Getting In Print

Entrepreneur, July, 2000 by Melissa Campanelli

Eyeballs don't spend all day staring at monitors. It's e-marketing time for catalogs, posters and mailings.

Up until last year, Jim Daniels spent most of his advertising budget on various forms of Internet advertising, such as e-mails to people who had requested solicitations. As owner and sole employee of Smithfield, Rhode Island-based JDD Publishing (www.bizweb2000.com), a publisher of Internet marketing books, services and software, Daniels, 35, reached prospects by advertising in e-zines and targeting opt-in e-mail newsletters. In exchange, he got visitors to his Web site and optin e-mail addresses for his e-zine.

Although online programs worked well, Daniels decided this past year to try a different approach, an offline one, via a targeted direct-marketing program. After all, he'd already amassed a large internal database of customers' names and street addresses.

Daniels is just one of many e-tailers who started out using online banner-exchange programs, e-mail marketing, search engines and free links to spur traffic to their Web sites. But these days, online tactics alone aren't enough. "Online marketing should be just one component of an Internet [business's] marketing, especially since right now, click-through rates are less than 1 percent," says Tim Washer, vice president of media and telecom practice at NFO Interactive, a market research firm in Greenwich, Connecticut. "The majority of a campaign should be offline."

WHAT IT TAKES

Unfortunately, offline advertising isn't cheap. Studies show that a small Internet company with $20 million in sales generally spends 10 to 20 percent of its revenue on advertising, with 75 percent of the advertising budget spent on offline endeavors. "Offline advertising is more expensive than online, for sure," says Daniels. "Depending on the online method you use, it can be as much as 25 percent more. But it's worth it to me."

For his campaign, Daniels developed a simple four-page, full-color catalog featuring his company's products and services. Now, whenever someone orders a product, he packages the catalog with the order. He also regularly sends it to the customers in his extensive database of names and addresses.

Here's the cost breakdown: To print and mail the first 5,000 catalogs, Daniels spent $2,500. But because the campaign proved so successful, Daniels now sends between 5,000 and 10,000 updated catalogs to customers each year. He has also purchased a list of 5,000 names and addresses of fellow Web site entrepreneurs for 10 cents a piece from infoUSA.com and sends postcards to these prospects any time he wants fresh leads. Total cost? Approximately 2.5 cents printing each direct-mail piece, plus postal bulk-mail rates.

Offline efforts work well for Daniels. Today, he devotes 10 percent of his yearly marketing budget to offline advertising--and that percentage is growing. Says Daniels, "People are constantly changing their e-mail addresses, so it's hard to keep in touch with everybody on your list. But when you put catalogs into customers' hands, you're reaching them in the best way possible."

GOING DIRECT

While offline advertising is a good way to drive people to your site, it serves another purpose as well: It lets you compete for customers for a relatively small cost--at least when compared to the millions of dollars large, publicly owned Internet sites spend. "Mom-and-pop shops are competing with all these established brands that have name-recognition and awareness," says Washer, "but they can get more bang for their buck with targeted tactics like direct marketing." By the end of 1999, Washer says, dotcoms spent more than $3 billion on offline advertising. And research suggests they'll continue to spend: A recent study by Jupiter Communications predicts Net companies may invest as much as $7.4 billion by the end of this year in offline radio and TV advertising.

The good news: Direct-marketing campaigns can easily be prepared in-house. With help from an in-house designer for the catalog, Daniels put his campaign together himself. If you want to follow Daniels' lead and create a direct-mail campaign, Web sites like ELetter.com can help. The San Jose, California, company prints, folds, stuffs, addresses and mails postcards or letters for customers using customers' very own computer-designed mailings, thus eliminating the days, sometimes weeks, it can take to complete the process.

Of course, you can launch an offline direct-mail campaign with the help of a small direct-marketing agency or marketing consultant for a relatively low price. To locate an agency, check out the Web sites of the Direct Marketing Association (www.the-dma.org) or the American Marketing Association (www.ama.org). Or try local Internet or technology organizations, such as the New York New Media Association (www.nynma.org) or the Northern Virginia Technology Council (www.nvtc.org). Some of the groups sponsor direct-marketing and other inexpensive workshops. Assuming you glean enough information from them, you should be able to launch your own campaign in no time.