Ann Raider has a pair of slides in her “Brave New World” presentation that never fails to get her audience to sit up and take notice. The first one says:
Today
* 90% mass advertising
* 10% direct advertising
The second one says:
Tomorrow
* 30% mass advertising
* 70% direct advertising
Media continues to fragment into ever-increasing splinters, and change has become a daily staple in a technology-dependent world. So it’s hardly inconceivable that Raider’s vision may come to pass sometime during the approaching 21st century. Then she tells you that this drastic reversal will take place within three or four years.
“Some big things will happen in direct marketing, printing technology, and in-store kiosks in the next few years,” says Raider, evp of Consumer Card Marketing in Braintree, MA. “And it’s going to happen a lot more quickly than scanners did.”
Raider, whose company administers card-based loyalty programs in 50 supermarket chains nationwide, says database technology is already in place that can enable packaged goods marketers to communicate individually with target consumers.
50 supermarket chains nationwide, says database technology is already in place that can enable packaged goods marketers to communicate individually with target consumers.
“Databases are going to increase at a staggering rate, and their cost is going to go down. We can already take a store’s transaction log and use it to tailor individual offers,” says Raider. “You’re going to see a massive change to in-store using direct mail and kiosks, and there are going to be increasing opportunities for brands to tie in with retailers on loyalty events. Marketers will stop talking about share of market and start talking about share of customer.”
Ah, but are brand marketers brave enough to dive headlong into this Brave New World? One technology purveyor, Phoneworks president Brand Wendkos, says he’s still waiting for the charge of the Marketing Light Brigade.
“The smart database, the database that thinks before it acts, is what it’s all going to be about, but very few promotion people are taking advantage of it,” says Wendkos, whose St. Petersburg, FL, company specializes in interactive telephone promotions.
Modern database technology, contends Wendkos, already has the ability to transform common mass promotional tools into one-to-one marketing machines. “You can add a research component to a traditional sweepstakes, asking on the entry form, for instance, ‘What do you eat for breakfast?’ But what happens to that data? It comes into headquarters and maybe somebody will compile it someday,” says Wendkos. “Now, using digital technology, you can take that data, compile it in real time, and use it to come back to consumers with tailored offers. But most marketers have brain-freeze about it. Eighty percent of everything done is still done the old way.”
That persists because traditional methods still get the job done, in most cases. “The same old thing will continue to work in the same old way, but not as effectively as promotions using newer methods,” says Catalina Marketing vp David Diamond. “Technology provides marketers the opportunity to do what they do better. It has everything to do with targeting. Data mining allows us to do customer-specific direct marketing – essentially a different mailer for each shopper.”
Catalina, which succeeded in adding an electronic component to coupons with its Checkout Coupon system, is making steady progress in its mission to harness every marketing guru’s ballyhooed medium of the future – the Internet. While couponing’s progress on the Web has been slow due to the security problems inherent in people printing out their own coupons, Catalina is making headway by linking its Supermarkets Online product with its standing network of retailers. The system is already working with 7,100 stores, claims Diamond, and it should be up in 9,000 by this fall.
Catalina gets around the security issue by not letting consumers print out actual coupons. Instead, participants who have filled out questionnaires about their buying habits or who are linked to the system through their store loyalty cards, are sent e-mails with customized offers. What they print out is a “Value Page” containing a bar code embedded with all the offers. When they make prescribed purchases on their next shopping trip, the scanned bar code from the page triggers coupons to be issued from Checkout Coupon printers.
While Catalina’s Internet coupon lacks the high-tech marketing attribute of immediacy (you can’t redeem the coupon until after you shop), Supermarkets Online does exploit the unique marketing proposition of the Internet. “The difference between a traditional promotion and an Internet promotion is that, with a regular coupon, you get trial. With an Internet coupon promotion, you get trial and relationship,” says Andy Sernovitz, president of the Association for Interactive Media in Washington, DC.
Servovitz holds that marketers who succeed on the Internet will be the ones who are able to take traditional methods and adapt them to a new communications medium. “There is far too much attention on the Net as a technology, and far too little attention on it as free mail,” he observes. “All it is is an easier way to distribute the same types of messages and offers marketers have always delivered.”
The difficult part for marketers is finding ways to draw consumers to their Web sites, or to wean themselves off of Web sites as centers of marketing activity and find alternate ways to interact with targets on the Net. There’s no better time than the present to do it, according to Sernovitz, who takes issue with those who scoff at the Internet as a fledgling medium. “There are more people online today than there were TV sets when we landed on the moon,” he says. “The estimate is 50 million people online versus 49 million TV sets in 1969.”
Technology’s growing capability to deliver targeted audiences in an efficient manner will no doubt prove the key catalyst in the creation of a generation of cybermarketers. There will be another motivating factor, however, emanating, as it should, from the marketplace. Companies will be forced to consider the promotional worth of electronic goodies from CD-ROMs to smart cards to pagers if they want to reach the legion of video game-playing, Web-surfing, cell phone-toting young consumers.
“There is a new palette of colors today’s marketers can paint with,” says Wendkos, “if only someone would tell them about it.”
Well, we’ll do our best. Here are some bulletins from the front lines of promotion technology.
Network
