Direct marketing is a form of advertising where organizations communicate directly to customers through a variety of media including cell phone text messaging, email, websites, online adverts, database marketing, fliers, catalog distribution, promotional letters, targeted television, newspapers, magazine advertisements, and outdoor advertising. Among practitioners, it is also known as direct response marketing.
Direct marketing is attractive to many marketers because its results, positive or otherwise, can be measured directly. For example, if a marketer sends out 1,000 solicitations by mail and 100 respond to the promotion, the marketer can say with confidence that campaign led directly to a 10% conversion. This metric is known as the ‘response rate‘, and it is one of many clearly quantifiable success metrics employed by direct marketers. In contrast, general advertising uses indirect measurements, such as awareness or engagement, since there is no direct response from a consumer. Measurement of results is a fundamental element in successful direct marketing.
One of the other significant benefits of direct marketing is that it enables promoting products or services that might not be known to consumers. Products or service with a sound value proposition, matched with an attractive offer, supported with effective communication, delivered through a suitable direct marketing channel and targeting the relevant customer segment can result in a very effective cost of acquisition. Relative to other channels of distribution (say retailing) direct marketing as a practice principally relies on the proposition, offer, communication, choice of channel and the target customer and so less dependent on the brand strength. Despite the proven ability of direct marketing to generate measurable results, most companies continue to use general or branding advertising to market their products or services.
The Internet has made it easier for marketing managers to measure the results of a campaign. This is often achieved by using a specific website landing page directly relating to the promotional material. A call to action will ask the customer to visit the landing page, and the effectiveness of the campaign can be measured by taking the number of promotional messages distributed and dividing it into the number of responses. Another way to measure the results is to compare the projected sales or generated leads for a given term with the actual sales or leads after a direct advertising campaign. Some companies use conversion rate as a key metric while others use revenue as the key metric.