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Marketing: An Introduction

Thirteenth Edition

Chapter 14

Direct, Online, Social Media, and Mobile Marketing

Learning Objectives (1 of 4)

14-1. Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies.

14-2. Identify and discuss the major forms of direct and digital marketing.

14-3. Explain how companies have responded to the Internet and the digital age with various online marketing strategies.

This chapter defines direct and digital marketing and discusses their rapid growth and benefits to customers and companies. It identifies and discusses the major forms of direct and digital marketing, and also explains how companies have responded to the Internet and the digital age with various online marketing strategies.

Learning Objectives (2 of 4)

14-4. Discuss how companies use social media and mobile marketing to engage consumers and create brand community.

14-5. Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing.

This chapter discusses how companies use social media and mobile marketing to engage consumers and create brand community. Finally, the chapter identifies and discusses the traditional direct marketing forms and overviews the public policy and ethical issues presented by direct marketing.

First Stop: Amazon The Poster Child for Direct and Digital Marketing

Amazon engages customers and creates highly satisfying customer online buying experiences.

Amazon does much more than just sell goods online. It engages customers and creates direct, personalized, and highly satisfying customer online buying experiences.

Amazon’s deep-down passion for creating superb online customer experiences has made it one of the most powerful names on the Internet. Amazon is the model for successful direct and digital marketing.

Learning Objective 14-1

Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies.

Direct and Digital Marketing

Engage directly with targeted individual consumers and customer communities to obtain an immediate response

Build lasting customer relationships, engagement, brand community, and sales

New Direct Marketing Model (1 of 2)

Priceline.com sells its services exclusively through online, mobile, and social media channels.

Online travel agency Priceline.com sells its services exclusively through online, mobile, and social media channels. Along with other online competitors, Priceline.com has pretty much driven traditional offline travel agencies to extinction.

New Direct Marketing Model (2 of 2)

Most companies still use direct marketing as a supplementary channel or medium.

For many companies today, direct and digital marketing constitute a complete model for doing business.

Most companies still use direct marketing as a supplementary channel or medium. For example, Sears or Macy’s, sell the majority of their merchandise off their store shelves, but they also sell through direct mail, online catalogs, and social media pages.

For many companies today, direct and digital marketing are more than just supplementary channels or advertising media. They constitute a complete model for doing business. Firms employing this direct model use it as the only approach. For example, companies such as Priceline have built their entire approach to the marketplace around direct and digital marketing.

Rapid Growth of Direct and Digital Marketing

Fastest-growing form of marketing

Direct marketing becoming more Internet-based

Direct marketing caims a surging share of marketing spending and sales

Includes online display and search advertising, video, social media, mobile, email

Direct and digital marketing have become the fastest-growing form of marketing. Direct marketing continues to become more Internet-based, and digital direct marketing is claiming a surging share of marketing spending and sales. Total digital marketing spending—including online display and search advertising, video, social media, mobile, and email—now accounts for the second-largest share of media spending, behind only television, which it’s expected to overtake by 2018.

Benefits of Direct and Digital Marketing to Buyers

Buyers

Convenient, easy, and private

Easy buyer-seller interaction

Quick access to products and relevant information

Brand engagement and community

Sellers

Low-cost, efficient, and speedy

Build close, personalized, interactive, one-to-one customer relationships

Greater flexibility

For buyers, direct and digital marketing are convenient, easy, and private. They give buyers anywhere, anytime access to an almost unlimited assortment of goods and a wealth of products and buying information. Through direct marketing, buyers can interact with sellers by phone or on the seller’s Web site or app to create exactly the configuration of information, products, or services they want and then order them on the spot. Finally, for consumers who want it, digital marketing through online, mobile, and social media provides a sense of brand engagement and community.

For sellers, direct marketing often provides a low-cost, efficient, speedy alternative for reaching their markets. Because of the one-to-one nature of direct marketing, companies can interact with customers by phone or online, learn more about their needs, and personalize products and services to specific customer tastes. Direct and digital marketing also offer sellers greater flexibility. They let marketers make ongoing adjustments to prices and programs, or make immediate, timely, and personal announcements and offers.

Learning Objective 14-1 Summary

Direct and digital marketing - engaging directly with individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships

For buyers, direct and digital marketing are convenient, easy, and private.

For sellers, direct marketing often provides a low-cost, efficient, speedy alternative for reaching their markets.

Direct and digital marketing involve engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships. Companies use direct marketing to tailor their offers and content to the needs and interests of narrowly defined segments or individual buyers to build direct customer engagement, brand community, and sales. Spurred by the surge in Internet usage and by rapid advances in digital technologies – from smartphones, tablets, and other digital devices to the spate of online social and mobile media – direct marketing has undergone a dramatic transformation.

For buyers, direct and digital marketing are convenient, easy to use, and private. They give buyers anywhere, anytime access to an almost unlimited assortment of products and buying information. Direct marketing is also immediate and interactive, allowing buyers to create exactly the configuration of information, products, or services they desire and then order them on the spot. Finally, for consumers who want it, digital marketing through online, mobile, and social media provides a sense of brand engagement and community – a place to share brand information and experiences with other brand fans. For sellers, direct and digital marketing are powerful tools for building customer engagement and close, personalized, interactive customer relationships. They also offer greater flexibility, letting marketers make ongoing adjustments to prices and programs or make immediate, timely, and personal announcements and offers.

Learning Objective 14-2

Identify and discuss the major forms of direct and digital marketing.

Figure 14.1 - Forms of Direct and Digital Marketing

This figure shows the major forms of direct and digital marketing.

Traditional direct marketing tools include face-to-face selling, direct-mail marketing, catalog marketing, telemarketing, direct-response television marketing, and kiosk marketing.

A dazzling new set of direct digital marketing tools has burst onto the marketing scene, including online marketing (Web sites, online ads and promotions, email, online videos, and blogs), social media marketing, and mobile marketing.

Learning Objective 14-2 Summary

The main forms of direct and digital marketing

Traditional direct marketing tools

New digital marketing tools

The main forms of direct and digital marketing include traditional direct marketing tools and the new digital marketing tools. Traditional tools are still heavily used and very important in most firms’ direct marketing efforts. In recent years, however, a dazzling new set of direct digital marketing tools has burst onto the marketing scene.

The chapter first discusses the fast-growing new digital direct marketing tools and then examines the traditional tools.

Learning Objective 14-3

Explain how companies have responded to the Internet and the digital age with various online marketing strategies.

Marketing, the Internet, and the Digital Age

Digital and social media marketing: Using digital marketing tools to engage consumers anywhere, anytime via their digital devices

Digital age: Changing customers’ notions of convenience, speed, price, product information, service, and brand interactions

Omni-channel retailing: Creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping

Digital and social media marketing is the fastest-growing form of direct marketing. It uses digital marketing tools such as Web sites, online video, email, blogs, social media, mobile ads and apps, and other digital platforms to directly engage consumers anywhere, anytime via their digital devices.

The digital age has fundamentally changed customers’ notions of convenience, speed, price, product information, service, and brand interactions. As a result, it has given marketers a whole new way to create customer value, engage customers, and build customer relationships. Some companies operate only online. They include a wide array of firms, from e-tailers to search engines and portals, transaction sites, content sites, and online social media.

Omni-channel retailing involves creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping. In fact, omni-channel retailing companies are having as much online success as their online-only competitors.

Direct digital and social media marketing takes any of the several forms that include online marketing, social media marketing, and mobile marketing. We discuss each in turn, starting with online marketing.

Online Marketing

Marketing via the Internet using company Web sites, online ads and promotions, email, online video, and blogs

Marketing Web sites: Engage consumers to move them closer to a direct purchase or other marketing outcome

Branded community Web sites: Present brand content that engages consumers and creates customer-brand community

Online marketing refers to marketing via the Internet using company Web sites, online ads and promotions, email marketing, online video, and blogs.

For most companies, the first step in conducting online marketing is to create a Web site. Marketing Web sites are designed to interact with customers to move them closer to a direct purchase or other marketing outcome. In contrast, a branded community Web site does not try to sell anything but presents brand content that engages consumers and creates customer-brand community.

A Web site should be easy to use and visually appealing. Ultimately, Web sites must be useful. When it comes to Web browsing and shopping, most people prefer substance over style and function over flash.

Online Advertising and Email Marketing

Online advertising: Appears while consumers are browsing online

Email marketing: Sending highly targeted, highly personalized, relationship-building marketing messages via email

Spam: Unsolicited, unwanted commercial email messages

Online advertising refers to advertising that appears while consumers are browsing online, including display ads, search-related ads, online classifieds, and other forms. The main forms of online advertising are display ads and search-related ads. Online display ads might appear anywhere on an Internet user’s screen and are often related to the information being viewed.

Today’s rich media ads incorporate animation, video, sound, and interactivity. The largest form of online advertising is search-related ads or contextual advertising. In this form of advertising, text-based ads and links appear alongside search engine results on sites such as Google, Yahoo!, and Bing.

Email marketing refers to sending highly targeted, highly personalized, relationship-building marketing messages via email. When used properly, email can be the ultimate direct marketing medium. But there is a dark side to the growing use of email marketing – the explosion of spam – unsolicited, unwanted commercial email messages that clog up our email boxes. Spam has produced consumer irritation and frustration. To address these concerns, most legitimate marketers now practice permission-based email marketing, sending email pitches only to customers who opt in.

Online Videos

Posting digital video content on brand Web sites or social media

Viral marketing: Videos, ads, and other marketing content that customers seek out or pass along to friends

Another form of online marketing involves posting digital video content on brand Web sites or social media sites such as YouTube, Facebook, and others. Some videos are made for the Web and social media. Other videos are ads that a company makes primarily for TV and other media but posts online before or after an advertising campaign to extend reach and impact.

Viral marketing is the digital version of word-of-mouth marketing. All kinds of videos can go viral, producing engagement and positive exposure for a brand. Marketers have little control over where their viral messages end up. They can seed content online, but that does little good unless the message itself strikes a chord with consumers. For example, in one simple but honest McDonald’s video, the company answered an online viewer’s question about why McDonald’s products look better in ads than in real life by conducting a behind-the-scenes tour of how a McDonald’s ad is made. The award-winning three-and-a-half-minute video pulled almost 15 million views and 15,000 shares, earning the company praise for its honesty and transparency.

Blogs and Other Online Forums (1 of 2)

Online journals of narrowly defined topics where people and companies post their thoughts and other content

Benefits: A fresh, original, personal, and inexpensive way to enter into consumer online conversations

Limitations: Cluttered, difficult to control and largely a consumer-controlled medium

Blogs, or Web logs, are online journals where people and companies post their thoughts and other content related to narrowly defined topics. Blogs can be about anything—politics, baseball, haiku, car repair, or the latest television series.

Most marketers are now tapping into the blogosphere as a medium for reaching their customer communities. Marketers can use insights from consumer online conversations to improve their marketing programs.

As a marketing tool, blogs offer some advantages. They can offer a fresh, original, personal, and economical way to enter into consumer online conversations.

However, blogs offer disadvantages too. The blogosphere is cluttered and difficult to control. Although companies can sometimes leverage blogs to engage customers in meaningful relationships, blogs remain largely a consumer-controlled medium.

Blogs and Other Online Forums (2 of 2)

The Nuts About Southwest blog gives customers a look inside the company’s culture and operations.

The creative Nuts About Southwest blog, written by Southwest employees, fosters a two-way dialogue that gives customers a look inside the company’s culture and operations.

Learning Objective 14-3 Summary

New way to create customer value, engage customers, and build customer relationships

Online marketing takes several forms

Web sites, online advertising and promotions, email marketing, online video, and blogs

The Internet and digital age have fundamentally changed customers’ notions of convenience, speed, price, product information, service, and brand interactions. As a result, they have given marketers a whole new way to create customer value, engage customers, and build customer relationships. The Internet now influences a staggering 50 percent of total sales – including sales transacted online plus those made in stores but encouraged by online research. To reach this burgeoning market, most companies now market online.

For most companies, the first step in conducting online marketing is to create a Web site. The key to a successful Web site is to create enough value and engagement to get consumers to come to the site, stick around, and come back again.

Online advertising has become a major promotional medium. The main forms of online advertising are display ads and search-related ads. Email marketing is also an important form of digital marketing. Used properly, email lets marketers send highly targeted, tightly personalized, relationship-building messages. Other important forms of online marketing are posting digital video content on brand Web sites or social media and blogs.

Learning Objective 14-4

Discuss how companies use social media and mobile marketing to engage consumers and create brand community.

Social Media Marketing (1 of 2)

Social media: Independent and commercial online communities where people congregate, to socialize and share messages, opinions, pictures, videos, and other content

Marketers engage social media in two ways:

Using the existing ones

Setting up their own

Social media are independent and commercial online communities where people congregate to socialize and share messages, opinions, pictures, videos, and other content. Marketers can engage in social media in two ways: They can use existing social media or they can set up their own. Using existing social media seems the easiest. Thus, most brands, large and small, have set up shop on a host of social media sites. Such social media can create substantial brand communities. Niche social media cater to the needs of smaller communities of like-minded people, making them ideal vehicles for marketers who want to target special interest groups.

Beyond these independent social media, many companies have created their own online brand communities. For example, in Nike’s Nike+ running community, members join together online to upload, track, and compare their performances.

Social Media Marketing Advantages and Challenges

Advantages

Targeted and personal

Interactive

Immediate and timely

Cost effective

Engagement and social sharing capabilities

Challenges

Effective usage uncertain

Difficult to measure results

Largely user controlled

Using social media presents both advantages and challenges.

On the plus side, social media are targeted and personal, so they allow marketers to create and share tailored brand content with individual consumers and customer communities. Social media are interactive, making them ideal for starting and participating in customer conversations and listening to customer feedback. Social media are also immediate and timely. They can be used to reach customers anytime, anywhere with timely and relevant content regarding brand happenings and activities. Social media can be very cost effective. Although creating and administering social media content can be costly, many social media are free or inexpensive to use. The biggest advantages of social media are the engagement and social sharing capabilities. Social media are especially well suited to creating customer engagement and community.

Social media marketing also presents challenges. Most companies are still experimenting with how to use them effectively, and results are hard to measure. Social networks are largely user controlled. Marketers cannot simply muscle their way into consumers’ digital interactions – they need to earn the right to be there. Rather than intruding, marketers must learn to become a valued part of the online experience by developing a steady flow of engaging content.

Social Media Marketing (2 of 2)

Etsy has created an active and engaged worldwide brand community of buyers and sellers.

Through its extensive online and social media presence, Etsy has created an active and engaged worldwide brand community of buyers and sellers in what it calls “The marketplace we make together.”

Integrated Social Media Marketing

Large companies design social media efforts that blend with and support other elements of a brand’s marketing strategy and tactics.

Firms that use social media effectively create brand-related social sharing, engagement, and customer community.

Most large companies are now designing full-scale social media efforts that blend with and support other elements of a brand’s marketing strategy and tactics. More than making scattered efforts and chasing “Likes” and Tweets, companies that use social media successfully are integrating a broad range of diverse media to create brand-related social sharing, engagement, and customer community.

Mobile Marketing

Promotional content delivered to consumers through their mobile devices

Engages customers anywhere, anytime during the buying and relationship-building processes

Mobile marketing features marketing messages, promotions, and other content delivered to on-the-go consumers through their mobile devices. Marketers use mobile marketing to engage customers anywhere, anytime during the buying and relationship-building processes. The widespread adoption of mobile devices and the surge in mobile Web traffic have made mobile marketing a must for most brands. Retailers can use mobile marketing to enrich the customer’s shopping experience at the same time they stimulate buying.

For example, Macy’s built its recent “Brasil: A Magical Journey” promotion around a popular and imaginative smartphone app. The campaign featured apparel from Brazilian designers and in-store experiences celebrating Brazilian culture. By using their smartphones to scan codes throughout the store, shoppers could learn about featured fashions and experience Brazilian culture through virtual tours.

Learning Objective 14-4 Summary

Social media – online places to congregate, socialize, and exchange views and information

Brands use existing or set up their own

Social media advantages and challenges:

Advantage – engagement and social sharing capabilities

Challenge – consumers’ control over social media content

Mobile marketing – messages, promotions, and other content delivered to consumers’ mobile devices

In the digital age, countless independent and commercial social media have arisen that give consumers online places to congregate, socialize, and exchange views and information. Brands can use existing social media or they can set up their own. Most brands – large and small – have set up shop on a host of social media sites. Some of the major social networks are huge; other niche social media cater to the needs of smaller communities of like-minded people. Beyond these independent social media, many companies have created their own online brand communities. More than making just scattered efforts and chasing “Likes” and Tweets, most companies are integrating a broad range of diverse media to create brand-related social sharing, engagement, and customer community.

Using social media presents both advantages and challenges. On the plus side, social media are targeted and personal, interactive, immediate, timely, and cost-effective. Perhaps the biggest advantage is their engagement and social sharing capabilities, making them ideal for creating customer community. On the down side, consumers’ control over social media content makes social media difficult to control.

Mobile marketing features marketing messages, promotions, and other content delivered to on-the-go consumers through their mobile devices. Many marketers have created their own mobile online sites with useful and entertaining apps to engage customers with their brands and help them shop.

Learning Objective 14-5

Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing.

Direct-Mail Marketing

Sending an offer, announcement, reminder, or other item directly to a person at a particular address

Tangible and creates emotional connection with customers

Effective component of a broader integrated marketing campaign

Direct and personalized

Sent to consumers who want to receive it

Even though new digital forms of direct marketing are bursting onto the scene, traditional direct mail is still heavily used by most marketers.

Direct-mail marketing involves sending an offer, announcement, reminder, or other item directly to a person at a particular address. Direct mail is well suited to direct, one-to-one communication. It permits high-target market selectivity, can be personalized, is flexible, and allows the easy measurement of results. Although direct mail costs more per thousand people reached than mass media such as television or magazines, the people it reaches are much better prospects.

Direct-mail marketing offers some distinct advantages over digital forms. It provides something tangible for people to hold and keep, and it can be used to send samples. It creates an emotional connection with customers that digital cannot. It can be an effective component of a broader integrated marketing campaign. Direct mail may be resented as junk mail if sent to people who have no interest in it. For this reason, smart marketers are targeting their direct mail carefully so as not to waste their money and recipients’ time. They are designing permission-based programs that send direct mail only to those who want to receive it.

Catalog Marketing (1 of 2)

Print, video, or digital catalogs that are mailed to select customers, made available in stores, or presented online

Eliminates printing and mailing costs

No space constraints

Broader assortment of presentation formats

Real-time merchandising capabilities

Prices can be adjusted instantly

Advances in technology, along with the trend of personalized, one-to-one marketing, have resulted in exciting changes in catalog marketing. Catalog marketing is a form of direct marketing through print, video, or digital catalogs that are mailed to select customers, made available in stores, or presented online.

With the stampede to the Internet and digital marketing, more and more catalogs are going digital. They eliminate printing and mailing costs. They can offer an almost unlimited amount of merchandise. They offer a broader assortment of presentation formats, including search and video. They allow real-time merchandising; products and features can be added or removed as needed, and prices can be adjusted instantly to match demand.

Catalog Marketing (2 of 2)

Patagonia sends out catalogs built around lifestyle themes.

Even in the digital era, printed catalogs are still thriving. In addition to its traditional catalogs, Patagonia sends out catalogs built around lifestyle themes, as “a way we’re speaking to our closest friends and people who know the brand really well.”

One recent catalog featured falconry and included only a handful of products, placed on the last four pages of the 43-page book. “Years ago, [a catalog] was a selling tool, and now it’s become an inspirational source,” says another direct marketer. “We know our customers love a tactile experience.”

Telemarketing and Direct-Response Television (DRTV) Marketing

Telemarketing: Selling directly to customers using the telephone

Outbound and inbound telephone marketing

Rise of do-not-call legislation resulted in opt-in calling systems

Direct-response television (DRTV) marketing

Direct-response television advertising

Interactive TV (iTV) advertising

Telemarketing involves using the telephone to sell directly to consumers and business customers. Marketers use outbound telephone marketing to sell directly to consumers and businesses and inbound toll-free numbers to receive orders from television and print ads, direct mail, or catalogs.

In 2003, U.S. lawmakers established the National Do Not Call Registry, which is managed by the Federal Trade Commission (FTC). The legislation bans most telemarketing calls to registered phone numbers. Rather than making unwanted calls, many of these marketers are developing “opt-in” calling systems, in which they provide useful information and offers to customers who have invited the company to contact them by phone or email.

Direct-response television (DRTV) marketing refers to direct marketing via television, including direct-response television advertising (or infomercials) and interactive television (or iTV) advertising. DRTV ads are often associated with somewhat loud or questionable pitches for cleaners, stain removers, kitchen gadgets, and nifty ways to stay in shape without working very hard at it. A more recent form of direct-response television marketing is interactive TV (iTV), which lets viewers interact with television programming and advertising. As the lines continue to blur between TV screens and other video screens, interactive ads and infomercials are appearing not just on TV, but also on mobile, online, and social media platforms, adding even more TV-like interactive direct marketing venues.

Kiosk Marketing (1 of 2)

Product or service information and ordering machines placed by companies

Smart kiosks

Wireless-enabled

Facial recognition

As consumers become more and more comfortable with digital and touchscreen technologies, many companies are placing information and ordering machines, called kiosks, in stores, airports, hotels, college campuses, and other locations.

Many modern smart kiosks are now wireless-enabled. Some machines even use facial recognition software that lets them guess gender and age and make product recommendations based on that data.

ZoomSystems creates small, free-standing kiosks called ZoomShops for retailers ranging from Apple, and The Body Shop to Macy’s and Best Buy. For example, 100 Best Buy Express ZoomShop kiosks across the country, conveniently located in airports, busy malls, military bases, and resorts, automatically dispense an assortment of portable media players, digital cameras, gaming consoles, headphones, phone chargers, travel gadgets, and other popular products.

Kiosk Marketing (2 of 2)

Redbox operates more than 42,000 DVD rental kiosks.

Redbox operates more than 42,000 DVD rental kiosks in supermarkets, fast-food restaurants, and other retail outlets.

Public Policy Issues in Direct and Digital Marketing

Irritation, Unfairness, Deception, and Fraud

Consumer Privacy

A Need for Action

Direct marketers and their customers usually enjoy mutually rewarding relationships. Occasionally, however, a darker side emerges. Abuses range from simple excesses that irritate consumers to instances of unfair practices or even outright deception and fraud. The direct marketing industry has also faced growing privacy concerns, and online marketers must deal with Internet and mobile security issues.

Irritation, Unfairness, Deception, and Fraud

Irritation

Loud, long, and insistent TV commercials

Junk mail and spam

Unfairness

Taking unfair advantage of impulsive buyers

Deception and fraud

Investment scams or phony collections for charity

Internet fraud

Phishing

Online and digital security

Access by vulnerable or unauthorized groups

Direct marketing excesses sometimes annoy or offend consumers. For example, many customers dislike direct-response TV commercials that are too loud, long, and insistent. Their mailboxes fill up with unwanted junk mail, and their computer, phone, and tablet screens flash with unwanted online or mobile display ads, pop-ups, or pop-unders. Some direct marketers have been accused of taking unfair advantage of impulsive or less-sophisticated buyers through television shopping channels, enticing Web sites, and program-long infomercials targeting television-addicted shoppers. They feature smooth-talking hosts, elaborately staged demonstrations, claims of drastic price reductions, time limitations, and unequaled ease of purchase to inflame buyers who have low sales resistance.

Fraudulent schemes, such as investment scams or phony collections for charity, have also multiplied in recent years. One common form of Internet fraud is phishing, a type of identity theft that uses deceptive emails and fraudulent online sites to fool users into divulging their personal data. Many consumers worry about online and digital security. They fear that unscrupulous snoopers will eavesdrop on their online transactions and social media postings, picking up personal information or intercepting credit and debit card numbers. Another Internet marketing concern is that of access by vulnerable or unauthorized groups. For example, marketers of adult-oriented materials and sites have found it difficult to restrict access by minors.

Consumer Privacy

Fear of invasion of privacy

Ready availability of information leaves consumers open to abuse

Invasion of privacy is perhaps the toughest public policy issue now confronting the direct marketing industry. Consumers benefit from database marketing. However, too much knowledge about consumers’ lives may lead to marketers taking unfair advantage of consumers. Some consumers and policy makers worry that the ready availability of information about consumers may leave them open to abuse.

A Need for Action (1 of 2)

Government actions

Do-not-call, do-not-mail, do-not-track lists

Can Spam legislation

Congressional legislation – Give more control to consumers over how online information is used

Federal Trade Commission (FTC) – Policing online privacy

To curb direct marketing excesses, various government agencies are investigating not only do-not-call lists but also do-not-mail lists, do-not-track online lists, and Can Spam legislation. In response to online privacy and security concerns, the federal government has considered numerous legislative actions to regulate how online, social media, and mobile operators obtain and use consumer information. For example, Congress is drafting legislation that would give consumers more control over how online information is used. In addition, the FTC is taking a more active role in policing online privacy.

A Need for Action (2 of 2)

Marketers’ actions

Self-regulatory principles

Advertising option icon

Privacy rights of children

Companies’ actions

Own security measures

Industry-wide measures

Marketers are required to call for strong actions to monitor and prevent privacy abuses before legislators step in to do it for them.

Self-regulatory principles call for online marketers to provide transparency and choice to consumers if Web viewing data is collected or used for targeting interest-based advertising. The ad industry has agreed on an advertising option icon, a little “i” inside a triangle, that is added to most behaviorally targeted online ads to tell consumers why they are seeing a particular ad and allowing them to opt out.

Of special concern are the privacy rights of children. In 2000, Congress passed the Children’s Online Privacy Protection Act (COPPA), which requires online operators targeting children to post privacy policies on their sites. They must also notify and obtain parental consent before collecting personal information from children under age 13.

Many companies have responded independently to consumer privacy and security concerns. Still others take an industry-wide approach. For example, TRUSTe, a nonprofit self-regulatory organization, works with many large corporate sponsors, including Microsoft, AT&T, Facebook, Disney, and Apple, to audit privacy and security measures and help consumers navigate the Internet safely.

Learning Objective 14-5 Summary

Traditional direct marketing tools are still heavily used.

Aggressive and shady tactics of a few direct marketers can bother or harm consumers.

Irritation, unfairness, deception, and fraud

Invasion of privacy and Internet security

A need for action from government and industry

Although the fast-growing digital marketing tools have grabbed most of the headlines lately, traditional direct marketing tools are very much alive and still heavily used. The major forms are face-to-face or personal selling, direct-mail marketing, catalog marketing, telemarketing, direct-response television (DRTV) marketing, and kiosk marketing.

Direct marketers and their customers usually enjoy mutually rewarding relationships. Sometimes, the aggressive and shady tactics of a few direct marketers can bother or harm consumers, giving the entire industry a black eye. Abuses range from simple excesses that irritate consumers to instances of unfair practices or even outright deception and fraud.

The direct marketing industry has also faced growing concerns about invasion-of-privacy and Internet security issues. Such concerns call for strong action by marketers and public policy makers to curb direct marketing abuses. In the end, most direct marketers want the same things that consumers want: honest and well-designed marketing offers, targeted only toward consumers, who will appreciate and respond to them.

Learning Objectives (3 of 4)

14-1. Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies.

14-2. Identify and discuss the major forms of direct and digital marketing.

14-3. Explain how companies have responded to the Internet and the digital age with various online marketing strategies.

This chapter defined direct and digital marketing and discusses their rapid growth and benefits to customers and companies. It identified and discussed the major forms of direct and digital marketing, and also explained how companies have responded to the Internet and the digital age with various online marketing strategies.

Learning Objectives (4 of 4)

14-4. Discuss how companies use social media and mobile marketing to engage consumers and create brand community.

14-5. Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing.

This chapter discussed how companies use social media and mobile marketing to engage consumers and create brand community. Finally, the chapter identified and discusses the traditional direct marketing forms and overviews the public policy and ethical issues presented by direct marketing.