The Great Debate: Digital Marketing vs The Letter Box DropI attended a Sydney Marketing function in June this year held by the popular Real Estate platform, RateMyAgent, and led by CEO, Mark Armstrong. His presentation was aimed at addressing the evolution of communication with an audience based on how quickly the commercial environment is changing today. This is both a relevant and tough debate, indeed!While this event was Real Estate specific, it is a topical discussion being held across every industry and every market around the world in all boardrooms and strategy meetings: digital vs traditional marketing.Where do we spend our precious budget to get the most cut through to engage our audiences and achieve our organisational goals?So, it’s finally time to analyse both sides and get to the bottom of this debate.Where Are Our Customers?Effective Marketing is all about your audience. This is never up for dispute as we all know it to be true. Knowing that, it may be time to take a step back and consider that age old question: have we thought about our customer?Recent research shows that 87% of consumers now search online for reviews to determine the quality of a local business, and I’m sure that statistic is pretty similar for how people are researching product information too. This is a big shift in behaviour from only a couple of years ago. Organisations didn’t start this- consumers did. We did. We, as people, changed the game, and organisations today are hugely naïve if they don’t think people are already doing most of their research before even contacting your business.As An ExampleMark Armstrong said his son needed an internet router for his house the other day, and at first, he had no clue what a router even was. In about ten minutes online, he become a pro with all of the brands, prices and specifications, then went straight into a local store, went to the shelf and purchased it without speaking to anyone in store.This is very indicative of the modern customer.The Digital InterviewToday, it’s all about ‘the digital interview’- in other words, searching online to find more information about a person or business without actually contacting them. Online dating, LinkedIn, Facebook, websites- it’s all about research before meeting in person. Around 70% of customers make up their mind before that stage, which is something businesses need to accept and adapt to.While statistics are always fickle, all you need to do is think about your own customer’s behaviour, and you instantly know this to be true. Hardly ever does a customer go in unprepared or uninformed.They’re All OnlineHow often do we go to a bar or a restaurant, and find everyone looking at a screen? It’s a sad reality, but a reality none the less. That is where your customer is! On their digital device.People aren’t looking for reviews and information in your physical office or in your marketing collateral – they are looking online. So, being there for your audience is absolutely crucial for your business success.
It’s all about your audience, after all.The Three Arguments: Digital vs Traditional MarketingThere are the three main considerations when deciding the pros and cons of new digital marketing versus more traditional methods, like the letter box drop or print.(1) Cost
(2) Effectiveness
(3) AccountabilityCOSTAs a general rule, more traditional methods tend to be far more costly in so many ways. It’s expensive to design, print and physically deliver materials like these. Now look at digital methods: it’s almost instant, requires little design due to templates, and the reach is not physically limited, meaning you can get ten times the exposure for around one-tenth of the cost.They seem to be light years apart on the cost front.For example, a client came to me recently and told me that the only advertising he was doing was on the back of local shopper dockets, which wasn’t giving him any tangible results, but was still costing him a few hundred dollars a month. For a fraction of this cost, I put his adverts onto Facebook and Google, and he immediately noticed the difference in leads generated!EFFECTIVENESSHow long do letterbox drops, print media and even mainstream advertising last?
Think about a letterbox specifically. The printed material sits in an office, then in a mail box all day. Then, when your audience gets home, are they truly engaged when they check their letterbox, stumbling in from work? They are coming home with the shopping, or wrangling the kids. This material has literally one second to capture them in amongst the rest of the clutter, and is so easy to ignore. That’s not to say it doesn’t occasionally work, but the chance of engagement is very low.Now, consider digital ads. It stays online for a much longer time, and due to the customisable nature of online targeting, it can pop up when the customer is more engaged and in the right headspace. It meets them on their terms, like when they are on their phone killing time, or browsing on a website, and so on. They can also interact with it by clicking on it, watching it, zooming in on it, saving it and much more.In comparison, think about when you hear a radio ad or see a TV ad: you have to remember and recall the advert at a later time for it to have any impact. This means your audience has to spend the effort to remember to act on it at a later time when it’s more relevant, such as when they get out of the car. Making this worse today is that we are constantly bombarded by ads and messages, which means that it’s very hard to keep one specific advert in your mind. You can’t rely on your customer recalling the message – you need to make it easy and at their fingertips.Digitally, your customer can fully interact at the very point they experience the piece of content, meaning engagement is far greater.ACCOUNTABILITYWhich technique truly works? What really has cut through and metrics to measure it? If you ask most organisations who spend budget yearly on letterbox drops, for example, they will say things like “$50,000 a year”, and then if you ask them “does this work?”, all they do is shrug their shoulders.The problem is, some businesses get into a rut of “it’s how we’ve always done it.” This represents a concerning shortfall in our perspective and our priorities. Our industries are too tough and our competitors too smart for us to be thinking this way anymore.On the digital marketing side, with retarget marketing and tracking cookies, online communication and adverts are able to serve up your communication to more defined and far better aligned demographics. Your adverts are more intelligent because they learn about the behaviour of your audience and adapt to how they consume content, then works out where and when to best display your marketing.The Three Battlegrounds of MarketingFrom the 1960ies, there has been an evolution of Marketing and communication battlegrounds based on how we built our customer database.(1) The Physical AddressOrganisations clambered to obtain the physical addresses of customers to communicate with them physically, either with a sales person, door knocking or letter box communications.(2) The Email AddressNext, emails went through an effective stage and businesses rushed to fill their databases with everyone’s @.com address. However today, we have found this to be far less effective do the quantity of spam everyone receives daily.(3) The Computer AddressPeople live on their mobiles and tablets now- this is where they are today. The battlefield has become exposure based on IP address online. Building a database of tracking cookies has become the Marketing battleground of today.While these IP addresses are kept private due to Privacy Laws and you never get the actual details, it doesn’t matter as you can rest assured that this technology is getting your message in front of the right people. Then tracking success comes from the metrics and analytics behind these interactions.
The core essence of Marketing hasn’t changed across any of the above battlegrounds: it’s always been about reaching your audience. The only thing that has changes is how- and this is a direct result from how the marketplace and consumer behaviour is evolving.What is it about Digital Marketing then?Digital Marketing is effective because it is customisable. It can target specific demographics to ensure that the best audience is getting your adverts and content at the right times.The following are three combined ways of how digital marketing finds your audience.(1) LocationGoogle tags computers with a geographical location. While letterbox drops can do the same, location is where the comparison ends. Digital is able to combine location with the following two qualifiers to ensure that your message is tailored, rather than mass distributed to just anyone.For example, in the Real Estate industry, around 70% of residences are investor controlled, which means letterbox drops are ineffective because the people receiving the materials are not the decision makers and therefore not finding themselves in the hands of the right people. Digital equivalents would use location and the following two to ensure it is being fed to the right customers.(2) Browsing HistoryIt is the fact above that allows digital marketing to take it one step further. The history of your browser paints a picture of the type of person your customer is and their interests, which means that adverts can be served up to match this. It’s not a perfectly accurate science, however due to the cost effectiveness of digital marketing, it has a far better cut through and success rate.(3) Remarketing and Tracking CookiesAs you move from website to website, tracking cookies embed themselves into your web browser to allow the content be catered specifically to you, so you are not receiving irrelevant messages. This allows advertising content to be shown to a relevant audience rather than just anyone.Where is Marketing Heading Next?Given that digital marketing is following around your ideal customer and delivering them relevant content, it seems to be working effectively at the moment. However, if I know Marketing the way I think I do, the next stage will be empathetic retarget marketing, which means showing the advert not just anywhere on any website, but when the person is browsing material that is contextually relevant.For example, when your customer, who has already been identified as interested in Real Estate, reaches a Real Estate or property website, the ad will be displayed, as opposed to how it is now, where it comes up on any website they may be looking at.It’s all about being in front of the right customer when they are in the right frame of mind.
The Great Debate: Digital Vs Traditional Marketing
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House Price Trend in Italy’s Top Resorts
The surveys conducted by Nomisma and F.I.M.A.A. (the largest Italian Realtors association) show that Italy’s tourist property market maintains a substantial stability in last two years, following a significant growth in the period 2001 to 2008.Comparing the historical series of house average prices for main Italy’s sea and mountain resorts, we notice a smoother trend for the sea resorts, with an overall increase of 62% in years 2000 to 2008 and values of growth between a minimum of 2% in 2008 and a maximum of 9% in 2003. In the same period (2000 to 2008) the curve for non-sea resorts is more nervous: it shows an overall growth in the house average price of 51%, with a pick of 9.8% in 2004 and a minimum of 2.1% in 2008. After 2008, prices begin a slight decrease, more pronounced for sea resorts (-06% for sea resorts, -0,1% for non-sea resorts). We can say then that Italian tourist property market prices hold up the impact of the world crisis, as well as the national property market.The F.I.M.A.A. surveys rank the ten sea and mountain resorts with the highest prices for best houses: i.e. they consider the average of highest sale prices observed (of course, the maximum prices can be considerably higher than the average). There are some interesting divergences between the group of top sea resorts and the top mountain resorts.The group of the best sea resorts shows a low mobility, featuring a list of only twelve localities which appear in the top ten ranking during years 2006 to 2010. Santa Margherita Ligure and Porto Cervo are competing for the supremacy, with two first positions each, while Campania resorts (Capri and Positano) boast the strongest price growth (round 14 % and 11%): Capri gains first place in 2010, with 13,100 Euros/SQM. The resort of Fregene, a favourite with Romans VIPs, is declining, leaving the top ten ranking in 2009 and 2010. Tuscany resorts (Forte dei Marmi and Viareggio) are ascending instead. Notice that the price variation refers to the price of the most expensive houses: i.e. the average of the highest prices observed.The low increases (in some cases decreases) are indicative of the market tendency to reduce the excessive prices achieved. Take Porto Cervo as an example: the average price of best houses was 13,500 Euros/SQM in 2007 (when Porto Cervo was number one), while in 2010 we find a price of 12,000 Euros/SQM. Really, the average of the twelve sea resorts has not substantially changed in 2010 (10,325) with respect to 2006 (10,225). The list of the twelve resorts is reported below, with the average position referred to the whole period 2006-2010 and the average price observed in 2010 for the best houses. Portofino, probably because of the very few property transactions, is not among the localities monitored by F.I.M.A.A.Top sea resorts (2006 to 2010).
Santa Margherita Ligure (Liguria): 1.8 – 12,500 Euros/SQM
Porto Cervo (Sardinia): 2.4 – 12,000 Euros/SQM
Forte dei Marmi (Tuscany): 2.6 – 13,000 Euros/SQM
Capri (Campania): 3.2 – 13,100 Euros/SQM
Alassio (Liguria): 5.6 – 9,200 Euros/SQM
Positano (Campania): 6.8 – 10,300 Euros/SQM
Porto Rotondo (Sardinia): 8 – 8,700 Euros/SQM
Viareggio(Tuscany): 8 – 9,500 Euros/SQM
Sestri Levante (Liguria): 9.2 – 9,000 Euros/SQM
Anacapri (Campania): 9.2 – 9,400 Euros/SQM
Fregene (Lazio): 10 – 8,200 Euros/SQM
Cinque Terre (Liguria): 10.4 – 9,000 Euros/SQMThe group of mountain resorts appears to be more dynamic. In fact, we find 17 localities which enter at least once in the yearly top ten ranking. Really, the top of the ranking remains well stable, showing constantly the same resorts at the first three positions: Cortina d’Ampezzo, Madonna di Campiglio and Courmayeur. Cortina d’Ampezzo is by far the winner, resulting every year the locality with maximum house price among both the sea and mountains resorts, featuring a price of 19,000 Euros/SQM in 2010. But in the lower part of ranking, things go differently. In fact, we see the strong decline of Piedmont resorts Sestriere and Bardonecchia, which had probably benefited from the 2006 Turin Winter Olympic Games. They shift from 5th and 7th place in 2006 to 18th and 17th in 2010, with a decrease in the best house price of 27.55% and 11.44% respectively.The performance of Cervinia is similar: it exits the top ten ranking in 2009 and 2010, moving from 6,030 Euros /SQM to 5,000 Euros in 2010. San Martino di Castrozza, Gressoney-Saint-Jean, Canazei and Moena are the ascending resorts: all these were out of top ten ranking in 2006 and have entered the top ten only in 2009 or 2010. Gressoney-Saint-Jean achieved a price increase of 27.95%, bringing on a par with the twin village Gressoney La-Trinite’. Ortisei, San Martino di Castrozza and Moena achieve the best performance, with a price increase greater than 40%, and confirm the great attraction of Dolomites. Overall, the average price of best houses in the mountain resorts group is lower than in the sea resorts group (8,015 Euros/SQM vs. 10,325), but the increase 2006 to 2010 is far higher (17.68% vs. 0.97%).Top mountain resorts (2006 to 2010).
Cortina d’Ampezzo (Trentino Alto Adige): 1 – 19,000 Euros/SQM
Madonna di Campiglio (Trentino Alto Adige): 2 – 13,000 Euros/SQM
Courmayeur (Valle d’Aosta): 3 – 10,800 Euros/SQM
Corvara (Trentino Alto Adige): 4.6 – 9,000 Euros/SQM
Madesimo (Lombardia): 6.6 – 7,070 Euros/SQM
Gressoney L.T. (Valle d’Aosta): 8.6 – 6,500 Euros/SQM
Ortisei (Trentino Alto Adige): 9.2 – 9,000 Euros/SQM
Sestriere (Piedmont): 9.4 – 5,000 Euros/SQM
Bardonecchia (Piedmont): 11 – 5,500 Euros/SQM
Selva di Val Gardena (Trentino Alto Adige): 11.2 – 6,269 Euros/SQM
Champoluc (Valle d’Aosta): 11.4 – 6,000 Euros/SQM
San Martino di Castrozza (Trentino Alto Adige): 11.8 – 8,000 Euros/SQM
Cervinia (Valle d’Aosta): 12 – 5,000 Euros/SQM
Bormio (Lombardia): 12.2 – 6,130 Euros/SQM
Gressoney S.G. (Valle d’Aosta): 13.2 – 6,500 Euros/SQM
Canazei (Valle d’Aosta): 13.2 – 7,000 Euros/SQM
Moena (Trentino Alto Adige): 16.2 – 6,500 Euros/SQMBehind the top resorts, one of the best performances among the sea localities, is realized by Punta Marina, the small town in the Municipality of Ravenna, which achieved an increase of nearly 28% in the price of the best houses, following the similar growth already realized by Marina di Ravenna. These resorts are considered not only for holidays, but also as an alternative residence to the near town of Ravenna.