Chapter 13 Internet and DirectResponse Advertising

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Chapter 13 Internet and Direct-Response
Advertising
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Objectives_1

• Understand
• Effects of new technology on direct-response
  advertising
• The future growth of the Internet and
  direct-response
• Planning for marketing on the Internet

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Objectives_2

• Understand
• The concept of consumer relationship management
• The principles of integrated marketing and direct
  response
• Major components of direct-response marketing

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Pros of Internet Advertising

• Relatively inexpensive, quick, and easily
  available
• Interactive audio and video
• Flexibility

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Cons of Internet Advertising

• Consumers still hesitate when it comes to
  purchasing online
• Audience fragmentation due to vast number of
  sites

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Pros of Direct Response

• Potential to reach any prospect on a
  geographical, product usage, or demographic basis
• Measurable medium with opportunities for
  sales-related response
• Personalization and relationship-building
  possible

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Cons of Direct Response

• High cost per contact
• Updating lists can be challenging
• Privacy issues are an increasing concern

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Top Internet Advertisers

• Vonage Holdings
• GUS
• Time Warner
• Dell
• United Online

• Verizon
• Netflix
• TD Ameritrade
• General Motors
• Hewlett-Packard

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Customer Relationship Marketing (CRM)

• Customer relationship marketing is a management
  concept that organizes a business according to
  the needs of the consumer.

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Importance of the Internet for CRM

• More effective cross-selling and upselling
• Higher customer retention and loyalty
• Higher customer profitability
• Higher response to marketing campaigns
• More effective investment of resources

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Privacy-Related Vocabulary Terms
Spam
Opt-in
Opt-out
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Guidelines for Email Marketing_1

• Use an honest subject line.
• Include a valid return email address as well as a
  physical address.
• Clearly identify the subject and the sender at
  the beginning of the email.
• Provide a clear and conspicuous email option for
  consumers to remove themselves from the list.

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Guidelines for Email Marketing_2

• Ensure that electronic name-removal features are
  prompt and reliable.
• Offer options for removal of consumers from
  commercial email lists.
• Do not acquire email addresses through automated
  systems without consent of consumer.
• Do not provide lists to a third party.
• Provide a link to the privacy policy.

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Elements of Good Online Privacy Policies
Disclosure of what information is collected
Opt-out option
Consumer access to their personal information
Security standards for information use and
access
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Complementary Media
Magazine ads can drive traffic to websites.
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Internet Dayparts

• Early morning, 600-800am, Monday-Friday
• Daytime, 800am-500pm, Monday-Friday
• Evening, 500-1100pm, Monday-Friday
• Late night, 1100pm-600am, Monday-Friday
• Weekends, all day

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Advertising Uses of the Internet
As a source of direct sales
As a source of advertising-supported
communications
As a source of marketing and promotion
information
As builders of consumer engagement
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Objectives of Direct Response
Direct orders
Lead generation
Traffic generation
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Advantages of Direct Response

• Direct response is targeted communication
• Direct response is measurable
• The message is personal

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DRTV Combines Direct Response and Television

• Shows product in use and provides opportunities
  for product demonstrations
• Creates excitement for a product
• Offers immediate results
• Lower production costs
• Spots not time sensitive
• Complements retail sales
• Offers ability to test product benefits

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Catalogs
Catalogs combine direct response and online
sites.
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Factors Affecting the Move from Prospect to
Buyer for Catalog Sales

• The right product
• Exciting creative execution
• Reach a targeted group of prospects
• Fulfillment and customer service
• Database management

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Organizations Involved in Direct-Mail Advertising

• List brokers
• List compilers
• List managers

• Service bureaus
• Lettershops
• Response lists

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Direct Marketing Association
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Elements Tested in Direct Mailings
List tests
Offer tests
Format tests
Copy tests
Layout and design tests
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Other Direct-Mail Techniques
Package inserts
Cooperative mailings
Ride- alongs
Statement stuffers
Ticket jackets
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For Discussion

• What have been some of the major factor causing
  growth of direct-response advertising?
• What role does database marketing play in
  direct-response advertising?