The Power of Direct: Relevance. Responsibility. Results.The Power of Direct: Relevance. Responsibility. Results.
Evolving Evolving Economics of Economics of
Direct MarketingDirect Marketing
Evolving Evolving Economics of Economics of
Direct MarketingDirect Marketing
Jerry Cerasale - DMAJerry Cerasale - DMAJoe Schick – Quad GraphicsJoe Schick – Quad GraphicsStephanie Jackson - ZinioStephanie Jackson - Zinio
David Miller – YahooDavid Miller – YahooNeil O’Keefe - DMANeil O’Keefe - DMA
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Evolving Economics of Direct MarketingEvolving Economics of Direct Marketing
Stephanie Jackson- Senior Manager, Strategic Marketing Solutions,
Zinio Systems
David Miller- Senior Director, Product Management for Ranking,
Pricing & Optimization, Yahoo! Sponsored Search
Joseph E. Schick- Director of Postal Affairs, Quad/Graphics, Inc.
Jerry Cerasale- Sr. V.P., Government Affairs, DMA
Neil O’Keefe- V.P. Catalog and Multichannel Merchant Segment,
DMA
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History of Catalogs and Direct MarketingHistory of Catalogs and Direct Marketing
1774- Benjamin Franklin creates first American catalog
1872- Aaron Montgomery Ward produces first modern
catalog
1917- DMA founded as the Direct Mail Advertising
Association
1957- DialAmerica Marketing becomes the first company
completely dedicated to inbound and outbound telephone sales and services.
1967- AT&T creates a WATS line – Predecessor to the 800
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History of Catalogs and Direct MarketingHistory of Catalogs and Direct Marketing
1983- AOL founded as Quantum Computer Services
1994- Jeff Bezos founded Amazon.com, Inc.
2004- Facebook
2006- Twitter
2008 - Sears launches Mobile Sears 2go
- Montgomery Ward launches a website
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On-Line CatalogOn-Line Catalog
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VideoVideo
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Email Catalog RequestsEmail Catalog Requests
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You-TubeYou-Tube
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FacebookFacebook
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3D Bar Codes3D Bar Codes
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Mobile SolicitationMobile Solicitation
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Behavioral MarketingBehavioral Marketing
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Mobile InteractiveMobile Interactive
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TwitterTwitter
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Yahoo ShoppingYahoo Shopping
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Search with VideoSearch with Video
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Change in Budgets: 2008 to 2009Change in Budgets: 2008 to 2009
Channel Increase Decrease Same
Catalog 23% 47% 30%
Email 63% 7% 30%
Mobile 42% 6.5% 52%
Internet 67% 8% 25%
Search 60% 11% 30%
Source: 2009 Response Rate Report
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Printing ModificationsPrinting Modifications
Trim Size- Tabbed Booklets
Page Count Self Mailer versus
Catalog Postcards Letters
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Jerry CerasaleJerry Cerasale
Sr. V.P., Government Affairs,DMA
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Postal Rate HistoryPostal Rate History
Prior to 1971 - Congress set postage
1971 to 2007- Board of Governors proposed rates- Postal Rate Commission recommended rates- Governors approved rates
• Rates were set at cost plus a markup• USPS was required to breakeven in a future test
year- Last rate case under old law = 20% to 40%
postage increase for Standard Mail flats
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Postal Rate SettingPostal Rate Setting
Competitive classes of mail (bulk parcels, Priority, Express)- Market rates set by Board of Governors
• Sum of all competitive classes net revenue must cover 5% of USPS institutional (fixed) costs
- Postal Regulatory Commission annually reviews revenues and costs and issues an Annual Compliance Review
- PRC may hear complaints that rates are unlawful
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Postal Rate SettingPostal Rate Setting
Market Dominant classes- (First-, Standard, Single piece parcels,
Periodicals)- Set by Governors• Each class average increase may not exceed CPI
- PRC reviews announced rates has 45 days to determine whether or not in compliance with the CPI cap
- Postal Regulatory Commission annually reviews revenues and costs and issues an Annual Compliance Review
- PRC may hear complaints that rates are unlawful
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Changing Role of PRCChanging Role of PRC
New PRC—more than a name change Subpoena power May require rate adjustments Demands more data Produces annual compliance reports Hears complaints More powerful, BUT USPS has ratemaking flexibility
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Summer SaleSummer Sale
July 1, 2009 through September 30, 2009. Mailers who mailed over 1 million Standard
letters and/or flats from October 1, 2007 through March 31, 2008 are eligible to participate in the sale.- about 3,250 mailers accounting for 75% of Standard
Mail volume (letters sent this week)- Didn’t get a letter but think you should have?—
appeal at [email protected] Mailers will receive a rebate of 30% on any
mail volume in that period which is over the past threshold.
Mailers’ rebate will be adjusted if their October, 2009 volume is less than their October, 2008 mail volume adjusted their mailing trend.
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Summer SaleSummer Sale
Vol. = Volume Post = Postage Oct 1, 08 thru Mar 31, 09 Vol. ÷ Oct 1,
07 thru Mar 31, 08 Vol. = Trend
Trend x Jul 1, 08 thru Sep 30, 08 Vol. = Threshold
Jul 1, 09 thru Sep 30, 09 Post ÷ Jul 1, 09 thru Sep 30, 09 Vol. = Avg. Post
(Jul 1, 09 thru Sep 30, 09 Vol. - Threshold) x Avg. Post x 0.30 = Unadjusted Rebate
(Oct 08 Vol. x Trend) - Oct 09 Vol. = Oct Adjustment
Unadjusted Rebate - (Oct Adjustment x 0.30) = Final Rebate
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Summer SaleSummer Sale
Mailers will pay full postage during the summer.
After October 31, 2009 USPS will determine the rebate which each mailer is due.
Rebates will be credited to the mailer’s permit account before December 31, 2009.
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Summer SaleSummer Sale
USPS will be sending eligible mailers letters that will provide the Threshold as determined by USPS data systems.
Mailers who believe they are eligible but did not receive a letter or mailers who do not agree with the USPS determined Threshold may appeal to USPS.
USPS, shortly, will provide DMA with the contact for any appeals.
We expect mailers to receive these letters by this week.
Appeal at [email protected]
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Summer SaleSummer Sale
DMA is hosting a webinar with Tom Foti of USPS
Date: May 11, 2009 Time: 12:30 to 2:00 EDT Register: the-
dma.org/government/summersale Charge: $15
- to cover cost of the phone line
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Email / Can SPAMEmail / Can SPAM
No permission required Header must be truthful Subject line must relate to the email
message From line must have sender (marketer)
or initiator (service or list provider) Must have Internet based opt-out Must have postal address for sender
(may be PO Box) New rules for joint messages—may pick
one of the advertisers to be the sender (whose opt-out and address must be in email)
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Other IssuesOther Issues
FTC and Congress- Behavioral Advertising
• Tell consumers what is happening & allow opt-out (we hope—working against opt-in)
• Applies to you if you advertise on others’ web site; allow third-party ads on your web sites
- Prerecorded messages• Must have written consent by 9/1/09
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Other IssuesOther Issues
State Issues- Do No Mail—many bills no action• Mail Moves America is very active—join it
- SSUTA—States looking for funds thus requiring collection of sales taxes for out of state marketers• Need Congressional approval• States not really streamlining
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Joe SchickJoe Schick
Director of Postal Affairs,Quad/Graphics, Inc.
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Reducing Postal CostsReducing Postal Costs
Address Management & Quality- Ensure accuracy, deliverability and that USPS
requirements are adhered to (Move Update)
Mailpiece Design
- Meet machinability/automation requirements while still being creative to draw response
Comail/Copalletize- Becoming a normal step in the production
process that is extremely successful in lowering postage costs while at the same time helping the USPS manage their costs
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Reducing Postal CostsReducing Postal Costs
Dropship
- Maximize number of SCF entries for postage savings and realize improved delivery
Targeted & Consistent Delivery
- Meet client in-home requirements
- Manage process around published USPS Service Standards and CETs (Critical Entry Times)
Postal Advocate/Consultant
- Help clients navigate through postal policies and regulations
- Relationship with USPS at all levels to represent clients’ interests when needed
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And Adding ValueAnd Adding Value
Database Management
- Right message to right address/person at the right time
- Environmental concerns
Consultative Direct Marketing Services
- Providing full service
- Credibility with clients – sell the value-added products and services
Personalization
- Proven to generate higher response when used in conjunction with other services
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And Adding ValueAnd Adding Value
VDP (Variable Data Print)
PURLs (Personal urls)
Paper & Ink Management
- Focus on quality of mailpiece to generate response
- Compatibility with USPS requirements for machinability and automation
- Environmental considerations
Environmental Consciousness & Applications
- Part of doing business from Day 1
- Mail Moves America
- Greening the Mail Task Force
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And Ensure the Long-Term Viability of the USPSAnd Ensure the Long-Term Viability of the USPS
Work As a Business Partner for Success with New Products and Services- IMB (Intelligent Mail Barcode)- FSS (Flats Sequencing System)
Support the USPS Politically- HR 22- Closing and/or consolidation of facilities
Involvement In USPS/Industry Initiatives- CEO Council- MTAC
Add Expertise To USPS and Industry Groups- Area Focus Groups- PCCs (Postal Customer Councils)
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Stephanie JacksonStephanie Jackson
Senior Manager, Strategic Marketing Solutions, Zinio Systems
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Factors impacting Direct Marketing Channel DistributionFactors impacting Direct Marketing Channel Distribution
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Logistical (cost)Logistical (cost) Print continues to increase in cost
Percentage ofCost attributed
to variousPrint
Production Efforts
Source: PPA
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EnvironmentalEnvironmental
Consumers and corporations are becoming more focused on green efforts
55% of Companies Have already
planned strategies to Go Green to increase their profitability*
*Harris Interactive
• Corporate Mandates to decrease paper in and paper out• Customer requests not to receive print
The Reality The Result
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GenerationalGenerational Multitasking families and the next
generation live on multiple channels at once
Families today live a 43 hour day :• 8.7 with media • 7.9 with technology (phone, games, music, )• 6 .2 with family and friends•10 with School or work,•8.1 with Sleep
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TechnologicalTechnological New technologies shift focus away from
traditional methods print to even newer forms of mobile interaction
Paper / PC Mobile Flex-Mobile Flex-Display Foldable
• Trees• Website• Zinio
• Apple• Zinio• Kindle• Sony
• Polymer Vision
• Qualcomm
• Plastic Logic
• Liquavista• MEMS• Samsung
• Not unimaginable
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Use of Multiple Channels Increases ResponseUse of Multiple Channels Increases Response
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Print to Mobile InteractionPrint to Mobile InteractionInclude SMS calls inside print
magazines. Advertisers or Publishers insert a content specific code on the printed material.
•Featured Articles, Editorial and Advertisements. •Bonus content that doesn’t fit in the print edition. •Promotional messages •Coupons •Rebate forms •Rich media samples – audio & video
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Online/Digital to Print InteractionOnline/Digital to Print Interaction Insert Printable Coupons within Digital
Magazines
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Print to PURLPrint to PURL Drive to PURL from print to convert print
optins to digital
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David MillerDavid Miller
Senior Director, Product Management for Ranking, Pricing & Optimization,
Yahoo! Sponsored Search
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AgendaAgenda
Economics of Search Marketing
Search Marketing as Part of Direct Marketing Umbrella
Some Examples of Search Marketing / DM Interplay
Future of Search Marketing in DM context
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Search MarketingSearch Marketing
Beautiful and instant marriage of a large volume of explicit statements of interest with marketing offers
‘Near real time’ measurable performance
Necessary, but not sufficient for optimal direct marketing
- Even Yahoo! uses combination of online marketing and direct mail to market its own search marketing product
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Yahoo Search Commands a Large and Attractive Global AudienceYahoo Search Commands a Large and Attractive Global Audience
53 million people use Yahoo! US every day*
2.8 billion Y! US searches conducted every month*
Search Marketing represents an extremely powerful acquisition tool, yet only ~40% of US DM advertisers use any Search Marketing**
*comScore Media Metrix 2.0 January 2009.**Forrester Research, Understanding the Marketing and IT Relationship, March 2009.
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Search Marketing as a DM ComplementSearch Marketing as a DM Complement
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Display adWebBlogsForums
Contact Strategies
+
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Example 1: Drive Search Traffic to Your SiteExample 1: Drive Search Traffic to Your Site
Drive awareness Drive online sales – in front of
customer at time of purchase Test marketing messaging (A/B)
- Product names- Direct mail or offline messaging
Analyze online behavior to inform other channel marketing- Assess offline demand, inventory,
pricing, product naming
Acquire, cultivate, and remarket to the customer
OfflineMarketing
Cycle Time: 6 mo ??Cost: >$10,000s ??
SearchMarketing
Cycle Time: 1 weekCost: $100s
Test
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Targeting ExamplesTargeting Examples
TemporalTime of dayDay of weekDemographic
GenderAge
GeoCountryStateDMACityZip
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Example 2: Target & Customize ExperiencesExample 2: Target & Customize Experiences
Siphon off geo, demo, and temporal targeted traffic- Send to custom landing pages- Cookie and “acquire” as “known”
customers- Test messaging and gauge
preferences/demand of segments- Learn value of your segments or
new segmentation
Influence & inform direct mail / store / phone / web / email strategies
Offline marketing to search marketing via ‘custom’ keyword- Enhanced by Search Retargeting
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Possible Future of Search Marketing + DMPossible Future of Search Marketing + DM
Enhanced cultivation & remarketing
When a ‘specific’ customer searches, do something ‘different’
Possibilities for ‘Specific’
Possibilities for ‘Different’
Previous clickPrevious conversionCurrent prospectCurrent customer
Search Marketing: Custom bid Custom offer
messaging Custom landing page
Other Direct Marketing:
Trigger for a custom email/mailer/call/display ad offer
The Power of Direct: Relevance. Responsibility. Results.The Power of Direct: Relevance. Responsibility. Results.
DiscussionDiscussionandand
Questions & Questions & AnswersAnswers
DiscussionDiscussionandand
Questions & Questions & AnswersAnswers
