Direct marketers say Web sales are more profitable IT TOOK A WHILE, but direct marketers are finally starting to make money on their online sales.
Nearly two out of three respondents to DIRECT’s 2000 online marketing survey said their Web sales are now profitable. And almost 25% said they are more profitable than those generated through other direct marketing channels. The latter percentage has almost doubled from 1999.
That doesn’t mean they are equally profitable for everyone; consumer marketers were more likely to report profitability than their business-to-business counterparts. But there was also a corresponding falloff in the number of firms saying their sites were less profitable than they were last year.
The change in profitability may be due to maturing efforts that require less investment. While 36% of all respondents in 1999 said it was too early to evaluate the profitability of their programs, only 15% said this was the case in 2000.
Company size and revenue levels made no difference. Over two-thirds of those surveyed with annual sales under $10 million said their Web site orders were profitable, compared with 65% of those with sales of more than $10 million.
The number of respondents indicating they had a Web site remained constant with last year’s total. In both years, roughly four in five said their company had one.
Total company revenue was the greatest single determinant as to whether a company was online at all. Web sites were nearly ubiquitous among firms that had more than $10 million in annual revenue, while only 59% of those with less than $10 million indicated they had a site.
Not all electronic marketing is done on the Internet. E-mail is taking its place among the media mix, with nearly half of all respondents indicating that they used e-mail for marketing purposes.
Mixed-focus firms, which offer their wares to both businesses and consumers, were the heaviest users of e-mail as a marketing tool, with 72% indicating that they did so. B-to-B firms followed, with 49%. Consumer firms lagged behind the others, with only 30% saying they used e-mail for marketing.
Most use e-mail to target both prospects and customers, with nearly 69% saying they did so. Another 27% targeted customers only through this channel, while 3% said they used it exclusively to mine for prospects.
Sixteen percent of all respondents said that they rent outside e-mail lists for their e-mail campaigns. Among the types of companies broken out by customer base, more than a quarter of the mixed-focus firms said they rented outside e-mail lists, compared with one in every five consumer firms and 11% of the B-to-B firms.
Privacy Policies The number of companies indicating that they had privacy policies on their Web sites inched up between 1999 and 2000. In 1999 just under half – 49.5% – said they did, while in 2000 that number rose to 53.4%.
Among B-to-B firms, 36% said they posted privacy policies, while 59% of consumer companies indicated they placed privacy statements on their sites. Mixed-focus firms were the most conscientious about placing them, with two-thirds saying that they did so.
Companies that placed more than half of their advertising budget into direct marketing were more likely to post policy statements than those that used less than half for direct marketing: Of the latter, only 55% have policy statements.
Larger companies, with annual revenue in excess of $10 million, were much more likely to post privacy statements than smaller ones.
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