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What can we learn from the Frontwire Digital Messaging Survey?
There were a few surprises in the findings of The Frontwire 2002 Digital Messaging Survey, which is released at the end of the month. The purpose of the exercise was to uncover how the UK’s digital marketing community exploits digital messaging media – email, SMS and Streaming Video - for marketing purposes.
In all Frontwire spoke to over 230 brand owners and agency marketers and were encouraged to find that levels of use are high and growing both in terms of volume and sophistication. But it was not all good news because in many cases it seems that full-value from digital marketing campaigns is not being adequately quantified or realised.
In his foreword, Professor Derek Holder, Managing Director of the Institute of Direct Marketing observes, "While it is encouraging to see that levels of use are high and growing, (…) measurement, if practised at all, is not always done as well as it could or should be."
"In a years’ time (…) the volume of campaigns that use digital messaging will have increased significantly. Let’s just hope this growth is accompanied by a deeper understanding of the digital marketing as part of the media-neutral landscape." He continues.
Will email replace direct mail?
The majority of respondents agree that digital messaging has diverse uses – including acquisition and retention - and that it also meets a wide range of marketing objectives.
Most also considered digital marketing to be more cost effective and responsive than traditional direct mail and other marketing media. Indeed over 50% agreed or strongly felt that digital messaging would start to replace direct mail.
Email is more responsive than Direct Mail
Justin Anderson, Managing Director of Frontwire, who commissioned the research comments, "This statistic should raise alarm bells. Email marketing is without doubt hugely cost effective. But considering it an absolute replacement for direct mail - or any other medium for that matter - suggests people need to better understand the characteristics of all marketing media and judge each by its own merits. That said, I do believe we will see a growing proportion of marketing budget shift to digital in the near future, while the best campaigns will continue to employ a healthy mix of appropriate media."
Is there a difference between B2B and B2C?
The survey did uncover some differences between current and predicted digital marketing applications when comparing B2B with B2C. For example, the majority of SMS/Text campaigns had a B2C focus. But streaming video was just as likely to have been used for B2B campaign as B2C, added to which the growth in this area for 2003 and beyond was higher amongst the B2B marketers.
B2C respondents also indicated that they used HTML more consistently, perhaps justifying the extra production costs with the higher volumes typical of consumer campaigns. However B2B marketers should note that the survey also found HTML emails typically generate a higher response rates – whatever the audience - meaning the additional investment pays off even on lower volume campaigns.What makes a campaign more effective?
Experimentation certainly pays. Those who have experimented with SMS and streaming video were more likely to feel their objectives had been achieved or over-achieved.
And so does investment. Respondents who reported more investment in digital marketing campaigns, are more likely to achieve the objectives they set.
Those committing to the following are reaping the biggest rewards:
• Bigger budgets
• Specialised software
• Outsourcing to a specialist supplier
• Experience
• Using graphic-designed (HTML) rather than plain text for e-mail elements
• Using a wider variety of digital media – email, SMS/Text messaging and streaming video
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Justin Anderson says, "Looking at the survey findings it would appear that the DIY approach is a false economy. The quality of what is produced is generally worse and the tendency to track and measure is limited. The few ‘DIYers’ who did to report success rates were generally disappointed. Added to which most cannot account for the human resource an in-house job consumes. This means the true ROI can never be calculated since the precise cost of running these campaigns is an unknown quantity."
What are the emerging issues?
Although considered useful for a range of purposes, digital marketing seemed to get the highest praise when being used for conducting market research. This makes perfect sense since it can contact high volumes of people and gather and analyse information from them at a lower cost and greater speed than old media – the Digital Marketing Survey itself being an obvious example. This suggests this area is ripe for growth.
Less encouraging was the fact that although the vast majority of digital marketers considered digital media a good marketing vehicle as many as 27.6% of respondents reported they are not tracking their campaigns.
How campaigns are currently being tracked
Anderson comments, "It is more than a little ironic that while a selection of digital media’s strengths (its low cost, high volume and high speed) are being taken advantage of, others like the ability to track, to capture data and to measure campaign performance are not. As a result nearly a third of the respondents are denying themselves the information to justify current and improve future campaigns."
So to justify the growth in use there is an urgent need for a development of real understanding of the full range of benefits of using digital messaging for marketing purposes. Holder qualifies this, "We must remember that despite affecting this great sea change, digital marketing is still in its infancy. We are all learning better ways to make use of the capability it has and finding new applications to extend what we are able to do it."
Which indicates we are all some way down the learning curve yet.
The full report is available to all respondents this week. Non-respondents wishing to request a copy should click here.
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Editor’s opinion – Internet World
Internet World 2002 and its co-located events attracted a reported 11,500 visitors this year and hosted stands for over 300 business and technology solutions suppliers. But was it worthwhile?
Were you, like me, one of the many visitors to Internet World eager to find the latest appliances and applications but who left thoroughly disappointed?
My visit was tainted not by the apparent lack of innovation in the room but rather the contrast I experienced because I popped into Dixons en route. Here, in the High Street chain store, were gadgets galore. The very latest kit – Laptops, PDAs, mobile phones, MP3 players, DVDs and more. And all available for immediate public consumption.
It appears that the levels of consumer desire for the latest tecchie gear are at an all-time high and that in response the time-gap between product development and public deployment is disappearing.
Yet in this ripe marketplace how many Internet World exhibitors are even attempting to get ahead of the game? The stand designs might have undergone an upgrade, but the wares they were promoting compared to last year had not.
Surely the public appetite I witnessed at Dixons for new technology should feed the creative minds of the folk in digital businesses. Doesn’t anyone know what’s next? Or do we have to wait, as we did with SMS, to let Jo Public take the lead and dictate to us what is the next killer application?
Worse still, is there nothing more to develop? Is what I experienced at Internet World not a plateau but the pinnacle? Say it ain’t so.
Responses to: ruth.stone@frontwire.com
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Focus on recruitment marketing.
Wired-Up discusses the impact of the internet on recruitment marketing with Michael Stevenson, Head of Marketing at executive recruitment specialists Michael Page International.
Wired-Up: How has the introduction of digital channels affected Michael Page’s approach to marketing?
MS: Michael Page’s marketing has always recognised the need to keep in touch with job seekers and client companies. 10 years ago we adopted a tailored approach to our communications, using direct mail to deliver sector-specific quarterly newsletters to our clients and job candidates. We also produced videos featuring the likes of Rowan Atkinson, Ade Edmundson, Mel Smith & Griff-Rhys Jones. These were screened in local cinemas. We invited clients & candidates, but such activities, although effective, were quite expensive.
When the Internet boom came along many analysts predicted it would completely change, beyond all recognition, the recruitment industry. Reports were published that forecast a fundamental shift in the very structure of the business. They warned that every aspect of the recruitment process would go online and that businesses that did not completely adapt, would not survive.
But in my opinion too many people got caught up in what was possible, rather than what was probable. The rate and degree of change was vastly over-estimated and most analysts forgot that recruitment is about personal relationships. It’s a people business, something that cannot completely be replicated in the virtual world. Technology is simply a facilitator.
The digital channels have brought two important things to the business: speed and convenience. In response Michael Page International is weaving digital technology into the heart of the business and its marketing. But the core approach has not changed because we continue to manage personal communications.
Wired-Up: So what has been the impact of including digital channels?
MS: In hindsight, direct mail now seems very costly and very slow. Now that we have embraced email marketing the traditional eight-week lead-time has now fallen dramatically, and we’re benefiting in two ways - costs have come down and turnaround times are up.
As a consequence we are able to further segment our marketing communications. Where we once produced a generic newsletter for marketing and sales, we are now developing more tailored communications for disciplines within the sector – PR, design, advertising, direct marketing and so on…
In addition we’re getting far more for our marketing effort, the information Frontwire feeds back is very detailed. We know the exact number of sends, arrivals, opens, responses, unsubscribes, forwards, website visits and clicks within the email itself that results from each communication.
And because of that we can assess the success of each discrete campaign and benchmark these stats against the responses to other campaigns – whether by email or other media.
Historically we were getting 2-3% response rates to the direct mail effort, but with the emails the range is between 8% and 20%.
Wired-Up: So in essence by using digital channels it seems you are replicating what you have always done but spending less and achieving more.
MS: We are certainly achieving more, but it is not a simple matter of replication. The internet has enabled us to do things we were unable to do beforehand.
For example a prime market with whom we could not sustain a relationship previously is the travelling community in search of temporary work. Keeping tabs on this migrant sector, which largely comprises Australians and South Africans in the UK, was virtually impossible before web-based email. But now, although their postal address is subject to almost constant flux, their email address remains constant.
We recently sent an email to 11,500 on what we call the ‘global opportunity’ list. It achieved a 96% open rate, 8% of recipients went through to the web site and 575 additional people received the email as a result of forwarding. This could not have been achieved using traditional media.
So do you expect to migrate all your marketing effort to digital over time?
No. Michael Page International will continue to take an integrated approach to our communications strategy. The focus will be to leverage our brand, running the same core messages and creative executions over a variety of media, both above and below the line. In our experience this approach will help to build the brand and maximise response more efficiently, allowing us to cast the net that little bit wider.
Added to which we are evolving the way we use email. Like most organisations we are still at the experimental stage and take every opportunity to learn what works best through the results of each campaign. It is still very much early days.
Visit the website www.michaelpage.co.uk
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Broadband broadens reach
BTopenworld has announced it has now reached the milestone of 100,000 active broadband consumer customers. It attributes this figure to a price slash introduced earlier this month. The figure compares favourably with BT’s broadband business customers who now number 61,600.
DMA launches Baby Mailing Preference Service
In mid-July the DMA will launch a baby mailing preference service. The initiative follows a suggestion from a colleague in the industry who lost twin babies during her pregnancy. Wired-Up readers interested in knowing more should visit www.mpsonline.org.uk
US Schools take on handhelds
The call for more computers in schools was upgraded at a recent US conference where a number of educators concurred that handheld computers are the best and quickest way to ensure every student their own computer. Many US schools already use the devices and can download new applications onto them for use in other classes.
Manufacturer Texas Instruments is using the newly-expressed need to expand its product range beyond the humble calculator to include handhelds that can be used in other subject areas. "We're not focused on doing PDAs for business," said Tom Ferrio, vice president of education for Texas Instruments.
While Gartner warns businesses of the costs of implementing PDAs
A new report by analyst firm Gartner calculates that PDA ownership in businesses can cost as much as $4,392 per year per user. The calculation is made by bringing the costs of hardware, software and training together. However, Gartner does concede that in some cases the business benefits – workforce efficiency, increased speed of communication and so on – can make the investment worthwhile. The report advises businesses considering deploying PDAs to the workforce to weigh up the benefits.
Permission granted
Wired-Up has secured an audience with permission marketing guru Seth Godin. If you have any questions or comments for Seth post them to ruth.stone@frontwire.com
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