Copyright © 2015 Pearson Education, Inc.L.docx

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Copyright © 2015 Pearson Education, Inc.
Learning Objectives
Define direct and digital marketing and discuss their rapid
growth and benefits to customers and companies.
Identify and discuss the major forms of direct and digital
marketing.
Explain how companies have responded to the Internet and the
digital age with various online marketing strategies.
14 - *
This chapter defines direct and digital marketing and discusses
their rapid growth and benefits to customers and companies. It
identifies and discusses the major forms of direct and digital
marketing, and also explains how companies have responded to
the Internet and the digital age with various online marketing
strategies.
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Learning Objectives

Discuss how companies use social media and mobile marketing
to engage consumers and create brand community.
Identify and discuss the traditional direct marketing forms and
overview public policy and ethical issues presented by direct
marketing.
14 - *
This chapter discusses how companies use social media and
mobile marketing to engage consumers and create brand
community. Finally, the chapter identifies and discusses the
traditional direct marketing forms and overviews the public
policy and ethical issues presented by direct marketing.
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First Stop: FacebookDeep impact and influence on the lives of
millions of usersCan become one of the world’s most powerful
and profitable online marketersRealized it must make its own
marketing and moneymaking moves
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Facebook has tremendous impact and influence, not just as a
sharing community but also as an Internet and mobile gateway.
By wielding all of that influence, Facebook has the potential to
become one of the world’s most powerful and profitable online
marketers.
Although Facebook’s membership exploded from the very start,
CEO Mark Zuckerberg and the network’s other idealistic young
co-founders gave little thought to making money. They actually
opposed running ads or other marketing, worried that marketing
might damage Facebook’s free (and commercial-free) sharing

culture. As the company has matured, however, Facebook has
come to realize it must make its own marketing and
moneymaking moves. If it doesn’t make money, it can’t
continue to serve its members. Facebook’s ads are engagement
ads that are designed to harness the power of social connections
and move people to action.
But advertising is only one potential moneymaking venture for
Facebook. As a global gathering place where people spend time
with friends, Facebook is also a natural for selling
entertainment. Facebook hopes to duplicate its gaming
successes with other forms of entertainment.
In line with its goal to keep everything within the community,
Facebook has even entered the banking business. Facebook
Payments, which is an official Facebook subsidiary, lets
businesses and customers make purchase transactions by
exchanging various world currencies.
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13 Days

Direct and Digital MarketingEngaging directly with targeted
individual consumers and customer communities to:
Obtain an immediate response (speed)
Build lasting customer relationships (content)Build customer
engagement, brand community, and sales
14 - *
Direct and digital marketing involve engaging directly with
carefully targeted individual consumers and customer
communities to both obtain an immediate response and build
lasting customer relationships. Companies use direct marketing
to tailor their offers and content to the needs and interests of
narrowly defined segments or individual buyers. In this way,
they build customer engagement, brand community, and sales.
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New Direct-Marketing ModelUsed as a supplementary channel
or mediumConstitutes a complete model for doing business
today
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Most companies use direct marketing as a supplementary
channel or medium. For example, Sears or Macy’s, sell the
majority of their merchandise off their store shelves, but they

also sell through direct mail, online catalogs, and social media
pages.
For many companies today, direct and digital marketing are
more than just supplementary channels or advertising media.
They constitute a complete model for doing business. Firms
employing this direct model use it as the only approach. For
example, companies such as GEICO have built their entire
approach to the marketplace around direct and digital
marketing.
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Rapid Growth of Direct and
Digital MarketingFastest-growing form of marketingDirect
marketing becoming more Internet-basedClaims a surging share
of marketing spending and sales
Online display and search advertising, video, social media,
mobile, e-mail
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Direct and digital marketing have become the fastest-growing
form of marketing. Direct marketing continues to become more
Internet-based, and digital direct marketing is claiming a
surging share of marketing spending and sales. Total digital
marketing spending—including online display and search
advertising, video, social media, mobile, e-mail, and other—
now accounts for the second-largest share of media spending,
behind only television.
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Benefits of Direct and
Digital Marketing to BuyersBuyers
Convenient, easy, and private
Easy buyer-seller interaction
Quick access to products and relevant information
Brand engagement and community
14 - *SellersLow-cost, efficient, and speedyBuild close,
personalized, interactive, one-to-one customer relationships
Offer greater flexibility
For buyers, direct and digital marketing are convenient, easy,
and private. They give buyers anywhere, anytime access to an
almost unlimited assortment of goods and a wealth of products
and buying information. Through direct marketing, buyers can
interact with sellers by phone or on the seller’s Web site or app
to create exactly the configuration of information, products, or
services they want and then order them on the spot. Finally, for
consumers who want it, digital marketing through online,
mobile, and social media provides a sense of brand engagement
and community.
For sellers, direct marketing often provides a low-cost,
efficient, speedy alternative for reaching their markets. Because
of the one-to-one nature of direct marketing, companies can
interact with customers by phone or online, learn more about
their needs, and personalize products and services to specific
customer tastes. Direct and digital marketing also offer sellers
greater flexibility. They let marketers make ongoing
adjustments to prices and programs, or make immediate, timely,
and personal announcements and offers.
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Amazon
Nowhttps://www.youtube.com/watch?v=ODLp4ZGQwzk
Figure 14.1 - Forms of Direct
and Digital Marketing
14 - *
This figure shows the major forms of direct and digital
marketing.
Traditional direct marketing tools include face-to-face selling,
direct-mail marketing, catalog marketing, telemarketing, direct-
response television marketing, and kiosk marketing.
A dazzling new set of direct digital marketing tools has burst
onto the marketing scene, including social media marketing,
mobile marketing, and online marketing in the form of Web
sites, online ads, e-mail, online videos, and blogs.
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Marketing, the Internet, and
the Digital AgeDigital and social media marketing: Using
digital marketing tools to engage consumers anywhere, anytime
via their digital devices Changed customers’ notions of:

Convenience, speed, price, product information, service, and
brand interactionsMultichannel marketing: Using both
traditional and digital marketing channels
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Digital and social media marketing is the fastest-growing form
of direct marketing. It uses digital marketing tools such as Web
sites, online video, e-mail, blogs, social media, mobile ads and
apps, and other digital platforms to directly engage consumers
anywhere, anytime via their digital devices.
The digital age has fundamentally changed customers’ notions
of convenience, speed, price, product information, service, and
brand interactions. As a result, it has given marketers a whole
new way to create customer value, engage customers, and build
customer relationships. Some companies operate only online.
They include a wide array of firms, from e-tailers to search
engines and portals, transaction sites, content sites, and online
social media
Multichannel marketing refers to marketing both through stores
and other traditional offline channels and through digital,
online, social media, and mobile channels. These companies
have more online success than their online-only competitors.
Direct digital and social media marketing takes any of the
several forms that include online marketing, social media
marketing, and mobile marketing. We discuss each in turn,
starting with online marketing.
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Buying Things On The InternetSearch

TermsCommerce/InformationTypes of Products
Online MarketingMarketing via the Internet using company Web
sites, online ads and promotions, e-mail, online video, and
blogsMarketing Web sites: Interact with consumers to move
them closer to a direct purchase or other marketing
outcomeBranded community Web sites: Present brand content
that engages consumers and creates customer community around
a brand
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Online marketing refers to marketing via the Internet using
company Web sites, online ads and promotions, e-mail, online
video, and blogs.
For most companies, the first step in conducting online
marketing is to create a Web site. Marketing Web sites are
designed to interact with customers to move them closer to a
direct purchase or other marketing outcome. In contrast, a
branded community Web site does not try to sell anything but
presents brand content that engages consumers and creates
customer community around a brand.
A Web site should be easy to use and visually appealing.
Ultimately, Web sites must be useful. When it comes to Web
browsing and shopping, most people prefer substance over style
and function over flash.
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Online Advertising and
E-Mail MarketingOnline advertising: Appears while consumers
are browsing onlineE-mail marketing: Sending highly targeted,
highly personalized, relationship-building marketing messages
via e-mail
Spam: Unsolicited, unwanted commercial e-mail messages
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Online advertising refers to advertising that appears while
consumers are browsing online, including display ads, search-
related ads, online classifieds, and other forms. The main forms
of online advertising are display ads and search-related ads.
Online display ads might appear anywhere on an Internet user’s
screen and are often related to the information being viewed.
Today’s rich media ads incorporate animation, video, sound,
and interactivity. The largest form of online advertising is
search-related ads or contextual advertising. In this form of
advertising, text-based ads and links appear alongside search
engine results on sites such as Google, Yahoo!, and Bing.
E-mail marketing refers to sending highly targeted, highly
personalized, relationship-building marketing messages via e-
mail. When used properly, e-mail can be the ultimate direct
marketing medium. But there is a drawback of the growing use
of e-mail marketing—the explosion of spam, unsolicited,
unwanted commercial e-mail messages that clog up our e-mail
boxes. Spam has produced consumer irritation and frustration.
To address these concerns, most legitimate marketers now
practice permission-based e-mail marketing, sending e-mail
pitches only to customers who opt in.
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Online VideosCan engage millions of consumers Viral
marketing: Videos, ads, and other marketing content that
customers seek out or pass along to friendsCharlie Bit My
Finger
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Another form of online marketing involves posting digital video
content on brand Web sites or social media sites such as
YouTube, Facebook, and others. Some videos are made for the
Web and social media. Other videos are ads that a company
makes primarily for TV and other media but posts online before
or after an advertising campaign to extend reach and impact.
Viral marketing is the digital version of word-of-mouth
marketing. All kinds of videos can go viral, producing
engagement and positive exposure for a brand. Marketers have
little control over where their viral messages end up. They can
seed content online, but that does little good unless the message
itself strikes a chord with consumers. For example, Kmart’s TV
ad-like video featuring shoppers of all ages exclaiming “ship
my pants” pulled in nearly 8 million YouTube views and 38,000
Facebook likes in only one week.
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Blogs and Other Online ForumsOnline journals of narrowly
defined topics where people and companies post their thoughts
and other content
Benefit - Offers a fresh, original, personal, and inexpensive way
to enter into consumer online conversations
Limitation - Consumer-controlled medium

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Blogs, or Web logs, are online journals where people and
companies post their thoughts and other content related to
narrowly defined topics. Blogs can be about anything—politics,
baseball, haiku, car repair, or the latest television series.
Most marketers are now tapping into the blogosphere as a
medium for reaching their customer communities. Marketers can
use insights from consumer online conversations to improve
their marketing programs.
As a marketing tool, blogs offer some advantages. They can
offer a fresh, original, personal, and economical way to enter
into consumer online conversations.
However, blogs offer disadvantages too. The blogosphere is
cluttered and difficult to control. And although companies can
sometimes leverage blogs to engage customers in meaningful
relationships, blogs remain largely a consumer-controlled
medium.
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Social Media MarketingSocial media: Independent and
commercial online communities where people congregate,
socialize, and exchange views and informationMarketers engage
in social media by:
Using the existing ones
Setting up their own
14 - *

Social media are independent and commercial online
communities where people congregate, socialize, and exchange
views and information.
Marketers can engage in social media in two ways: They can
use existing social media or they can set up their own. Using
existing social media seems the easiest. Thus, most brands,
large and small, have set up shop on a host of social media
sites. Such social media can create substantial brand
communities. Countless niche social media have also emerged
that cater to the needs of smaller communities of like-minded
people, making them ideal vehicles for marketers who want to
target special interest groups.
Beyond the independent social media, many companies have
created their own online brand communities. For example, in
Nike’s Nike+ running community, members join together online
to upload, track, and compare their performances.
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Social Media Marketing
Advantages and Challenges
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Using social media presents both advantages and challenges.
On the plus side, social media are targeted and personal, so they
allow marketers to create and share tailored brand content with
individual consumers and customer communities. Social media
are interactive, making them ideal for starting and participating
in customer conversations and listening to customer feedback.

Social media are also immediate and timely. They can be used
to reach customers anytime, anywhere with timely and relevant
content regarding brand happenings and activities. Social media
can be very cost effective. Although creating and administering
social media content can be costly, many social media are free
or inexpensive to use. The biggest advantages of social media
are the engagement and social sharing capabilities. Social media
are especially well suited to creating customer engagement and
community.
Social media marketing also present challenges. Most
companies are still experimenting with how to use them
effectively, and results are hard to measure. Social networks are
largely user controlled. Marketers cannot simply barge into
consumers’ digital interactions; they need to earn the right to be
there. Rather than intruding, marketers must learn to become a
valued part of the online experience.
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Integrated Social Media MarketingLarge companies design
social media efforts that blend with and support other elements
of a brand’s marketing strategy and tactics.Firms that use social
media effectively create brand-related social sharing,
engagement, and customer community.
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Most large companies are now designing full-scale social media
efforts that blend with and support other elements of a brand’s
marketing strategy and tactics. More than making scattered
efforts and chasing likes and tweets, companies that use social
media successfully are integrating a broad range of diverse
media to create brand-related social sharing, engagement, and

customer community.
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Mobile MarketingPromotional content delivered to consumers
through their mobile devicesEngage customers anywhere,
anytime during the buying and relationship-building processes
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Mobile marketing features marketing messages, promotions, and
other content delivered to on-the-go consumers through their
mobile devices. Marketers use mobile marketing to engage
customers anywhere, anytime during the buying and
relationship-building processes. The widespread adoption of
mobile devices and the surge in mobile Web traffic have made
mobile marketing a must for most brands. Retailers can use
mobile marketing to enrich the customer’s shopping experience
at the same time they stimulate buying.
For example, Macy’s built its recent “Brasil: A Magical
Journey” promotion around a popular and imaginative
smartphone app. The campaign featured apparel from Brazilian
designers and in-store experiences celebrating Brazilian culture.
By using their smartphones to scan Quick Response (QR) codes
throughout the store, shoppers could learn about featured
fashions and experience Brazilian culture through virtual tours
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Direct Mail MarketingSending an offer, announcement,
reminder, or other item directly to a person at a particular
address
Tangible and creates emotional connection with customers
Effective component of a broader integrated marketing
campaign
Direct and personalized
Sent to consumers who want to receive it
14 - *
Although the fast-growing digital marketing tools are in much
focus lately, traditional direct marketing tools are very much
alive and still heavily used.
Direct-mail marketing occurs by sending an offer,
announcement, reminder, or other item directly to a person at a
particular address. Direct mail is well suited to direct, one-to-
one communication. It permits high-target market selectivity,
can be personalized, is flexible, and allows the easy
measurement of results. Although direct mail costs more per
thousand people reached than mass media such as television or
magazines, the people it reaches are much better prospects.
Direct mail marketing offers some distinct advantages over
digital forms. It provides something tangible for people to hold
and keep, and it can be used to send samples. It creates an
emotional connection with customers that digital cannot. It can
be an effective component of a broader integrated marketing
campaign. It may be perceived as junk mail if sent to people
who have no interest in it. For this reason, smart marketers are
targeting their direct mail carefully so as not to waste their
money and recipients’ time. They are designing permission-
based programs that send direct mail only to those who want to

receive it.
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Catalog MarketingPrint, video, or digital catalogs that are
mailed to select customers, made available in stores, or
presented online
Eliminates printing and mailing costs
No space constraints
Broader assortment of presentation formats
Real-time merchandising capabilities
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Advances in technology, along with the trend of personalized,
one-to-one marketing, have resulted in exciting changes in
catalog marketing. Catalog marketing is a form of direct
marketing through print, video, or digital catalogs that are
mailed to select customers, made available in stores, or
presented online.
Internet and digital marketing have created the need for digital
catalogs. They eliminate printing and mailing costs. They can
offer an almost unlimited amount of merchandise. They offer a
broader assortment of presentation formats, including search
and video. They allow real-time merchandising; products and
features can be added or removed as needed, and prices can be
adjusted instantly to match demand.
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Telemarketing and Direct-Response Television (DRTV)
Marketing Telemarketing: Selling directly to customers using
the telephone
Outbound and inbound telephone marketing
Rise of do-not-call legislation resulted in opt-in calling
systemsDirect-response television (DRTV) marketing
Direct-response television advertising
Interactive TV (iTV) advertising
14 - *
Telemarketing involves using the telephone to sell directly to
consumers and business customers. Marketers use outbound
telephone marketing to sell directly to consumers and
businesses and inbound toll-free numbers to receive orders from
television and print ads, direct mail, or catalogs.
In 2003, U.S. lawmakers established the National Do Not Call
Registry, which is managed by the Federal Trade Commission
(FTC). Do-not-call legislation has helped marketers to develop
opt-in calling systems, in which they provide useful information
and offers to customers who have invited the company to
contact them by phone or e-mail.
Direct-response television (DRTV) marketing refers to direct
marketing via television, including direct-response television
advertising or infomercials and interactive television or iTV
advertising. DRTV ads are often associated with somewhat loud
or questionable pitches for cleaners, stain removers, kitchen
gadgets, and nifty ways to stay in shape without working very
hard at it. A more recent form of direct-response television
marketing is interactive TV (iTV), which lets viewers interact
with television programming and advertising.

As the lines continue to blur between TV screens and other
video screens, interactive ads and infomercials are appearing
not just on TV, but also on mobile, online, and social media
platforms, adding even more TV-like interactive direct
marketing venues.
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Kiosk MarketingProduct or service information and ordering
machines placed by companiesAdvancements
Wireless-enabled
Face recognition
14 - *
As consumers become more and more comfortable with digital
and touchscreen technologies, many companies are placing
information and ordering machines called kiosks in stores,
airports, hotels, college campuses, and other locations.
Many modern smart kiosks are now wireless-enabled. And some
machines even use facial recognition software that lets them
guess gender and age and make product recommendations based
on that data. For example, 100 Best Buy Express ZoomShop
kiosks across the country, conveniently located in airports, busy
malls, military bases, and resorts, automatically dispense an
assortment of portable media players, digital cameras, gaming
consoles, headphones, phone chargers, travel gadgets, and other
popular products.
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Public Policy Issues in Direct and Digital Marketing
14 - *
Direct and digital marketing have a dark side due to the
aggressive and sometimes shady tactics of a few direct
marketers. Abuses range from simple excesses that irritate
consumers to instances of unfair practices or even outright
deception and fraud. The direct marketing industry has also
faced growing privacy concerns, and online marketers must deal
with Internet security issues.
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Public Policy Issues in Direct and Digital Marketing
14 - *
CHEATING
REGULATION
Direct and digital marketing have a dark side due to the
aggressive and sometimes shady tactics of a few direct
marketers. Abuses range from simple excesses that irritate
consumers to instances of unfair practices or even outright
deception and fraud. The direct marketing industry has also
faced growing privacy concerns, and online marketers must deal
with Internet security issues.
*
Irritation, Unfairness, Deception, and Fraud

14 - *
Direct marketing excesses sometimes annoy or offend
consumers. For example, many customers dislike direct-
response TV commercials that are too loud, long, and insistent.
Their mailboxes fill up with unwanted junk mail, and their
computer, phone, and tablet screens flash with unwanted online
or mobile display ads, pop-ups, or pop-unders.
Some direct marketers have been accused of taking unfair
advantage of impulsive or less-sophisticated buyers through
television shopping channels, enticing Web sites, and program-
long infomercials targeting television-addicted shoppers. They
feature smooth-talking hosts, elaborately staged demonstrations,
claims of drastic price reductions, time limitations, and
unequaled ease of purchase to inflame buyers who have low
sales resistance.
Fraudulent schemes, such as investment scams or phony
collections for charity, have also multiplied in recent years.
Internet fraud, including identity theft and financial scams, has
become a serious problem. One common form of Internet fraud
is phishing, a type of identity theft that uses deceptive e-mails
and fraudulent online sites to fool users into divulging their
personal data. Many consumers worry about online and digital
security. They fear that unscrupulous snoopers will eavesdrop
on their online transactions and social media postings, picking
up personal information or intercepting credit and debit card
numbers. Another Internet marketing concern is that of access
by vulnerable or unauthorized groups. For example, marketers
of adult-oriented materials and sites have found it difficult to
restrict access by minors.
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Consumer PrivacyFear of invasion of privacy Ready availability
of information leaves consumers open to abusePersonal
Information used to cost money
14 - *
Invasion of privacy is perhaps the toughest public policy issue
now confronting the direct marketing industry. Consumers
benefit from database marketing. However, too much knowledge
about consumers’ lives may lead to marketers taking unfair
advantage of consumers. Some consumers and policy makers
worry that the ready availability of information about the
consumers may leave them open to abuse.
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Need for ActionGovernment actions
Do-not-call, Do-not-mail, Do-not-track lists
Can Spam legislation
Congressional legislation – Give more control to consumers
over use of online information
Federal Trade Commission (FTC) - Policing online privacy

14 - *
To curb direct marketing excesses, various government agencies
are investigating not only do-not-call lists but also do-not-mail
lists, do-not-track online lists, and Can Spam legislation. In
response to online privacy and security concerns, the federal
government has considered numerous legislative actions to
regulate how online, social media, and mobile operators obtain
and use consumer information. For example, Congress is
drafting legislation that would give consumers more control
over how online information is used. In addition, the FTC is
taking a more active role in policing online privacy.
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Learning Objectives
Define direct and digital marketing and discuss their rapid
growth and benefits to customers and companies.
Identify and discuss the major forms of direct and digital
marketing.
Explain how companies have responded to the Internet and the
digital age with various online marketing strategies.
14 - *
*
Learning Objectives

Discuss how companies use social media and mobile marketing
to engage consumers and create brand community.
Identify and discuss the traditional direct marketing forms and
overview public policy and ethical issues presented by direct
marketing.
14 - *
*

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