Chapter 11 – Public Relations, Sponsorships, and Direct Promotion
- Understand the different types of direct promotion.
- Understand how social media can be used for advertising and information.
Direct promotion involves the delivery of personalized and often interactive promotional materials to individual consumers via companies or devices such as postal mail, flyers and catalogs, telephone (landline and mobile), television and computers and tablets. It relies on direct communication to individual consumers or their devices. ‡
Printed words have been used around the world for thousands of years to communicate with customers. Promoting products by phone has been used for about 70 years. By contrast, the first banner ad was placed in 1994 and the first ad on Facebook in 2006 (IAS Team, 2017). That means that understanding how to use print and telephone direct promotion and its relative effectiveness is more robust than the understanding around internet based advertising. That being said, some of the lessons learned from the pre-existing form of direct promotion are useful in understanding how consumers will react to the new types. In addition, there has been an explosion in research done around the use of the internet and social media. ‡
Figure 11.3 presents the various types of direct promotion, followed by a description of each type in alphabetical order. There are advantages and disadvantages to any form of direct promotion.
Display ads are placed on other company’s websites or social media platforms. These ads are typically used to attract customers to click on it and visit the advertising company’s website. Along with email, it was one of the earliest types of internet advertising. It works to expose consumers to a new company or product. Banner ads can be static or animated, use text or images or both. Banner ads have been shown to be effective, however they operate in an environment where they must compete with editorial content as well as other banner ads. Companies must be sure to place display ads on websites that attract the target audience that the advertising company is seeking and presents relevant information to them (Lee & Ahn, 2012).‡
Catalogues have developed from a collection of products to the presentation of a multi-sensory experience in order to arouse emotions and to support the communication of a company’s brand image and its values (Zhang, 2020). Catalogues continue to be effective due to the length of time they are kept in the home, the time consumers spend browsing them, and the way in which they activate multiple senses (McNeish, 2019; McNeish & Humphreys, 2002). Catalogue mailings have been steadily increasing since 2015 and response rates have increased by 170% from 2004 to 2018. What is particularly interesting is that this increase in response rate comes from Millennials. Those companies who have traditionally used catalogues continue to do so but even internet retailers such as Wayfair and Amazon are using print catalogues (Forte, 2016; Masters, 2018). ‡
Online catalogues attracted companies’ attention due to the many advantages they offer to the company. They can increase the number of products that may be presented to customers, feature certain products more easily, update prices more frequently than print catalogues, and use dynamic pricing. However, the best response rates for online catalogues come when they are complemented with a print catalog (Zhang, 2020). ‡
Direct Mail is both a promotional strategy and a major distribution channel for other print materials. Direct mail relies on a customer database that includes contact information, demographic, psychographic (e.g., activities, values, interests) and behavioural information (e.g., buying preferences and practices, and response to previous campaigns) (Lewis & Ling, 2016). Unlike email and mobile phone numbers, a person’s name and address is available from a variety of sources. In 2019, Canada Post reported that they delivered 886 million pieces of direct mail (Canada Post, 2019). ‡
Direct Response TV
Direct Response TV refers to commercial messages asking for an immediate response via a toll-free number or a call to visit the website for more information. These may be as short as 60-seconds or as long as 30 minutes (Entrepreneur.com, n.d.). With the increase in the tools associated with online videos, Direct Response TV is not as widely used as in the past (Garduno, 2019). ‡
Email is used to send promotional business information or offers to prospective or existing customers. Email has been shown to be more effective than display ads, however consumer annoyance due to the intrusion into their email account by what they perceive to be irrelevant content or too frequent mailings can reduce its effectiveness. Email is best used when the customer agrees to accept emails from the advertising company and, if possible, indicates their content preferences (Aufreiter et al., 2014; Rejón-Guardia & Martínez-López, 2014).
Printed flyers are used by retailers to increase store traffic and sales (Gijsbrechhts et al., 2003; Ziliani & Ieva, 2015). They continue to be effective especially in highly competitive industries sectors such as grocery, pharmacy, and home improvement. Digital flyers are not a substitute for paper flyers in that consumers perceive them to be cumbersome and time consuming to use due to the limitations in screen size (Paige, 2012). One advantage of printed flyers is they don’t require any information on the consumer or their address information. They are delivered based on publicly available neighborhood data. In this way, consumers consider them less irritating than online promotions. In 2019, Canada Post reported that they delivered 3.5 billion flyers (Canada Post, 2019).‡
Interstitials are full-page ad units served between screens during mobile app navigation. They present a full-screen advertisement at natural transition points such as the beginning or launch of a video or game or during natural breaks in the video or game level. While they can be effective because they get the consumer’s attention, they also interrupt the consumer’s intended activity which may be considered annoying by the target audience (Rejón-Guardia & Martínez-López, 2014). ‡
Search ads are advertisements, promotional content or company websites that appear on browsers such as Google, Bing, Firefox, or Safari when users search on keywords related to a company’s products or services. The priority given to their ad or website depends on what the advertising company is willing to pay to the search engine company. The higher the position in the search, the better the click-through and conversion rates (Berman & Katona, 2013). Companies make use of different techniques such as Search Engine Optimization and Search Engine Marketing to improve the position of their content in the search engines. ‡
Social media can be used in two ways:
- Ad-based social media was discussed under Display ads but here the focus is on advertising posted on social media platforms such as Facebook, Instagram, Twitter, LinkedIn, Instagram, TikTok to promote products or services. Ad-based social media is best for existing customers. Targeting can be done using very specific information supplied by these platforms with the result that brand messages can be developed for very small groups improving the chances of influencing them. This practice is referred to as micro-targeting. However, this practice is not without risk. Facebook and Google, in particular, have been criticized for the extensive use of content posted by users (e.g. age, gender, location their contact list, location, interests), the posts and pages they like, the device they are on when they access their account and along with the day and time of use (Goldman, 2018).‡
- Branded social media is when companies create and use their own social media accounts to connect the brand directly to existing customers, receive feedback from them, present content that supports their brands, and in this way create a brand community (Constantindeides, 2014). By establishing brand communities, a stronger relationship may be created between the brand and its customers. A company must do more than just place product or service focused content on branded social media. The best branded social media is focused on building customers’ knowledge, inspiring them and being responsive when they want to interact with the company. ‡
One way to better understand how a company can effectively use social media accounts is to check out one of your favourite brands on several platforms such as LinkedIn, Twitter and Instagram and evaluate how well they use the strengths of each of these platforms while maintaining a consistency across the platforms (Mottola, 2020). ‡
Voice Calls and Text Messages
Voice calls are made to people’s landline or mobile phones. Unfortunately, consumers tend to hold a negative attitude toward voice calls and feel even more negative toward text messages sent to their mobile phones. In the same way as interstitial advertising, this type of promotion interferes with consumers’ activities at the convenience of the company. Consumers resent that depending on their mobile phone plan they have to pay for the call or text message and may feel that privacy has been violated (Kim, 2020). When using phone-based communication, companies should take an ‘opt in’ approach, that is, get the permission of the customer to text or phone them before doing so and make sure the promotional content is highly relevant to the consumer. Voice calls are most effective with existing customers. ‡
In addition to text and phone calls, mobile phones motivated the creation of software applications (apps). Apps are a type of software that allows consumers to perform specific tasks (GCF Global, n.d.). In 2021, there are millions of these apps available for download for most internet connected devices including computers and tablets. Those who have downloaded a retailer’s app are more likely to use the app rather than a search engine. The result is they are more likely to purchase by impulse than by product features or comparison-shop. ‡
Companies make use of these apps to create a stronger relationship with their customers and a clear and unmediated view of the customers’ buying patterns. For example, grocery stores such as Metro, Sobeys, Safeway, Real Canadian Superstore, IGA, all have apps that offer location-based coupons and flyers as well as regularly purchased items, shopping lists, and recipes. When customers have given permission for the company to interact with them by downloading their app, they are signaling their interest in the company’s products and services. ‡
Websites are the oldest form of internet communication by companies and are used to published content on topics of interest to consumers, influencers and other stakeholders (Hauser et al., 2009). The most effective websites will provide basic information such as contact information, imagery that supports the brand, loads quickly and is easily navigated, has a great search tool and looks and functions well on every device (Mann, 2020). ‡
Interactions between Traditional and Newer Media
Advertising effects vary by medium. Consumers process video advertising differently from text and image-based advertising, offline and online advertising. Consumers’ processing interacts with the data about them available to companies. With the number of media types available to companies, they are challenged to continuously capture and integrate customer data (e.g behavioral, transactional, and preference) in order to have an accurate and complete view of the customer all the while ensuring compliance with laws, regulations and best industry practices. Moreover, access to the device or IP address doesn’t guarantee the identity of the customer in the same way as the postal address or landline phone number of the past (Sullivan, 2021). When there were only a few media types, a company could use one or two media to build and maintain customer relationships. Today, companies must use and manage older and newer media types and constantly examine how the media types interact with each other, and with their brands. ‡
Social media has been found to be most effective in maintaining existing customer relationships (Lee & Bell 2013; Naylor et al., 2012). The interaction with brands on social media is stronger for non-profit groups and fashion, and least with frequently purchased or low involvement consumer goods (Schulze et al., 2014). Note that while companies are interested in a two-way dialogue with customers, many customers are much less interested (Batra & Keller, 2016) as many customers often see the value in products and services in terms of their functionality rather than other factors. Mass media are more suitable for attracting new users and driving brand penetration because they depend less on specific and detailed information about individuals in the target audience.‡
Privacy, Consumer Attitudes and Direct Promotion
Companies are concerned about adding new customers, keeping their existing customers informed, achieving revenue targets, and staying ahead of the competition. The more information companies have about customers, the better these companies believe that they can serve their customers. However, it is also important to take the privacy concerns of customers seriously. ‡
Recent research suggests that consumers are more aware of privacy issues than ever before. The Canadian Internet Registration Authority in 2020 released an overview of Canadians’ views on key digital and internet policy issues. Data showed a significant drop in Canadians’ willingness to disclose personal information for online content and services. In 2019, 72% of Canadians said they were willing to disclose some or little personal information in exchange for content or service. In 2020, this percentage dropped to below 40% (CIRA, 2020). In a 2020 EY Global Consumer Privacy Survey, 54% of consumers indicated that they were more conscious of the personal data shared through digital communication than they were before the COVID-19 pandemic (CS Security, 2021). Three factors are important before choosing to share personal data with a company: secure collection and storage (63%), control over what data is being shared (57%) and trust in the company collecting their data (51%).‡
In November, the Canadian government proposed new legislation, Bill C-11, the Digital Charter Implementation Act. It would enact a new privacy law for the private sector, the Consumer for Privacy Protection Act. In particular, citizens would have more control and transparency over their personal information. As of August 2021, the legislation is still being debated. ‡