Direct marketing legend Martin Baier died on June 30, 2016. He was 93 years old. Martin was truly one of the founding fathers of the direct marketing field, and a staunch supporter and active contributor to direct marketing education nearly his entire professional life. His keen intellect and business vision, combined with his many significant intellectual contributions, will live on forever in our marketing discipline.
Direct Digital & Data-Driven Marketing Direct Digital & Data-Driven Marketing 5th Edition Lisa Spiller Los Angeles London New Delhi Singapore Washington DC Melbourne SAGE Publications Ltd Oliver’s Yard 55 City Road London EC1Y 1SP SAGE Publications Inc 2455 Teller Road Thousand Oaks, California 91320 SAGE Publications India Pvt Ltd B 1/I Mohan Cooperative Industrial Area Mathura Road New Delhi 110 044 SAGE Publications Asia-Pacific Pte Ltd Church Street #10-04 Samsung Hub Singapore 049483 © Lisa D Spiller 2020 Domino’s Case Copyright © Matthew H Sauber and David W Marold 2020 First published as Contemporary Direct Marketing by Prentice Hall in 2004 Second edition published in 2010 Third edition published as Contemporary Direct and Interactive Marketing by Racom Communications in 2012 Fourth edition published in 2018 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act, 1988, this publication may be reproduced, stored or transmitted in any form, or by any means, only with the prior permission in writing of the publishers, or in the case of reprographic reproduction, in accordance with the terms of licences issued by the Copyright Licensing Agency Enquiries concerning reproduction outside those terms should be sent to the publishers Library of Congress Control Number: 2019955360 British Library Cataloguing in Publication data A catalogue record for this book is available from the British Library ISBN 978-1-5297-0818-9 ISBN 978-1-5297-0817-2 (pbk) Editor: Matthew Waters Assistant editor: Jasleen Kaur Assistant editor, digital: Sunita Patel Production editor: Nicola Carrier Copyeditor: Sharon Cawood Proofreader: Leigh C Smithson Indexer: Silvia Benvenuto Marketing manager: Lucia Sweet Cover design: Francis Kenney Typeset by: C&M Digitals (P) Ltd, Chennai, India Printed in the UK At SAGE we take sustainability seriously Most of our products are printed in the UK using responsibly sourced papers and boards When we print overseas we ensure sustainable papers are used as measured by the PREPS grading system We undertake an annual audit to monitor our sustainability Dedication Martin Baier Martin Baier Direct marketing legend Martin Baier died on June 30, 2016 He was 93 years old Martin was truly one of the founding fathers of the direct marketing field, and a staunch supporter and active contributor to direct marketing education nearly his entire professional life His keen intellect and business vision, combined with his many significant intellectual contributions, will live on forever in our marketing discipline Martin helped define direct marketing and was a key figure in developing and expanding the direct marketing industry He was known as the ‘Father of Zip Code Marketing’ after writing an article in 1967 for the Harvard Business Review entitled ‘Zip Code: New Tool for Market Segmentation.’ Martin Baier authored or coauthored many seminal books on direct marketing during his lifetime His Elements of Direct Marketing, published in 1983 by McGraw-Hill, was the first academic textbook on direct marketing A Japanese edition of this text was published by Nikkei in Tokyo in 1985, and an international student edition was published in Singapore in 1986 Martin’s How to Find and Cultivate Customers through Direct Marketing was published by NTC Business Books in 1996 Contemporary Database Marketing: Concepts and Applications, an interactive college textbook and CD, coauthored with Kurtis Ruf and Goutam Chakraborty, was published by Racom Books in 2001 Martin coauthored with Lisa Spiller the first edition of Contemporary Direct Marketing, released in 2004, and the second as perishable commodity, 94–95 research, 103–105, 105–106 spotlight: NextMark, 91–93, 91–92 types of, 95–98, 96–98 See also market segmentation lists as market segments See NextMark Living Social, 432–433 location-based mobile (LBM), 363–364 location-based search, 358–359 long-form sales letters, 412–413 Lou Harris Organization, 552 loyalty programs, 49–52, 49–51 Luray Caverns, 258, 259 M&M’s, 108 Macy’s, 99 Maersk, 468 magazines, 300–305, 300, 302, 304 mail-order catalogs, 11–12 mailing envelopes, 287–288 management contracting, 593 MapInfo, 117 March of Dimes, 23–24 market entry, 591–593 market penetration, 158–160, 159, 160 market research, 207–209, 586–589 market research directors, 689–690 market segmentation B2B marketing and, 462–465, 463–464 bases for, 108–119, 110–111, 114–115, 117–118 case study: Virginia Beach, 125–134, 126, 128–133 direct mail and, 296–297, 297 global market segmentation, 585–591, 590 magazines and, 302, 302 message objectives and, 239 nature of, 107–108 newspapers and, 305 offers and, 215 radio and, 333–334 television and, 328–330, 329 1403 ZIP code areas and, 119–123, 119–120, 122 See also lists market structure, 455 market.com, 469 marketing analytics application of, 175–176 budget and, 164–175, 166, 168, 170–171, 171 case study: Hi-Ho Silver, 178–190, 179–180, 183–185, 186, 187, 188, 189 measurement and, 160–164, 162–164 ‘right’ target market and, 154–160, 156, 158–159, 160 spotlight: National Geographic Society, 137–140, 137– 139 See also testing (experimentation) marketing communications, 455 Marketing EDGE, 712–713 marketing funnel, 465–466, 465 marketing managers, 690, 698 marketing plans, 589–590 marketing research, 64 Marketo, 466, 470 Marriott, 64 The Martin Agency, 679–685, 680–686 Martin, David, 679 match codes, 53–54, 54–56 matchback, 147 Match.com, 403, 404 Mayer, Edward N., Jr., 247 McKim, Robert, 517–518 measurable response, 18 media international marketing and, 596–599, 597–598 types of, 17–18 See also digital and social media; print media media efficiency ratio (MER), 333 media planners and analysts, 691, 704 memes, 242 Mercedes-Benz, 108 merge-purge process, 55–56, 56–57 Michels, Oren, 365 1404 micro-targeting, 25, 77–78 Middle East, 610 Mike’s Bike Tours, 224–230, 225–229, 596, 598 Mills, Charles B., 240 mobile applications, 365–368, 365–367 mobile coupons, 360–361 mobile marketing case study: Uber, 378–383, 378, 380–381 emerging tools, trends and activities in, 17, 357–368, 360, 362, 365–367 spotlight: Chirp XM, 355–356, 355–356 mobile payment systems, 358 mobile websites, 359–360, 360 moral appeal, 245 morals, 538 Mothers Against Drunk Driving (MADD), 24 motivations, 207–208 Mountain Gear, 194–197, 195–196 Mud Pie, 438–442, 439, 441 multi-media campaigns, 326, 327 multibuyers, 57 multichannel distribution, 19–20 multichannel marketing, 290–291 Multimedia Messaging Service (MMS), 371–372 Murad International Skin Care, 608 MWEB, 611, 612 MyBestSegments.com, 118, 119–120 narrowcasting (political micro-targeting), 25 Nash, Edward L., 14 National Association of Letter Carriers, 215 National Cash Register Company (now NCR), 452 National Geographic (magazine), 334 National Geographic Kids (magazine), 304 National Geographic Society (NGS), 137–140, 137–139, 399, 400, 419, 420 natural languaging processing (NLP), 585 Nature Conservancy, 24 near-field communication (NFC) technology, 17, 358, 363 negative option, 210–211 1405 Nestlé, 599 net profit, 168–170, 172–173 Netflix, 219 NetPostmaster.com, 455 Nevada Commission on Tourism (NCOT), 82–87, 83–84, 86 Newport News, 55 Newport News/Williamsburg International Airport, 300 newspapers, 305–310, 306–310 NextMark B2B marketing and, 455 list research and analysis and, 103–105, 105–106 overview of, 91–93, 91–92 types of lists and, 96, 96, 97, 99, 101 NFC (near-field communication) mobile marketing, 17, 363 Nielsen, 326 Nike, 108, 252, 514 nixie, 58 nonprofit organizations, 23–24, 23 Norfolk Admirals, 30 Norman, John, 680 North American Industry Classification System (NAICS), 463– 464, 463–464 Novartis, 472 null hypothesis, 149–150 Obama presidential campaign (2008), 25 offer box, 413 offer tests, 142 offers case study: Mike’s Bike Tours, 224–230, 225–229 components of, 200–207, 202, 202, 205–206, 208 concept of, 197–199, 197–198 creation of, 207–218, 210–214, 216, 360 fulfillment and, 491, 492, 492 popular types of, 218–220, 220–221 spotlight: Mountain Gear, 194–197, 195–196 Office Depot, 291 Office Max, 291 Office of Prescription Drug Promotion (OPDP), 562 offline tactics, 413–415, 414–415 1406 Oliver, Richard W., omni-channel marketing, 20–21 one-on-one personalized marketing, 77–78 online analytical processing (OLAP), 67–68 online direct-response conversion pages, 411–413 online fulfillment, 505 online legal issues, 566–567 online market research, 402 online panels, 402–403 online PR (E-PR), 416, 420, 421 online surveys, 402 online video, 261–262 Oozlefinch (case study) brewery operations, 658–660, 659–660 business customers, 666–667 company history, 656–658, 657–658 competitive situation, 667–668 craft beer customers and, 662–666, 663–666 craft beer industry and, 660–662 future opportunities, 673–676, 675 marketing activities, 670–673, 670–673 overview of, 655–656, 655–656 SWOT analysis, 668–669 Oracle, 71 Oriental Trading Company, 12, 13 Orvis, 592 Otto Versand, 593 outbound calls, 373, 374 outbound e-mail, 264–267, 266 outside call centers, 513 outside fulfillment centers, 504 outsourcing, 513 Overstock, 403 Oyster Pointer (newspaper), 305, 306 P-P-P-P (Picture, Promise, Prove, Push), 247 package inserts, 299 packing slip, 496 Pandora B2B marketing and, 467–468, 468 1407 creative message strategies and, 260–261, 261 market segmentation and, 113, 114 overview of, 323–325, 323–325, 335 Papa John’s, 636–637 paper, 252, 253 Paper Direct, 595–596 partner relationship management (PRM), 78, 79 pathing, 434 Patterson, John H., 452 pay-per-click advertising, 405, 440–441 payment options, 595 payment terms, 202, 202 PayPal, 358, 595 Peace Frogs, 5–7, 5–7 Pedersen, Mary, 343 peer groups (reference groups), 112 Peninsula SPCA, 266, 267 Pepsi, 241–242, 242 PepsiCo, 396 periodicals, 508 Periscope, 336 permission marketing, 565 personal computers, 12 personalization, 498–502, 499–502 personalized URLs (PURLs), 427–432, 428–432 Peruvian Connection, 590, 590 Pharmaceutical Research and Manufacturers of America (PhRMA), 563 photographs, 251–252, 251 picking list, 496 Pinterest, 425–427, 425–426 Pizza Hut, 636 platform business models, 220, 220–221 PNC Bank, 511–512 political micro-targeting (narrowcasting), 25 political organizations, 24–25 political stability, 587 population, 587 positioning, 215 positive option, 210 1408 postal systems, 589, 595, 605–606 See also U.S Postal Service (USPS) postscripts, 288 PR (page rank) value, 406 predictive analytics, 72–73, 157 premiums, 207 preprinted inserts, 305, 307–308, 308 prerecorded messages, 361 price elasticity, 201 price penetration, 201 price skimming, 201 pricing, 201–202, 202, 202 print media case study: Busch Gardens, 312–319, 314–318 creative message strategies and, 254–257, 254–256 magazines, 300–305, 300, 302, 304 newspapers, 305–310, 306–310 overview of, 17–18 spotlight: Baesman Group, 277–281, 277, 279–280 See also direct mail printing technology, 12, 13 privacy concept of, 546 database security and, 59 emerging concerns, 567 right to privacy, 544 See also privacy legislation Privacy Act (1974), 547–548 privacy fundamentalists, 552 privacy legislation, 546–557, 549, 554–555, 561, 594 privacy pragmatists, 552–553 Privacy Protection Study Commission, 547–548 Privacy Shield Framework, 561 privacy unconcerned, 552 proactive chat, 434 proactive telephone marketing, 374 processing, 493 Procter & Gamble Co., 608 procurement, 454 product, 200–201 1409 product differentiation, 108 product positioning, 108 production, 260, 704–705 promoted tweets, 421 prospects, 74–75, 75 psychographic segmentation, 112–113 QR codes, 361–362, 362 Quad, 68, 141, 144, 153–154, 153, 506 quality score, 408 Quantcast, 435 QVC (Quality/Value/Convenience), 331 R L Polk, 69–70 radio advantages and disadvantages, 334–335 creative message strategies and, 260–261, 261 Internet competitors and, 334–335 market segmentation and, 333–334 overview of, 326, 327, 333 rate structure of, 334 spotlight: Pandora, 323–325, 323–325 radio frequency identification (RFID), 505 Rails-to-Trails Conservancy, 24 random assignment, 144 Rappaport, Donn, 565 rational appeal, 215, 245 reach, 330–331 reactive telephone marketing, 373–374 Reba Art and Photography, 78 recency/frequency/monetary (R/F/M) assessment, 52–53 Red Flags rule, 561 redemption, 361 reference groups (peer groups), 112 referrals, 65–66, 65, 470 regulatory authorities, 557–565, 559–560, 564 REI (Recreational Equipment Inc.), 263, 592 Reichheld, Frederick, 48 Reider, Suzie, 343 response, 492–493 1410 response devices, 289, 301 response lists, 95, 96 Restrepo (documentary), 399, 400, 419, 420 retailing, 14 retargeting, 114–115 return on investment (ROI), 172–173 Rhodes, Dave, 549 right to confidentiality, 544 right to information, 544 right to privacy, 544 right to safety, 543–544 right to selection, 544 Ring, 219, 257 risk-reduction mechanisms, 202–204 Rolex, 108 Romano, Mario, 457–458 Ruf Strategic Solutions, 70 run-of-paper (ROP) advertisements (space ads), 305–306, 306–307 Rust, Roland T., Safe Harbor program, 561 safety, 543–544 sale offers, 218 SalesGenie, 455 salting (seeding), 60 sample offers, 218 Samsung Pay, 363 SAP, 71 SAS, 73 Schwab, Vic, 240 scripts, 258–259 Seagrams, 601 Seamless, 507 search engine marketing (SEM), 405 search engine optimization (SEO), 404–408, 454 search engine optimization managers, 698–699 SeaWorld Parks and Entertainment, 553, 554 security, 545–546 security breach, 546 1411 seeding (salting), 60 segmentation See market segmentation segmentation analysis, 77–78 selection, 544 self-mailers, 285, 286–287 self-regulation, 565, 566 senior digital account managers, 711–712 senior digital graphic designers, 710 senior digital marketing managers, 706 service, 200–201 service bureaus, 103 shipping, 493 ShipShapes, 249–250, 285, 286–287 Shoes, Inc., 284, 284–285 Sirius XM, 335–336 Sisense, 73 Smirnoff, 599 Smithfield Foods, 62, 63 SMS text messaging, 368–371, 369–371, 599 Snapchat, 365–367, 366–368 Snow Companies, 570–574, 572–573 social factor segmentation, 112 social media See digital and social media; social networks social media marketing coordinators, 700 social media specialists, 699–700 social networks Facebook, 263, 418–421, 418–420, 715, 716 Instagram, 263, 423–425, 423–425 overview of, 416 Pinterest, 425–427, 425–426 Twitter, 421–422, 421–422, 716, 717 solo mailers, 285 sound overlay, 262 source code, 52, 164 source data, 52 South Korea, 609 Southwest Airlines, 49–51, 49–50, 415 space ads (run-of-paper advertisements), 305–306, 306–307 spam, 399, 548–549 special mail services, 508 1412 split testing (A/B testing), 141–142, 148–149 sports organizations, 28–31, 30–31 Spotify, 219, 335, 514 SpyFu, 435 squeeze pages (landing pages), 411, 412 Standard Industrial Classification (SIC) coding system, 463, 463–464 standard mail, 508 Stanley Steemer, 280, 280 Staples, 291 STAR-CHAIN-HOOK, 247–248 Starbucks, 363, 365, 514 statement stuffers, 298–299 stealth marketing, 60, 77–78 Stein, Donna Baier, 213 Stewart, Potter, 540–541 STIHL, Inc., 328–330, 329 Stone, Bob, 247 storyboards, 258, 259, 261 strategic planners, 703 structured data, 52 studio artists, 703 subscription models, 219–220 Sullivans, 468–469, 469 Sunday supplements, 305, 308 Super Bowl, 328 supplier direct fulfillment, 506 Survey Monkey, 402 suspects, 74, 75 sweepstakes, 205–207, 219 Swisslog, 487–488, 497, 497–501, 499–500 syndicated Sunday supplements, 305, 308 T-Mobile, 59 T1 service, 374 Taco Bell, 108 Taiwan, 609–610 take-one racks, 299–300 talent payment coordinators, 705 Target, 506–507 1413 tariffs, 588 taxes, 588, 602–603 Telecom Argentina, 596 telemarketing See telephone marketing telemarketing directors, 694–695 telemarketing managers, 695–696 Telephone Consumer Protection Act (TCPA, 1992), 557–558 telephone marketing, 372–375, 470, 557–558, 596, 599 telephone scripts, 374–375 television advantages and disadvantages of, 333 case study: GEICO, 345–351, 347–349 characteristics of time on, 330–331 creative message strategies and, 257–260 direct marketing uses of, 331–333, 332 international marketing and, 599 market segmentation and, 328–330, 329 overview of, 326–328, 327 television home shopping, 331 Teradata, 68 testing (experimentation) hypothesis testing, 149–150 overview of, 141–142 process of, 151–154, 153 processes of, 216–217 responses and test results, 146–149, 147–148 statistical evaluation of differences, 150–151, 151 test design, 144–146, 145 types of tests, 142–144, 143 Texas Instruments, 592 text messaging, 368–372, 369–371 til-forbid (TF), 211, 212 time-limit offers, 218–219 time limits (length of commitment), 204, 205–206 touchless payment systems, 358 trade margin (unit margin), 167 trading partners, 589 transactional data, 52 transitions, 262 translation, 585 1414 trending, 421 Truth in Advertising, 565 Tumblr, 416 Twitter, 421–422, 421–422, 469, 716, 717 Type I error, 150 Type II error, 150 typefaces, 252 Uber fulfillment and, 507 international marketing and, 593 loyalty programs and, 51, 51 mobile marketing and, 378–383, 378, 380–381 offers and, 220 unique coupon codes, 360–361 unit margin (trade margin), 167 Universal Bank, 553–554 unstructured data, 52 up-selling, 209, 212, 473 U.S Navy, 25–27, 28, 400, 401 U.S Postal Service (USPS) direct mail and, 282 international marketing and, 595 regulations and, 564 volume and scope of operations of, 28, 58, 507–508 ZIP codes and, 119–120, 121–122, 122 validation, 361 Valpak, 288, 288, 298, 299 variable costs, 167, 168 variable data printing (VDP), 284–285 Veblen, Thorstein, 238 Venmo, 358, 595 Victoria’s Secret, 19–20, 99, 108, 252 video sales letters, 413 violation, 551 VIPER SmartStart, 370, 370–371 viral marketing, 399 viralocity, 399 Virginia Aquarium & Marine Science Center, 78 1415 Virginia Beach, Virginia creative message strategies and, 243–244, 244, 264, 265 digital and social media and, 393, 394, 414, 416, 417 digital video and, 336, 337, 339, 340 international marketing and, 596, 597, 602, 602 market segmentation and, 125–134, 126, 128–133 measurable response and, 18, 18 mobile marketing and, 360, 360 Virginia Living Museum, 326, 327 virtual enterprise, 504 Wachs, David, 360 Wall Street Journal (newspaper), 98, 98 Walmart, 506–507, 592–593, 611 Warren, Samuel, 546 Washington Post (newspaper), 78, 79 Washington Redskins, 30–31, 31 Water Country, 341, 342 wealth, 588 webinars, 411, 471–472 website managers, 698 WeChat, 358 WeReward, 363–364 Westergren, Tim, 335 Westin, Alan, 552 Wheeler, Elmer, 240 Wheeler-Lea Amendment, 558–559 Whereoware, 438–439, 453, 466, 468–469 White & Partners, 258, 259 widely fluctuating demand, 457 Williamsburg Area Destination Marketing Campaign, 28 Williamsburg Tourism, 28, 29, 235–237, 235–237, 307 Williamsburg Winery, 78, 79, 211, 212 Windstream Communications, 209, 210 Woltz, George, 679 World Wildlife Fund, 24 XERA, 333 XM Radio, 78, 79 1416 Yahoo, 358–359 Yelp, 363–364 Yohn, Denise Lee, 289–290 YouTube, 263, 336, 337, 338–340, 338, 340–342 Zappos, 403, 492, 492, 493, 494, 514–516, 516 Ziff-Davis Media, 545 Zillow, 215–216 ZIP code areas, 119–123, 119–120, 122 ZIP Code Business Patterns, 123 1417 ...1 Direct Digital & Data- Driven Marketing Direct Digital & Data- Driven Marketing 5th Edition Lisa Spiller Los Angeles London New Delhi Singapore Washington... in marketing, and especially in direct, digital, and data- driven marketing, which was first sparked when I met Martin Baier Lisa Spiller 45 46 About the Author Lisa D Spiller, PhD Dr Lisa Spiller. .. of modern marketing 32 33 Using This Book This fifth edition of Direct, Digital & Data- Driven Marketing contains the following four major sections: Build, Develop, and Measure Direct Marketing