffic and online
spending.
The Interactive Agency combined new technology and traditional DM
techniques to segment Kodak's customer and prospective base while
developing its acquisition programme. Results demonstrate a significant
click-through rate across all countries, rising as high as 26 per cent
in the Netherlands.
The e-mails were tested in html and achieved a 30 per cent greater
response rate over plain text e-mail.
Meanwhile, e-mail response rates have improved and now reach more than
25 per cent.
Kodak exceeded its first-quarter profit target by 107 per cent proving
that, for this brand, it has been more cost effective to use e-marketing
than offline DM.
