Is digital killing direct mail?

An article in this weeks edition in Marketing Week questioned the future of direct mail in the face or increased pressure from digital direct response channels.  With direct mail volume dropping 7.4% from 2006-2007 and showing a continual decline in since 2004 has the measurability and accountability of digital mediums put pay to the direct mail industry?

For a two page, center piece article  I have to say that this seemed to me like a massive over reaction to the success of digital in the past few years.  The article eventually comes to some sensible conclusions about the evolution rather than death of direct mail and EHS Brann CEO Matt Atkinson makes the most valid point “consumers are not saying they don’t want direct mail, they are saying they don’t want junk mail!”.  it is not about cutting direct mail from you marketing mix but rather becoming more intelligent and targeted in your activity.  This is likely to mean volumes will drop but not necessarily that return will follow, more likely you will just become more efficient.

Every piece of the marketing mix has a benefit, either direct return or impact on other media.  Do you think there would be so many searches for finance companies brand terms on the search engines if the companies didn’t do so much offline activity? Of course there wouldn’t, it is all about striking the balance and appreciating the impact one media has on another.  I have experienced it first hand when a company has cut offline activity as they are getting better returns online only to see a drop in overall performance as their offline exposure stops pushing people to the search engines.

With the growing emergence of digital channels it was always going to impact other channels in one way or another, after all, economic circumstances aside, there are only every going to be a finite number of people in the market for your product at any given time.  It makes sense then, that if a percentage of these people start to use the Internet to find a supplier then the number of people using the other channels should see a dip.  What marketers really need to consider though is how to make the most of the whole marketing mix in order to maximise the opportunities the market holds, and rather than wield the sword at the under-performing media, stop to think about the impact they each have on one another.

BBC iPlayer leads the way in on demand online

BBC’s iPlayer service is wiping the floor with its rivals in the on demand TV market recording up to 500,000 programme downloads a day. 11m TV shows were streamed or downloaded through iPlayer in January in comparison to 2.7m for channel 4’s system 4od and 2m for ITV. The massive amounts of advertising dollars spent promoting the service have no doubt prompted its dominance but will also have given the on demand market as a whole a boost as people become more aware that you can watch your favourite shows from your laptop at any time of the day and night.

The opportunity and issue now facing BBC iPlayer is how to monetise this growing service without annoying its users. Advertising in online video files has been debated far and wide and yet the most appropriate format is yet to be decided upon. Pre-roll, post-roll and overlay are the main considerations with the option of mid roll placements as well but all interfere with the user experience in some way. The key is to strike a balance between the exposure of the ad and the interference with the viewing.

Youtube are still to achieve this and at a recent seminar they were still asking the advertisers what their preference would be for the ads. Youtube have gone with an overlay style ad for in video but admitted trialling preroll and post roll with both showing negative results. I wonder whether the BBC will be able to crack the code?

Service

Unique streams Dec 2007

1

YouTube.com

20,207,947

2

BBC sites

5,129,442

3

ITV sites

1,727,567

4

Channel4.com

769,927

Total Internet

28,686,485

Planet-iphones and the opportunity in niche sectors

I came across a site today which I found interesting. Firstly if you are an i-phone user it is very interesting, offering all new plug ins and applications for you i-phone from wallpapers, games, icons and general accessories for the latest must have gadget from Apple. The site offers a whole heap of options for the i-phone user and makes the customisation of your i-phone simple and easy to do as the sites includes instructions of how to install the applications and plug-ins it provides.

But secondly it got me thinking about how the development of technologies such as these create new opportunities for sharp entrepreneurs in a niche market. For those quick enough to set themselves up as the “go to” provider for the latest gadget or gizmo there can be a very lucrative path ahead. What this requires however is to be one step ahead of the rest of the marketplace and get a foothold before the competition. Take the site in question planet-iphones.com, 12 months ago they wouldn’t have had a business. The i-phone wasn’t released and even if you knew it was going to be it would be impossible to develop i-phone applications or iphone mods unless you had insider information on how the platform was going to be built. Now, 8 months on from the launch you have sites such as planet-iphones offering a full spectrum of products for the handset. In this case the early bird certainly does catch the worm and those that can react quickly enough to new phenomenon can reap the rewards.A search on Google for iphone wallpapersreveals a lot of sites who are attempting to do just this, and establish themselves in this market, but on research none are quite as extensive as planet-iphones. So my advice? If you are an owner of an iphone, and are looking for an iphone wallpaper, pay them a visit and modify to you hearts content! If you are an entrepreneur, get thinking about what could be the next big niche to exploit and it could just pay dividends.

Are we heading for web bust 2.0?

A number of recent articles have suggested we may be heading for the second web crash.  Most of these theories are base don the inflated prices being paid for barely profitable companies because they fall under the category of “social media” or because they are the latest phenomenon on the web.  Others are quoting the fact that advertiser supply is outstripping demand and many websites are being left with unfulfilled inventory.

But does this signify the beginning of the end? I don’t think so.  I’m not saying change isn’t around the corner, but at the end of the day many companies are yet to fully embrace the potential of the Internet and so there is still growth on the horizon as far as I can see.  I agree with the comments about inflated prices, Google is unlikely to ever recoup the $1.65 Billion it paid for Youtube unless it can come up with a more innovative way of monetising its traffic.  Similarly, although it is a profitable network, Microsoft paid a massively inflated price of $240 million for a measly 1.6% share in Facebook which it will never see a return on (in my humble opinion).  But this does not necessarily mean that we are seeing a repeat of the dot com collapse.  For a start, Google and MSN can afford it, they have VERY large warchest built up from years of successful ventures.

More likely, for me, is that we will see a fall in the ad prices demanded as inventory grows and needs to be fulfilled.  This may mean the demise of some smaller players in the market but those with a strong legacy and a solid proposition will survive and continue to prosper.  In any industry you are at risk unless you have a solid offering and the Internet is no different, just because a few bedroom companies go out of business doesn’t make it the end of the Internet!

All of this can only be good for advertisers as the market levels out, and potentially dips a little, so will the prices.  Bring it on I say!

web 3.0? where did 2.0 go?

Just as people are getting to grips with the so called web 2.0 phenomenon already there are people within the internet market touting the arrival of web 3.0! hang on, what happened there? did I miss something?

Apparently, where as web 2.0 was about engagement and interaction, web 3.0 is the “semantic web”, where computer intelligence interprets information without use intervention.  An example given by Ruth Mortimer of brand strategy, is that of search engine spiders and how, with the emergence of web 3.0, will be able to interpret context and meaning of text within a page rather than simply looking at code without meaning, hence giving a more sophisticated search result.

But where did web 2.0 go? I think there is a real danger here of people getting ahead of themselves and predicting the future before theyve mastered the present.  Many companies are yet to embrace the web 2.0 ethic (and some even the basics of online!) and to go around touting the revolution is scare mongering in the extreme unless it is given some context.  My advice to companies reading these articles would be to look at your webstie from a customers point of view, decide what they would want to see, what they would want to do and provide this functionality.  If you get the basics right to start with and put in place an infrastructure solid enough to support it you will be in a strong postion to embrace whatever new technologies are around the corner.