Reflections on DMA08: Two Viewpoints
Major industry events, such as last week’s DMA08 Annual Conference in Las Vegas, can’t help but give you a feel for the climate and direction this business is headed, particularly when you get the view from all around. So Catalog Success: Tactics & Tips columnist and catalog consultant Jim Coogan and Catalog Success Editor-in-Chief Paul Miller did just that, taking the temperature from every quarter during various stages of its five-day run. Here’s what they heard and how they saw it relating to you, the catalog/multichannel merchant.
Coogan’s Take
There were some bearish assessments voiced regarding the direction of the catalog industry at the Direct Marketing Association’s (DMA) annual conference last week in Las Vegas.
When it comes to prospecting circulation, “Down 20 percent is the new flat,” quipped one savvy list broker. The combination of increasing paper and postage costs and the slowing economy have cut prospecting circulation, according to the co-op databases and list brokers providing vertical lists.
Monday saw the stock market have its largest one-day rally ever, so that news brightened the mood considerably on Monday and Tuesday. But marketers expressed a realistic appraisal that the holiday season would probably see a downturn in sales as a delayed reaction to the financial crisis. The worst is likely still to come for the retail economy, even if the worst may be over for the stock market.
On a positive economic note, news spread of possible relief from the recent cycle of paper price increases. There was some cautious optimism that paper prices for the No. 4 and No. 5 catalog papers would remain stable and not increase in the near future.
Behavioral Targeting: The Next Wave?
Joel Davidson, president and CEO of the co-op database NextAction, hosted a round-table discussion, “Online Behavioral Advertising — Going Beyond Context and Search to Better Conversions.” The discussion focused on the big potential for using behavioral data on the Web. One conclusion was that, just like with e-mails, the messages must be relevant. Direct marketers need to learn how to use the available inventory of Web traffic.
The catalog industry was represented at the round table by Renee Jacobs, president of Title Nine Sports, a marketer of athletic apparel for women, who cited the inability to easily measure profitability as a barrier to entry for most direct marketers. She believes budgets for using behavioral Web data will remain tiny until behavioral data can be proven profitable.
The debate swung between the shotgun approach of using behavioral data to build a brand vs. the rifle shot approach of direct marketers who’ll only scale up programs that are measurable and profitable. If behavioral data is going to become an alternative to paid search, it needs to have the measurable metrics of paid search so direct marketers can scale up and control profitability on a granular level.
Catalog Choice and Circulation
Marketers expressed a wide range of opinions on the impact of Catalog Choice, the catalog mail suppression service. Is it a threat to future circulation, or is it filling the need for consumers who want to opt out of receiving unwanted catalogs? Some catalogers said they need any and every way possible to purge unprofitable circulation. Whether it’s the new and improved DMAChoice suppression file, Catalog Choice or Cognitive Data’s proprietary change of address list hygiene, catalogers understand the business realities (in fact, the opportunity) of not mailing to households that won’t respond profitably.
As for the assorted booths I visited, the online marketing software provider Alterian continues to upgrade its suite of campaign management solutions. It sells tool sets as the way to manage circulation and the merge/purge process. Its approach is simple and elegant, and shows it really understands the circulation management job. I found myself taking in several seminars the company gave on the exhibit hall floor and walking away with fresh ideas on improving the process of circulation management.
One final positive note was the quiet confidence of printer Quebecor. The company gave every indication of being ready to emerge from Chapter 11 in the near future.
Miller’s Take
I only spent a couple of days at last week’s DMA08 Conference in Las Vegas — and with good reason. This event has long since become a nonevent for multichannel merchants whose primary marketing tool is the catalog. That’s not to say it’s no longer a worthwhile conference on the overall DM circuit.
But most catalogers remained home trying to figure out how they’re going to survive what’s expected to be a horrific holiday season. Upon returning home on Oct. 15, I spoke with one catalog co-owner who wasn’t only trying to figure out what he was going to do about his personal wealth fading away on Wall Street, but also how his company was going to make it into 2009.
Before I go any further, I must add to Jim’s discussion of DMAChoice, Catalog Choice and the whole opt-out issue. Among the booths I visited, I got a good idea what one exhibitor, ProQuo, was all about. I invite you to check out this company’s Web site (www.proquo.com). I visited the booth, and there it was all over, the company’s tagline: “Stop wasteful paper junk mail. Get the offers you really want.” The company was touting a fairly similar service to that of Catalog Choice, but I’d just love to find out who sold ProQuo that booth. It’s akin to Barack Obama agreeing to insert a five-minute John McCain plug in Obama’s 30-minute commercial airing next week on one of the networks. Ohhhhh ... times are indeed tough.
Anyway, at the conference I met with several exhibitors who were reasonably pleased with booth traffic (though not from catalogers, of course), but, well, you know. Everyone these days is walking around like a deer in headlights: What can you do about the tumbling market and the looming recession? Several wondered how many smaller and midsized multichannel merchants would survive beyond first quarter 2009.
Well, first, there will be a Christmas and Hanukkah this year. The sessions I attended last week emphasized the newer and more effective ways to get your message in front of consumers, while not bemoaning too much about the economy. But my sense is that while consumers will still buy gifts, they’re going to opt for the most practical things that offer the best value.
Four Takeaways for (a Little?) Holiday Cheer
Not to get too political here, but I do believe that a changing of the guard in the White House may inspire some consumers to spend a little more, regardless of who wins — witness the turnaround that followed the 1992 election amid the last economic malaise. But here are some of the best things catalogers can do:
1. Emphasize the practicality of your products, and keep your prices in check.
2. Hold a special meeting with your customer service reps to remind them to be friendlier than ever this season. Not too many people out there are in a particularly good mood these days. Pick them up with a little holiday cheer, while guiding them to smart product selections. Be cautious of getting too aggressive with upsells.
3. Emphasize to your order-takers, and for them to make a point to customers, that your company is healthy and here for the long haul. That said, don’t try to mask the fact that business is down. Even the most out-of-touch Americans are well aware that very few businesses are prospering these days. By acknowledging this while ensuring customers that your company is still quite healthy, you’ll humanize the shopping experience better.
4. Don’t go overboard with free shipping offers and cut-rate discounts too early. There’s no turning back once you start either of them.
Jim Coogan is president of Catalog Marketing Economics, a Santa Fe, N.M.-based consulting firm focused on catalog circulation planning. You can reach him at (505) 986-9902 or jcoogan@earthlink.net. Paul Miller is editor-in-chief of Catalog Success and the Catalog Success: Tactics & Tips e-newsletter. You can reach him at (914) 669-8391 or pmiller@napco.com.
