Eight out of ten e-commerce companies hold a marketing database and use it to target prospects and customers. But there is evidence that direct marketing is not being used to its fullest, with a limited media mix employed and opportunities to enrich data being passed up.
Overall, 83 per cent of companies in this sector hold a marketing database, according to a new survey by DMIS. It interviewed 87 companies trading on-line about their marketing budgets and how these are changing. The level was highest among e-brands* at 87 per cent, compared to 77 per cent of brand.coms* and 70 per cent of dot.coms*.
The average length of time that companies have held a marketing database is 6.5 years, with 43 per cent having one for nine years or more. Among dot.coms*, none had this resource in place for more than four years, reflecting the recency of the Internet-only business model.
Whether these databases are fully suited to direct marketing is not clear, however. The most common source of the data held was customer accounts (38 per cent), which may mean information has not been collected or structured in a way that optimises marketing usage. Many databases were also built passively, with 36 per cent using data from an initial contact or sale. Only 24 per cent were built using rented lists and 18 per cent from responses to mailings.
One-third of e-commerce companies do not profile their database against external data sources, increasing the risk of gone ways and undeliverable mail. This rises to 50 per cent of dot.coms*. There is also very little use of data swaps - only 17 per cent trade customer records with other organisations.
Rented lists have not been used by 34 per cent of e-commerce companies. Among those who do rent data from external sources, the most widely used files are lifestyle databases (22 per cent), the electoral roll or product-specific lists (13 per cent each).
The main reason for renting lists is that the in-house database is not sufficient, according to 35 per cent. Those companies who neither profile their data externally nor rent lists may be fooled into thinking they have a better internal resource than is actually the case.
Jo Howard Brown, managing director of DMIS, comments: "It is very encouraging that so many companies in this relatively new sector have adopted marketing databases. The challenge now is for them to evolve their database marketing practices to take full advantage. And that means being more open to using data from commercial sources - a proven resource for effective direct marketing."
For further information please contact:
Ms Jo Howard-Brown
Telephone: 020 7494 0483
Facsimile: 020 7494 0455
Email: Jo@dmis.co.uk
Notes to Editors:
DMIS commissioned quantitative research into the perceptions and uses of direct mail among advertisers engaged in e-commerce activities. Telephone interviews were carried out among 87 companies during 2001. All of the companies were high advertising spenders and committed users of direct mail.
* E-commerce companies in the survey fell into three types:
Dot.coms - Internet-only organisations which exist solely on-line and have no presence in any other channel (11 per cent of the sample).
Brand.coms - Mainstream companies with an established brand that have set up a separate e-commerce division. This may be branded in the same way, be a sub-brand or have its own brand identity (25 per cent).
E-brands - Organisations, which have made Internet, access a central part of their proposition as part of a multi-channel approach to the market (63 per cent).
