Media Segmentation and the Rise of Direct Marketing

by

Roberto Bell

Marketing academics have noted increasing media fragmentation. In recent years, the role of advertising and promotion in the overall marketing process has changed considerably. The audiences that marketers seek, along with the media and methods for reaching them, have become increasingly segmented. Advertising and promotional tactics have become more regionalised and targeted to specific audiences.

The extraordinary expansion of media options to reach specific markets has been fully documented. Along with the proliferation of products and services and the segmentation of types of prospects has come an extraordinary proliferation of media. There are new kinds of media, new developments in the traditional media, and new uses for media. Increasingly, the new media are tools for targeting rather than for saturating the mass market.

Information and the role of the customer database

In the information age marketers are not only focusing on analysis, but also understand the value of information collection.

In the past, direct marketing has been distinguishable from other marketing disciplines because of its emphasis on initiating a direct relationship between a buyer and a seller, a relationship that until recently centered primarily on the exchange of goods and services. However, in today’s market, exchanging information is becoming almost as important as exchanging goods and services. With rising costs, crowded supermarket shelves, and overstuffed mailboxes, smart marketers are not just efficiently consummating a sale, they are also providing a chance for customers to interact with them.

Of all these changes surely the most revolutionary is the ability to store in the computer information about your prime prospects and customers and, in effect, create a database that becomes your private marketplace. As the cost of accumulating and accessing the data drops, the ability to talk directly to your prospects and clients — and to build one-to-one relationships with them will continue to grow.

The new marketing environment

The effects on consumers of overwhelming change and the acceleration of change in our time have been brilliantly documented by Hugh Mackay in Reinventing Australia: So apparent is our national malaise that it has become fashionable to talk about the Age of Anxiety.

For people given to applying labels to decades, the 1980s was popularly described as “The Anxious Eighties” and there is no doubt that the decade lived up to the promise of that rather anxious label. Australia has not been alone in all this. All around the Western world, social commentators have been impressed by the rising level of anxiety over the past 20 years.

The mind and mood of consumers in the 2000s provide interesting challenges.

The growing number of consumer segments and the simultaneous increase in available products have made marketing much harder. Manufacturers are in a quandary about what to produce; retail merchandise buyers are overwhelmed by the task of product selection; and advertisers feel swamped trying to convey appropriate messages to so many market segments about so many products …companies are grappling with the fact that mass advertising campaigns have become less and less effective in reaching diverse groups of consumers.

Marketers must now fight to establish the relevance of their products in an extremely fractured marketplace. The marketing future will undoubtedly look different in another respect as well: customer information technologies will change the relative roles of retailers, manufacturers, and media companies.

Retailers have a natural advantage because they can directly measure customer behaviour and get first crack at the broadest range of information. Indeed, point-of-sale scanning systems have already played a significant role in shifting power from manufacturers to retailers.

Most important, the balance of power between large and small companies will change. As customer information technology becomes more prevalent, only those companies that can invest the resources and show technological leadership will succeed.

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Media Segmentation and the Rise of Direct Marketing