Digital continues to revolutionise direct marketing – but are smaller businesses tapping into its benefits?

Direct marketing has always been tricky for smaller business. Whilst ultimately more cost-effective for smaller business than the louder and pricier mass media of television, radio and press, its relative complexity made it challenging for time-poor smaller business operators – as anyone who has had to co-ordinate one would attest to.

Take a mail-out, for example. ‘Creative’ needed to be produced over several rounds of draft and amend. Then it usually needed to be printed off-site. Mailing lists had to be sought, labels printed, envelopes stuffed and then organised so that Australia Post can make sense of it. 

Trickier still is if the piece was around a given date, such as an invitation to an event.

Whilst digital technology has made this process much easier than in the past, it has also superseded it by acting as its distribution channel as well.

Clearly email was the first medium to make the printing and mailing processes redundant.

Wobbly first steps

Since the early 90s (and earlier for the real early adopters), businesses could transmit an email ‘piece’ to up to thousands of recipients simultaneously, saving a packet on printing and postage.

Whilst the earliest attempts were limited by unreliable and slow bandwidth and limited personalisation capabilities, before long fully graphical, personalised and even pre-scheduled email ‘blasts’ were within reach of the smallest business.

Unfortunately like many good things, email marketing’s star was shot down by unscrupulous operators who soon had our inboxes crammed with unsolicited junk email. 

Still it represented a brilliant means of communicating with your ‘opted in’ customers for very little cost.

Email delivers staggering ROI

In fact as recently as 2008, US marketers put the Return On Investment of email marketing at a staggering 4500% or a $45 return for every dollar spent on the tactic.

This was three times the success of the old mail-out and nearly eight times the ROI of outbound telemarketing.

Unfortunately, few smaller businesses in Australia took advantage of these capabilities. As of last year only 29% of smaller businesses employed email marketing as part of their marketing mix.

But before they had a chance to get their heads around these benefits, a newer and sexier form of direct marketing emerged.

Direct marketing on steroids and other performance enhancing substances

Social networking has taken direct marketing to a realm not even contemplated a decade ago. Social networking has not only made it possible to communicate directly to millions of prospects simultaneously, but allow it to be re-transmitted (or posted or tweeted) to their connections in turn.

Not only that, its recipients could start conversations about it, giving it much greater ‘shelf life’ than any medium before it.

But despite email resembling traditional mail pieces more than social networking, smaller business have embraced social networking much faster than email marketing, with 35% of businesses using social media last year – 6% more than the better established email marketing.

One reason for this is likely to be that by its nature, social networking for business is not dissimilar to personal social networking. The tools are identical; it’s just that your business communication may be less informal than your personal social networking.

But let’s not underestimate convenience and ease of use – telling factors when it comes to appealing to the aforementioned time-poor business operators.

Introducing direct mass marketing

Recent developments in online advertising are now blurring the lines between mass and direct marketing. While you can book advertisements for social networks like Facebook, just like you did with TV, radio or print, what makes it resemble direct marketing far more than ever before is the capability of data-gathering technology to serve ads to the exact audience you specify.

Yes, it can quite literally serve its ads strictly to the specific audience you want. If you want to target ‘housewives’ aged between 30 and 40 in the eastern suburbs, your ads will appear to precisely this audience, with no wastage whatsoever!

This capability is based not only on the information gathered when registering, but by the very words its users use when posting about their daily lives. In other words, if you are posting about cricket, ads about cricket will magically appear in your News feeds and other parts of your Facebook pages.

No wonder smaller business operators can take some time to embrace what are now marketing mainstays.

And why many are getting left behind their more digital-savvy competitors.

In addition to being a leading e-business educator to the small business sector, Craig Reardon is the founder and director of independent web services firm The E Team, which was established to address the special website and web marketing needs of SMEs in Melbourne and beyond.