Use Targeting Techniques to Reach High-Value Potential Customers Directly

We’ve talked about how traditional advertising in space-ads in trade magazines and TV is not effective when trying to reach narrow demographic segments.  For this, techniques like direct mail were used.  You would use a list containing just the names and addresses of the category you needed and simply send them your material.  To give you an idea of how this worked, I used a list service called TIDS — Technical Information Distribution Service.  TIDS had the names of over 100,000 designers in the electronics community, and had them all sorted by company, company size, title, etc.  Then they had those people fill out a questionnaire that listed all of the possible categories of products… they could pick as many as they wanted.  These were the product categories they were interested in receiving material on.

In the case of reaching the 100 engineers designing disk controllers, all we needed to do was call TIDS and instruct them to sort on that product category.  They would give me the exact number of people in their database and we’d send them the material to send.  Talk about targeted!

To give you an idea of just how targeted, I once saw AMD use a TIDS mailer to recruit some hard-to-find analog designers.  It turned out there were very few in the country, but a group was working at Harris Corp in Melbourne, Florida.  AMD prepared a recruiting ad and sent it out as a TIDS mailing.  It looked like it had gone to the entire country, but in fact only about ten copies were actually sent… all to the zip code of Harris.  If Harris realized the ad had only been sent to a few of their employees, they would have been upset, but they never knew.  You might wonder how I happened to know, but let’s just say that chip marketing in Silicon Valley is a small community.

Using Search Engine Ads

TIDS is long gone, and as much as I bemoan their disappearance, direct mail has pretty much disappeared too.  Fortunately there is a new way to do this, in many ways better than TIDS.  That way is buying search ads on sites like Google.  Think about it.  We never really knew if the people that checked the box on the TIDS questionnaire for 16-bit microcontrollers were really using them… they might have just been casually curious.  Personally I would guess that at least half of the checked categories on those questionnaires fell into the  casually curious area.  But if you were to buy the search term for 16-bit microcontrollers, you can be pretty sure the people are more than just casually curious… they’re so curious they’ve taken the time to type that term into the Google search box.  That’s a LOT better.

Of course, limiting these people to just those in Melbourne, Florida gets tricky, but why bother?  You could just as easily have bought the search terms covering people looking for employment as analog designers.  That would actually be a wider, richer net than just the Melbourne zip code.

Advertising and Direct Mail are NOT Dead

Although a glance at the size of most magazines today show a big drop, there are still products that are well suited to conventional space ads.  Remember that because of the fixed ratio of ad pages to editorial pages, a 10 page drop in ad pages probably results in an addional 10 page drop in editorial pages too — a total of 20 pages!  Look at the ads that are left.  The cigarette ads have disappeared, the car ads are greatly reduced, but beer still sells well in all of the broad audience publications.  And there’s still lots  of travel and medication ads.

Direct mail has fallen off a lot due to a combination of higher postage rates and folks’ growing ability to just ignore it and toss it, unopened.  Traditional wisdom was that direct mail response rates were around 1% (1% of the mail sent out resulted in sales), but I think that was always pretty optimistic.  I’ve done this stuff from time to time and the average was closer to 0.5%.  In fact, I always designed these campaigns to break-even at a response rate of 0.25%.  Catalogs have always done far better than this though.  I’ve seen many cases of 2+%, and have heard of catalogs that ran in the 4-5% response rates.  Not surprisingly, the direct mail I do still get is largely made up of catalogs.