If the mood at an industry trade fair is any indicator of that sector's health, then things are mighty fine in US direct marketing land. DMA-06, the US Direct Marketing Association's annual convention, held in late October, was alive with optimism and good karma from host city San Francisco. With the event opening on news that DM spend in the US is projected to grow 5.2 per cent to $175.2 billion (£92 billion) in 2007, the upbeat atmosphere in the Moscone Convention Center was not unfounded.
It was all a far cry from a few years ago. Then, the world's direct marketers piled into Orlando for the 2003 DMA convention, to be met by local newspaper headlines proclaiming: "spammers come to town". This year, delegates were greeted with a welcome letter and a figurative hug from state governor Arnold Schwarzenegger, keen to acknowledge DM's contribution to California's economy.
More than 10,000 delegates attended, mainly from the US and Europe but with good representation from Australia and South America too. "For the first time I understand the size of the global DM community," says Mel Collins, marketing and sales director at WWAV Rapp Collins in London, who visited the show with her client Capital One. "I feel part of a major billion-dollar industry in a way I haven't before."
The US DMA's annual convention is DM at its most excitable and exciting, combining a huge trade fair of 550-plus exhibitors, a meaty conference programme and wall-to-wall parties. This year, the themes of brand building using DM, international DM and the impact of social media and search were discussed against a backdrop of enthusiasm. No UK-style breast-beating or naval gazing for America's direct marketers.
Nor for the event's keynote speaker, Virgin Group founder Sir Richard Branson. He talked about himself, as usual, but in recounting the Virgin success story Branson conveyed that you can be anything you want to be and thereby set the optimistic tone of the conference.
Asked if in franchising the Virgin brand over 250 different businesses he was guilty of overstretch, Branson shook his head. The secret was to ensure the values of the original brand transferred across the various franchises. Delegates took in Branson's long hair, crumpled shirt and absolute candour, and lapped it all up. "I don't think Branson knows about DM but he spoke without notes and held delegates spellbound," says Caroline Roberts, the DMA UK's director of legal and public affairs, who was attending her third US DMA convention.
As for the rest of the conference agenda, the organisers ensured it was integrated, with talks embracing old and new DM. The sessions were a potpourri of everything, for those who wanted to snack on the basics or go the whole hog with advanced tips. You name it, they discussed it - search, blogs, mail, e-mail, multi-channel, printing and even branding, a smart move since US direct marketers are now realising that direct response is generated only after a branding push.
With the conference content so integrated, the DMA's decision to house the interactive pavilion in another wing of the venue, quite a trek from the main hall, was the event's one sour note. "Many of us exhibiting in the interactive marketing hall are not pleased," said Dave Lewis, vice president of alliances and market development at StrongMail Systems, who reported slow traffic. "Segregating us to the proverbial 'North 40' certainly didn't contribute to the spirit of integrated marketing."
DM services provider Harte-Hanks overcame the two-hall issue by taking booths on both sides of the venue, one in the main area housing multi-discipline DM companies and the other focused on interactive services. The US DMA promises to remove the digital divide at next year's event in Chicago.
Bryn Scott, director of marketing at ParadyszMatera, a firm specialising in list services and digital DM, found multi-channel was the buzz of DMA-06. "Everyone was definitely talking about it," Scott says. "It is no surprise. Clients are looking for the reporting, the tools and the metrics to be able to plan integrated campaigns across channels."
Back in the conference hall, delegates were hearing that despite the upbeat mood of America's DM sector, hurdles to DM's future do exist. "We may never run out of places to put advertising messages," US DMA president/CEO John Greco told delegates, "but we are very near to the limits of human ability to absorb them all. Something has to change."
One trend cited in several case studies, including Subaru of America and Capital One, was that of direct tactics working together with brand strategies. "If your brand promise doesn't resonate with your target audience, then your brand will fail," said Tom Klug of CFM Direct, Capital One's direct agency. "If you can make the brand promise tie in to a good offer, acquisition is going to be really easy."
Martin Nitsche, chief executive of Proximity Germany, said despite the rise of global brands, DM tactics are strong in their ability to localise efforts and retain cultural relevance. "It is a complicated thing," he said. "On the one hand, we have to get global recognition and brand consistency; on the other, we have to emphasise local cultures."
Other international insights were offered at the show's sessions. Patrick Bartlett, vice president of the catalogue division at Canada Post, urged US catalogue companies to explore a ripe Canadian market. He pointed out that while 84 per cent of Canadians open and read mail, only 135 major consumer catalogues exist in Canada as opposed to 13,000 in the US. "The IKEA catalogue is a coffee table book here," he added.
One area where the US market clearly trails other countries is in mobile marketing. "In Europe, the mobile device is king so we have done a lot to optimise how content appears in BlackBerries and on mobile phones," Tricia Robinson, an e-mail marketing veteran formerly of Premiere Global Services, told delegates.
John Battelle, co-founder of Wired and chairman and publisher of Federated Media, ended the show with a keynote about the importance of search. He said conversation more than conversion is the new currency online. Search enables new consumers to declare their intent directly. "Marketing has become a dialogue instead of being a one-sided persuasion," he said.
Of course, DM's success depends on whether consumers want to have that conversation in the first place. US consumers are gaining tremendous clout by controlling messages aimed at them, and the US is developing its own version of the UK's Mailing Preference Service. "They're terribly interested in the UK's experience with the MPS and so we exchanged information on what works and what doesn't," says the DMA UK's Caroline Roberts.
All in all, it was a good show, but with one caveat. The US DMA is still not recognised as fully representing the interests of interactive marketers, and the one big moan of DMA-06 was about the utter isolation of the interactive marketing pavilion. Yes, there were online companies at the show, but many of them had a strong traditional DM background. The upstarts and newsmakers in the rich media, search and social networking worlds were missing. US direct marketers and their trade body must make sure they embrace the interactive side of the business if they want to stay ahead of the game.
That said, there is little doubt that the conference was unlike any US DMA show in recent years. Maybe it was the San Francisco setting, maybe it was the glorious weather, maybe it was the mix of people. Or perhaps it was the pervading feeling at DMA-06 that, after years of being treated as a second-class citizen, direct marketing's time has finally come.
- Next year, direct marketing spend in the US is tipped to rise 5.2 per cent to exceed $175 billion
- More than 10,000 delegates were at the show, mostly from the US and Europe, but also from Australia and South America
- US marketers should embrace the opportunities that interactive DM can offer
Q&A - WHY WE WENT TO DMA-06
RICHARD GIBSON, commercial director, RSA
A good proportion of our business originates from clients in the US. Even though these clients may have offices here, the budgets originate in the States and the database decisions are taken there. And some Americans just don't want to travel. It's also a superb networking opportunity.
Key piece of information learned?
That direct mail is still king over there. Email has long since overtaken direct mail in terms of volume but clients are still using direct mail as a major acquisition method.
Does UK DM have much to learn from this event?
I think it's decreasing. Before the internet, overseas visitors had to travel to the US to hear (the latest developments). Now you can listen to speakers' webinars or read their books. The international visitor numbers were good - emerging DM markets such as Eastern Europe had good representation.
MEL COLLINS, marketing and sales director, WWAV Rapp Collins
I went with Capital One, our client here in the UK. They are the biggest DM spenders in the US and so they are quite integral to the US DMA. They went to catch up on online and digital marketing developments.
Key piece of learning?
There wasn't one big thing but lots of food for thought. Every single presentation I saw seemed to mention marketing strategies needing to link with corporate social responsibility. The opening address by Richard Branson nailed it on the head when he talked about airplane carbon emissions and how companies like his need to think about customer reaction to what they're doing.
Realising the size of the global DM community. I felt part of a billion-dollar industry in a way I haven't before. Also, knowing that the challenges we're all facing are being addressed in diverse ways in different markets.
JOHN MINNEC, co-president, DraftFCB
I used to work in advertising but I haven't missed a DMA US conference in the past 10 years. There were some of the most invigorating round table discussions I've ever heard - time just flew by. We need to be part of those discussions.
Key piece of information learned?
The presentations on video sharing sites YouTube and MySpace about integrating marketing into these media caught my eye. It was interesting to learn that the 'lonelygirl15' video on YouTube has been viewed by 38 million people - more than any other TV channel.
Does UK DM have much to learn from this event?
I don't know if what happens in the US is important here, but the US handles 40 per cent of the world's direct mail volume so there is a lot of learning from there. It's helpful to tell clients here what I learned in the US.
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