HARTE-HANKS: MARKETERS INVESTING RESOURCES IN E-MARKETING, DATABASE DEVELOPMENT IN 2005

HARTE-HANKS: MARKETERS INVESTING RESOURCES IN E-MARKETING, DATABASE DEVELOPMENT IN 2005


NEW YORK – August 22, 2005 – A new survey report underwritten by Harte-Hanks, Inc. (NYSE:HHS) and prepared by CSO Insights, Inc., reveals that more than one in five organizations spend more than 45 percent of their entire marketing budgets on "target marketing," and an additional two in five spend between 15 percent and 45 percent on such activity.

According to 2005 Executive Report: Target Marketing Priorities Analysis, nearly three of four companies plan higher investments in database management this year; three in five companies are planning to spend more on e-mail, Web design and data quality initiatives; and more than one in two on search marketing.

A total of 281 companies participated in the survey, reflecting a cross-section of vertical markets among them retail, manufacturing, high-tech and services, among other categories. The survey, conducted via the Web in April and May 2005, was distributed to senior marketing executives from a combination of proprietary and commercially available sources. One in four responses represent firms of more than $1 billion in revenues, and nearly 70 percent of firms are located in the United States. Confidence interval is ± 6 percent (for 95-percent confidence level).

The report was co-authored by Jim Dickie and Barry Trailer, both partners of CSO Insights, based in Boulder, CO (http://www.csoinsights.com), with additional analysis provided by market researchers at Harte-Hanks.

"Database and interactive marketing lead all categories in new marketing investments," said Richard Hochhauser, president and chief executive officer, Harte-Hanks, Inc., in announcing the availability of the full study report. "Web sites and e-mail, in particular, really show strength. Yet struggles with data quality and data management remain pervasive. There is more work to do."

According to the study, 43 percent of respondents have a regular or constant program to support personalization and one-to-one marketing; 33 percent feel they are "good" or "very good" at calculating customer profitability; but more than a third rate their database management as "poor" or "very poor" (just 12 percent rate themselves "very good"). Further, 53 percent of respondents believe that their own customer data are at least 75 percent accurate – and 40 percent of respondents believe that less than half their prospect data are correct.

"Disciplined planning still eludes many marketing organizations," said Hochhauser, who noted that 58 percent of firms have an informal or no process at all for direct marketing planning, while 42 percent do.

Other observations from the report findings:

• 'Mission Critical' Web Sites, Search and E-mail: Among respondents, Web sites and micro-sites, search optimization and e-mail marketing are described as "mission critical" by 53 percent, 43 percent and 41 percent, respectively. Wireless messaging and blogs still have not "broken through" – just 7 percent and 5 percent, respectively, rate these interactive media as "mission critical."
• Market Research and Analytics are Priorities: Businesses want more customer insight in the way of understanding perception of product and services (49 percent), knowing reasons why customers buy and respond (49 percent), and knowing the impact of marketing on awareness, attitudes and intentions (49 percent).
• Lists and Segmentation Challenge Direct Mail: The availability of the right "lists" (66 percent) and the ability to mail the right segments (65 percent) are top cited challenges for postal mail.
• Telemarketing Stays the Course: Fifty-six percent of respondents indicated that they have not shifted marketing from outbound telemarketing, despite added government regulation.
• Information Concerns for an Interactive Age: Security (60 percent), privacy (59 percent), spam (56 percent), and data accuracy (56 percent) are among top levels of concern for digital marketing.

An executive summary and table of contents of the report is available from Harte-Hanks by contacting the company toll-free (USA only), (800) 456-9748 or via e-mail at mailto:contactus@harte-hanks.com?subject=. A full 79-page report also is available.

[Editor's Note: A copy of the full study itself and selected charts from the study are available to editorial members of the media. Harte-Hanks and CSO Insights ask that the report not be posted in its entirety until after October 2005, when links to the full report will be public. Contact Chet Dalzell at (212) 520-3232, or mailto:chet_dalzell@harte-hanks.com?subject=, to request a hard or soft copy of the executive summary or full report.]


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Source: 2005 Executive Report: Target Marketing Priorities Analysis, Harte-Hanks

About CSO Insights
CSO Insights is a research firm that specializes in benchmarking how companies are leveraging people, process, technology, and knowledge to optimize the way they market and sell to customers. During the past ten years, CSO Insight's survey of more than 5,000 sales effectiveness initiatives has become the benchmark for tracking the evolution of how the role of sales is changing, the challenges that are impacting sales performance, and most importantly, what companies are doing to address these issues. For more information, go to http://www.csoinsights.com .

About Harte-Hanks
Harte-Hanks, Inc., San Antonio, TX, is a worldwide, direct and targeted marketing company that provides direct marketing services and shopper advertising opportunities to a wide range of local, regional, national and international consumer and business-to-business marketers. Harte-Hanks Direct Marketing improves the return on its clients' marketing investment with a range of services organized around five solution points: Construct and update the database -- Access the data -- Analyze the data -- Apply the knowledge -- Execute the programs. Expert at each element within this process, Harte-Hanks Direct Marketing is highly skilled at tailoring solutions for each of the vertical markets it serves. Harte-Hanks Shoppers is North America's largest owner, operator and distributor of shopper publications, with shoppers that are zoned into more than 1000 separate editions with circulation of 12 million in California and Florida each week. Visit the Harte-Hanks Web site at http://www.harte-hanks.com or call (800) 456-9748.

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WSJ: Blog-only search engines popping up online

WSJ: Blog-only search engines popping up online

With the number of blogs estimated to be about 16.5 million and rising every day, consumers and Internet start-ups are finding ways to sort through the clutter, according to the Wall Street Journal (WSJ). Unlike search giants such as Google and Yahoo! that search billions of Web pages and, as of now, don't allow blog-only searches, new sites use a variety of Web-tracking tools to perform nearly real-time searches of new blog posts. For example, the most popular of these sites, Technorati.com, monitors blogs using a mechanism called "pinging," where bloggers send out an electronic notice called a ping when they finish posting. Some sites comb through news feeds, while others use automated Web crawlers to search for new entries, says WSJ. Other blog-searching sites include IceRocket.com, Feedster.com, DayPop.com, and BlogLines.com.

 

How (and Why) DTCs Can Use Search Engine Marketing

How (and Why) DTCs Can Use Search Engine Marketing

By Scott Delea, SVP and GM, DigitalGrit, Inc.

What’s the most effective tool available to DTC marketers with limited budgets?

The easy answer: Search Engine Marketing. Last year, $7.3billion was spent on Internet marketing, exceeding the spending highs of the Web’s turn-of-the-century heyday.2 In the second quarter of 2004, 40% of all Internet advertising dollars ($947 million) were spent on Search Marketing – a sure sign that smart marketers know where the highest return on investment is.

“Pharmaceutical companies are starting to pay closer attention to advertising ROI and their DTC budgets have shifted accordingly,” says Mary Ann Belliveau, Head of Healthcare in Google’s Vertical Markets Group. “People today spend as much time on the Internet as they do watching television, and we’re seeing brands plan their ad campaigns in a much more integrated manner than ever before. Pharmaceutical companies realize that the wide reach they get with television ads prompt consumers to go to a search engine like Google to research information about both the condition and the brand.”

With Google and Yahoo! among the most heavily visited sites on the Web, it’s clear that her assertion is true (MSN and AOL, with searches fed by Google and Yahoo!’s Overture network are also among the most popular) 5 . Consumers now turn to the Web, not just for work or entertainment, but for information about health and wellness for themselves and their families. 6 In fact, Google is the top referral site for the Healthcare industry, referring over 53% of users to doctor’s sites and over 49% of users to medical sites.

Why is search so popular? A few good reasons: High ROI, pinpoint targeting and true accountability. With the majority of paid Search campaigns charged by the click, advertisers pay only for the leads they receive. (Click prices vary widely as keywords are typically bid upon. The more popular the keyword, the higher the price.) Astounding results can be achieved with as little as 10% of an existing marketing budget.

The ability to zero in on a target audience makes Search especially effective. By bidding on keywords – or search terms – that relate to their product, marketers can place their information right in the path of consumers who are actively seeking health information. For example, the marketer for a prescription allergy treatment might bid on keywords and phrases like “nasal congestion,” “pollen” and “itchy eyes,” as well as their product name. This way, consumers performing searches on any of these terms will find information on that product.

Also attractive is the accountability of Search. Clicks can be tracked accurately and easily – often within the Search Engine itself. (Google and Overture both offer basic campaign tracking.) So marketers can not only see how well their campaigns are performing, but what time of day their ads pull the most, which keywords are working best for them, and where the majority of their traffic is coming from.

Furthermore, because Search campaigns exist – and can be monitored – in real time, testing and tweaking can be affected easily. If a campaign isn’t performing well, keywords can be changed, copy can be altered, and clicks can be redirected – almost instantaneously.

Touching Consumers at Every Stage “DTC Search advertising allows pharmaceutical companies to reach patients at every stage of the pharmaceutical buying cycle,” observes Belliveau. “These programs can be used to reach the undiagnosed population and drive them to seek treatment; create a dialogue between patients and physicians; educate diagnosed patients; increase brand awareness; encourage patient compliance and build brand loyalty.”

Having a Search campaign, according to Belliveau, “allows the brands to reach consumers when they are raising their hand saying ‘Please tell me more about high cholesterol treatments.’ Search advertising is a powerful DTC marketing vehicle.” Search presents the opportunity for DTC marketers to put their products in front of these potential customers in the most effective way. Search offers a “pull,” as opposed to the uninvited “push” of TV ads. Consumers are trolling the Web, actively looking for product information. Their next step is likely to be a trip (or at least a phone call) to their physician – and you want them to ask about your product.

As an example, a patient who suspects they have a specific illness or condition, say, rheumatoid arthritis, may perform a search to learn more about the condition and available treatments, as 55% of online consumers do11. Similarly, a patient who is already on a course of antivirals may have questions throughout his treatment. He may be too embarrassed to call his doctor and first perform a quick search on “herpes treatment” to find the information he needs. (In fact, 48% of prescription drug buyers with Web access report going online to research a drug after receiving a prescription from their doctor.12)

Both scenarios present the opportunity to create a long-term, loyal customer. By providing relevant, informative Search results (and of course, useful information on your product’s site) you can make this consumer feel safe and confident in his course of treatment. Patients may turn to online Search for answers to the questions they’re too embarrassed to ask their doctors. Marketers have the capability, through Search Engine Marketing, to provide these consumers with answers to the questions they have about their prescription medications – and subsequently create a high-level of brand loyalty.

How does Search Engine Marketing work?

Search Engine Marketing (SEM) may seem a little trickier than other areas of Internet marketing simply because there are three different approaches yielding similar results. Here are some definitions of the key types of search listings as defined by the Search Engine Marketing Professional Organization (SEMPO).

Paid Placement: Advertising program where listings are guaranteed to appear in response to particular search terms, with higher ranking typically obtained by paying more than other advertisers. Paid placement listings can be purchased from a portal or a Search network. Search networks are often set up in an auction environment where keywords and phrases are associated with a cost-per-click (CPC) fee. Overture and Google are the largest networks, but MSN and other portals sometimes sell paid placement listings directly as well. Portal sponsorships are also a type of paid placement.

Basically, Paid Placements are brief advertisements that appear as “sponsored links” in most Search Engines. In sites powered by Overture (like Yahoo and MSN), these ads appear as the top listings, as well as along the right-hand column of the page. In Google, through their AdWords program, ads appear only in the right-hand column. Generally, these advertisements are purchased via keyword bidding – selecting a term that best matches your product and a per-click price that you’re willing to pay for it. Based on your bid, your ad will appear higher or lower in the ranking of results. With these ads, you only pay for the traffic you receive. That is, you only pay if someone actually clicks through your listing.

Paid Inclusion: Advertising program where pages are guaranteed to be included in a search engine's index in exchange for payment, though no guarantee of ranking well is typically given.

This is fairly self-explanatory. For site listings with Overture or AskJeeves – particularly if your site has been created with Flash, is frames-based, or features frequently-changing content -- Paid Inclusion is the best way to go. Overture’s SiteMatch option charges reasonable per-page fees for listings, then serves up results based on their relevance to search terms. Google does not offer paid inclusion.

Organic Listings: Listings that search engines do not sell (unlike paid listings). Instead, sites appear solely because a search engine has deemed it editorially important for them to be included, regardless of payment. Paid inclusion content is also often considered "organic" even though it is paid for. This is because that content usually appears intermixed with unpaid organic results.

If you like to play the odds, Organic Search is for you. Results aren’t guaranteed. In fact, if your pages change frequently or were created using Flash, your site might not show up at all. That’s because Search Engines send “spiders” over the Web to seek out text-based content for Organic Search results. For example, if a consumer performs a search on the term “GERD,” the spider will scan the Web looking for Web pages containing that term. The results will be listed in order of relevance – as determined by the Search Engine, not the marketer. Which means if you’re the marketer for a well-known DTC GERD treatment, your listing could be at the top – or somewhere on the fifth page of search results.

And if you are at all concerned about the credibility of Paid Placement or Paid Inclusion listings, you needn’t be. Research shows that the majority of Search users – at least 71% -- are unconcerned about sponsored links and listings.

Scott Delea is Senior Vice President and General Manager of eMarketing Services at DigitalGrit Inc. Scott can be reached at sdelea@DigitalGrit.com.

Social Marketing Comes In Four Flavors

Social Marketing Comes In Four Flavors Consumers' trust in traditional forms of advertising is waning. In 2004, less than 50% of consumers trusted TV and radio ads, and only slightly more trusted print ads. What's more, consumers increasingly say they're bombarded with too many irrelevant ads. These negative attitudes toward traditional marketing have led consumers to take measures to block direct mailers, telemarketers, and TV advertisers from their homes in an accelerating consumer ad backlash. Social or viral marketing -- with its minimal obtrusiveness and trustworthy sources (often other consumers) -- avoids most of the anti-ad reactions that fuel the backlash. By engaging consumers in a dialogue about their products or encouraging consumer-to-consumer dialogue, marketers inevitably lose some control over the message of their campaigns. But what marketers may lose in control, they gain in audience attention, velocity of communication, and much-needed trust from loyal consumers. Tools For Social Marketing How can marketers connect with jaded consumers who avoid traditional campaigns with spam-blockers, DVRs, and Do-Not-Call lists? Four flavors of social marketing can help:

1: Word-of-mouth (WOM) Marketing Disillusioned consumers -- those who've lost trust in marketers -- now turn to each other for trustworthy product information. This consumer-to-consumer "buzz" naturally occurs without the intervention of marketers -- 46% of North American consumers often tell friends and family about products that interest them. When marketers get involved to stimulate WOM activity -- like P&G did when it offered to donate money to an energy-saving charity if Tide Coldwater users sent along product samples -- they must relinquish the control they would have had over a traditional campaign. But this is a small price to pay for the increase in consumer trust created by WOM marketing. While Tide created a buzz arou! nd Coldwater based on environmental awareness, Burger King's successful "Subservient Chicken" Webcast created a humorous buzz for its BK Tender Crisp. 2: Blogs Blogs (think: online journal) provide a venue for marketers and consumers to open a dialogue and facilitate WOM marketing among consumers. Blogs can be a space where corporate executives post their musings and consumers respond, marketers solicit consumers to post reviews of products, or consumers connect and recommend products to each other. Blogs about kids' issues help Stonyfield Farm create a dialogue with parents. Vespa's blogs give its consumers the opportunity to share Vespa scooter experiences. 3: RSS Really Simple Syndication (RSS) is an XML standard that gives consumers the opportunity to aggregate all of their information into one location. RSS provides marketers with many options to reach consumers: Feed sponsorships, ad placements within feeds, and ad headlines are only a few. Though current adoption of RSS is relatively low (only 2% of North American online adults use RSS today), those who use this technology now are the valuable, information-hungry consumers of tomorrow (see figure above). Marketers like Purina and Apple use RSS to inform consumers about new products, send updates about product support, and disseminate consumer-generated content from their Web sites. 4: Podcasting Like RSS, podcasting separates media from a single channel, delivering audio content in a new way. For marketers, podcasts provide opportunities for sponsorships, on-air ads, and original product-specific content. The upside? A captive audience. The downside? A small audience (only 10% of online adults are familiar with podcasting) but a growing one, especially with the addition of a podcasting library in iTunes, which lists more than 600 podcasts about technology and 100 about travel. Marketers looking to repeatedly reach a valuable, younger, tech-savvy crowd should actively explore this new medium. So while traditional one-way marketing campaigns are losing their audience to consumers' ad fatigue, multitasking, and distrust of marketing messages, marketing itself is not dead. It's just gone to the masses. Get involved in the dialogue. If you're interested in learning more about why social marketing works and how to do it, come to our upcoming Boot Camp. Social Marketing: Tapping Into The Power Of Connected Customers with Charlene Li and Jim Nail will take place October 13, 2005, in San Francisco. For details, contact Jennifer Joseph at jjoseph@forrester.com. In the upcoming weeks, look for research on Internet video, mature consumers (55+), advergames, young bloggers, local search, consumer security and phishing, social computing, the CE retail purchase process, mobile music, youth and music, and database marketing trends. Chris Charron Vice President, Research Director Devices, Media, & Marketing Research P.S. If you'd like to suggest research for us to write or if there are data points you're looking to track down, feel free to drop me a line anytime at chrischarron@forrester.com.   Research Referenced In This Issue Best Practices In Market Mix Modeling (35129) Blogging: Bubble Or Big Deal? (35000)    Charting The Course Of Marketing Software (37565) Financial Services Email Marketing Best Practices (37274) Getting Real About Podcasting (37473) How To Build A Word-Of-Mouth Marketing Campaign (37018) Podcasting For Marketers (37016) RSS 101 For Marketers (37422) The Consumer Advertising Backlash Worsens (35123) The North American Consumer: Online Retail Update (36730) The State Of Consumers And Technology: Benchmark 2005 (36987)    The Truth About Teens And Advertising (37574) The Web's Latest Trend: Fashion (37531) Using RSS As A Marketing Tool (35005) VoIP Liberates Voice From The Phone (35749) What Consumers Plan To Do With Content (36741) What's Driving The Hot Consumer PC Market? (37050) What's In Store For Marketing In 2005? (35593) What's The Buzz On Word-Of-Mouth Marketing? (36916) Word-Of-Mouth Marketing Needs Ethics Now (37044)