Direct marketing is back in vogue. It's seen as sexy again. For decades, traditional advertising triumphed as the more creative, innovative cousin of the industry. But when times are tough, executives want quick, maximum returns on their marketing spend.
"The only marketing discipline that allows you this is direct marketing because you can scientifically measure the returns. It's also cost-effective," says Brian Mdluli, CEO of the Direct Marketing Association of SA (DMA). Direct marketers were seen as the poor cousins of the industry because the discipline wasn't considered as sexy. "We're now finding our rightful place," he says.
Three years ago, direct marketing accounted for less than 5% of SA's marketing spend of about R30bn. Today it's worth more than R8bn. The DMA has over 240 corporate members and 1 000 individuals.
But SA still lags. Companies worldwide are allocating an average 60% of marketing spend on direct marketing and 30% on above-the-line advertising. In SA, it is the reverse.
"Marketing directors don't understand it," says Wunderman MD Debi Loftie-Eaton. Mdluli adds: "Because it's so specialised, traditional ad agencies get it wrong and this gives direct marketing a bad name."
Wunderman is seeing a shift. "Customer relationship management is returning as a buzzword," says Loftie-Eaton. It's also a matter of perception. "There are marketing directors who aren't interested in direct marketing because they personally hate what they call junk mail. They come in because they feel they have to. It's different in the black market. There, consumers say: It's great, we are being recognised as real consumers."
So, why is direct marketing rebounding? "It allows brands to start a dialogue with a very targeted audience. A TV ad, for example, doesn't allow you to have a conversation. It's not interactive," explains Mdluli. "Advertising is effective but in these times when every cent needs to be accounted for, it's not cost-effective."
For example, companies spending R2m on a 30-second TV commercial rely on average viewership statistics to justify their investment. But no-one can tell for sure. Direct marketing brings direct responses.
Profiling and e-mailing a targeted audience is one form of direct marketing. It is a multichannel discipline ranging from outbound call centres, mobile campaigns and direct-to-home catalogues, to direct response advertising (infomercials), Internet and e-commerce platforms, events, ambush marketing at sports stadiums and direct activation.
Because direct marketing is often deemed invasive, it is regulated by 12 pieces of legislation, including the Lotteries Act, National Credit Act, Consumer Protection Act and Protection of Personal Information Bill.
Among sectors most likely to use direct marketing are banks, insurance, cell networks and automotive. Wunderman has 15 staff working at Ford. "It's like a Ford within a Ford, " says Loftie-Eaton.
Wunderman is one of a handful of direct-marketing agencies in SA. "This is a specialist skill. It's an unappreciated part of the business," says Loftie-Eaton. "People don't come out of the AAA school of advertising and say they want to work for a direct-response agency. It's a different mindset. We are very consumer-focused. "
Finding the right skills poses a big challenge. "It's almost impossible to get skills from the ground up. Most training in direct marketing is on-the-job training. To click, you need to get a kick out of figures," says Loftie-Eaton. The DMA has prioritised training, but it will be many years before the industry can match its international peers.
