A few years back – when I was on the Direct Marketing Association Board – we had discussions about what to call “direct marketing.” That discussion continues today.
To traditionalists in the DM field, “direct marketing” encompasses any form of marketing that provides a measurable response from a targeted audience – a sale, a lead, store or Web site traffic, social engagement. Whether or not the marketing activity is offline or online or a combination is immaterial.
Some started to use the phrase “data-driven marketing” to span these two marketing platforms. While this term didn’t settle the “name” debate about direct and digital – one in the same or different? – it did make front-and-center the star of both direct and digital marketing, “it’s all about the data.”
Data is bringing digital and direct marketing together, where they always have belonged. The use of data from the customer database (or CRM data), teamed with compiled data from third party sources, is being combined with online data (often de-identified, some of it addressable) to enable significant lift in response, and elimination of waste, in digital display, search and social media spending.
In the hyperbolic world of “Big Data,” marketers are scrambling for data with three basic attributes: data they can believe, data that is accurate and data that can be leveraged. Nothing more, nothing less.
It’s a fairly straightforward process. Consider these observations:
Compose a best-customer profile by product from existing CRM data. Offline purchases currently account for 90% of all transactions. All of this addressable info can be analyzed for effective online targeting:
- transaction data (both offline and online) including product SKUs
- RFM analysis from that data
- email campaign and behavior
- social behavior
- mobile usage (opt-in)
- web behavior
- enterprise data
- consumer and business demographics
Data management platforms and data quality software enable disparate data sources to be staged, parsed and integrated for more complete analyses.
Digital media spend will grow 14% this year, surpassing $50 billion in the U.S. alone (The Winterberry Group, 2014). Much of this spending beyond email is NOT driven by addressable media, and consumer attention online is fleeting. Marketers are wondering: is any of my spending in search, social and display wasted? Whether spending for branding or spending for direct-response, the answer is still the same: yes. But the good news is that much of this waste is preventable!
You can buy audiences by cookie (first party and third party), and you can use device recognition technology for mobile marketing. These technologies definitely help discern and differentiate audiences online – but the targeting process can be refined further with offline data.
When offline data gets mixed with online data for targeting, returns in consumer activity can increase two times to five times. Retargeting becomes more effective; non-responsive search terms and targets are identified and purged; and search bids become more strategic using consumer data appends, ZIP+ data and predictive attributes from look-alike models.
Adlucent (http://www.adlucent.com), arguably among the best paid search agencies on the planet, uses this predictable and profitable process. One of its retail clients increased revenue 25% with an increase in clicks of only 3% (resulting in a 22% increase of revenue per click). Another retail customer saw clicks drop by 17%, but revenue grow by 10% and revenue per click rise by 33%.
This is data-driven marketing! Using offline and online data together intelligently. 2015 will certainly continue to prove such online-offline data love.
Helpful Links:
Winterberry Group: “2014 Annual Outlook: What to Expect in Direct and Digital Marketing” (Look for a 2015 Report on this site in early January 2015.) http://www.winterberrygroup.com/ourinsights/cp
MediaPost: “Media Fragmentation Means Ad World’s Future Based on Audience, Not Content”
http://www.mediapost.com/publications/article/233145/media-fragmentation-means-ad-worlds-future-based.html
LiveIntent: “What is CRM Retargeting?”
http://www.liveintent.com/news/advertising-technology/what-is-crm-retargeting/
Quote:
“Big data is like teenage sex: everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it…”
— Dan Ariely, Duke University
From ATX ...with Gary Skidmore 
[…] all digital display spend the prior year to 45% share. Audience, more than context, is the driver, as more and more CRM data (online and offline) newly flows in to audience-buying algorithms that have browsing behavior at […]
By: 2015 Begins with Focus on Data in Closely Watched Media Spend Projections | From ATX ...with Gary Skidmore on February 8, 2015
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