Get the right message, to the right person, at the right time!
What is Direct Marketing? A CONTROVERSIAL sales method by which advertisers approach potential customers directly with products or services Also involves compiling and maintaining a LARGE DATABASEof personal information about potential customers and clients
WHY DIRECT MARKETING? Best way of breaking through clutter Impactful and relevant Costs less per sale then advertising and PR Measurable and Controllable by company
Advertising Mass Competitive attention Breadth Remember Impression Pay for everyone Direct Marketing Targeted Selective attention Depth Respond Decision Pay for targets ADVERTISING VS. DIRECT MARKETING `
Types of Direct Marketing Telemarketing Email marketing Door-to-Door Marketing / Direct Selling Broadcast Faxing Voicemail Marketing Direct Response Television Marketing (DRTV) Couponing
History Introduced by Coca-Cola Company in 1887. Coupons were mailed to potential customers and placed in magazines. By 1913 one in nine Americans had received a free Coca-Cola, for a total of 8,500,000 free drinks through coupons
popularity Traffic to coupon sites increased an incredible 38%from March 2007 to March 2008; whereas overall Internet traffic growth grew only 5% during the same period. Boom in discount coupons in 2009 due to recession and businesses issued 367 billion coupons last year and consumers redeemed 3.3 billion In 2009 57%of consumers said they were once self-conscious about using coupons but no longer care
Consumer perspective Considered as best way for money saving People enjoy the feeling of gaining a bargain and being treated as special It's part of the thrill of the hunt of online shopping as much as any financial benefit
Companies offering coupons Manufacturers of food products bought about 5% more couponsin the fourth quarter of 2008 to promote their goods because more people were eating at home to save money Almost EVERYONE!
Digital coupon hunting? Social Coupon Sites & Portals Search Engines Site Searching (brand websites)
DIGITAL COUPONS Extended life “My precious” Feels special Gift viral Crafts Brand – in hold ONLINE BANNERS Media life Everyone's click Feel mass Link viral Intangible link In sight Digital coupons vs. online banners
Types of digital coupons Discount coupons (Show & Save) Enables shoppers to either print a local coupon offer or simply show the coupon on a mobile device at checkout at the retailer or service provider Save to Card Allows shoppers to save coupon offers directly to their store loyalty cards. The paperless, virtual coupons are automatically deducted at checkout Coupon codes gives access to hundreds of thousands of online coupon codes that provide discounts or free shipping on online purchases
Profitability Traditional Economic View Target coupons towards customers who are unwilling to pay the current price. Incremental sales result from this new segment without impacting profits from existing customers. Behavioral View The existence of coupons decreases likelihood of purchase by current customers by about 15%. This offsets any gains from the new sales.
Top 10 tips New Customers need higher % (15 vs. 10) Increase average order size by 10% as min Any Products vs One Product Coding the Code - Complex vs. Simple Optimize site for coupon (SiteSearch, Off-search, Social) Urgency vs. Expiration Lead generation - Get Coupon & Updates! Send to Friends Affiliate Coupon Codes Test Coupon Processes & Creatives Track - Core track (e.g. JOY), Per Channels (e.g. OUS /AND)
Market Summary The pullback of ad spending and mobile phones becoming personal computers, are the most "disruptive" force in media today, according to a new survey of media and advertising professionals by consulting giant KPMG(Mediapost, Feb. 6, 2009) 63% of consumers, across all age groups, said that a coupon would be the most effective incentive to get them to respond to a mobile marketing message (ABI Research) Mobile handsets are now the technological tool Americans would be most reluctant to give up, surpassing the Internet and T.V. (Pew Internet & American Life Project) 57% of consumers said they would want to receive a coupon on their phone (Deloitte) 23 percent – that’s 58 million – of all U.S. mobile subscribers say they have been exposed to advertising on their phones in the past 30 days. Half of all data users, or 28 million, who recall seeing mobile advertising in the previous 30 days say they responded to a mobile ad.(Nielsen Mobile) The U.S. mobile ad market will grow from $33.2 million in 2008 to $1.4 billion in 2012(The Kelsey Group) The typical mobile phone user carries his or her phone around for an average of 14 hours per day(Gartner: Market Trends) 243 million citizens, or 80 percent of the U.S. population of 303.6 million, have mo-bile phones. Of mobile phone users, 200 million, or 82 percent, operate phones with text messaging capabilities, and 174 million, or 72 percent, have phones capable of browsing the Web(CTIA-The Wireless Association)
Market Summary cont. Global spending on mobile advertising totaled $2.7 billion in 2007 and is expected to reach $4.6 billion in 2008, and rise to $19.1 billion by 2012.(eMarketer) 3.3 billion people worldwide now have mobile phones(eMarketer) 87% of US market has a cell phone(Gartner) 33% of email addresses change on an annual basis while cell phone numbers stay with the same customer for years(ABI Research) 63% of consumers feel a coupon is the top incentive to receive mobile marketing text message(ABI Research)
Delivery Methods SMS – Short code campaign or text message promotion as part of location-based ad network. MMS – Can deliver one or two dimensional bar code coupons. WAP Push – Provides link to WAP site with coupon or promotion code. Print – Short code campaigns or one and two dimensional bar codes.
Location Based Advertising Businesses pay to participate in industry’s first foodservice, location-based ad network Consumer’s opt in to receive promotions and coupons from the network When consumers are within a certain distance of a participating establishment, they automatically receive promotions
Examples QR Codes (2 dimensional) will soon be appearing on cans of Pepsi Max. The code resolves to a WAP site with games and videos
Case Studies Dining franchise Village Inn used mobile coupons to lure consumers and build out the restaurant brand’s Mobile VIP Club. The campaign offered users the chance to redeem one free entrée with their purchase of another entrée. Users were asked to text the word CREPES to short code 74642 to get the mobile coupon offer. Results: 30% double opt-in to VIP Club 113% of coupons redeemed (created viral effect, users passed coupons to friends) The Wine Enthusiast advertisements in Wall Street Journal, prompted readers to take a picture of an advertisement with their camera phone to receive a special offer from Wine Enthusiast on their mobile phone. The offer was a coupon good for 15% percent off purchases of $100 or more at Wine Enthusiast. Benefits
Responses received from various cities across US
Measurable print advertisement effectiveness by city, regional edition and time of day
conclusion Online coupons may be driving customers away In an experiment, an additional 15% of customers abandon carts due to coupon code prompting Must rethink presentation of coupons Coupon delivery out of company control Self selection along tech-savvy lines Must rethink efficacy of couponing