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Direct Marketing
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Direct Marketing: What It Is and How It Works
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# Direct Marketing: What It Is and How It Works

By

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School for Social Research and Doctor of Philosophy in English literature from NYU.

Updated August 22, 2024

Reviewed by

Reviewed byDavid Kindness

David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning. David has helped thousands of clients improve their accounting and financial systems, create budgets, and minimize their taxes.

Fact checked by

Fact checked byYarilet Perez

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

Definition

Direct marketing is reaching out to individual consumers about buying products or services without using a third party.

## What Is Direct Marketing?

Direct marketing consists of any marketing that relies on direct communication or distribution to individual consumers rather than through a third party such as mass media. Mail, email, social media, and texting campaigns are among the delivery systems used. It is called direct marketing because it generally eliminates the middleman, such as advertising media.

### Key Takeaways

- Direct marketing is marketing that relies on direct communication or distribution to individual consumers rather than through a third party.
- Mail, email, social media, and texting campaigns are among the delivery systems used.
- The call to action is a common factor in much of direct marketing.
- The most effective direct marketing campaigns use lists of targeted prospects.
- The effectiveness of direct marketing is easier to measure than media advertising.

Investopedia / Daniel Fishel

## How Direct Marketing Works

Unlike traditional public relations campaigns pushed out through a third party such as media publications or mass media, direct marketing campaigns directly communicate with target audiences.

In direct marketing, companies deliver their messaging and sales pitches by social media, email, mail, phone/SMS, and door-to-door visits. Although the number of communications sent can be massive, direct marketing often attempts to personalize the message by inserting the recipient's name or city in a prominent place to increase engagement.

The call to action is an essential part of direct marketing. The recipient of the message is urged to immediately respond by calling a toll-free phone number, sending in a reply card, or clicking on a link in a social media or email promotion. Any response is a positive indicator of a prospective purchaser. This variety of direct marketing is often called direct response marketing.

## Targeting in Direct Marketing

A direct marketing pitch that is delivered to the widest possible audience is probably the least effective. With that strategy, the company may gain a few customers while annoying all of the other recipients. Junk mail, spam email, and texting all are forms of direct marketing that many people can't get rid of fast enough.

The most effective direct marketing campaigns use lists of targeted prospects in order to send their messages only to the likeliest prospects. For example, the lists might target families who have recently had a baby, new homeowners, or recent retirees with products or services that they are most likely to need.

Catalogs are the oldest form of direct marketing, with a history that dates back to the latter half of the 19th century. In modern times, catalogs are usually sent only to consumers who have indicated an interest in a previous purchase of a similar product.

Today, a lot of direct marketing takes place on the internet. Platforms of choice include social media and email.

Social media has emerged as the most modern form of direct marketing. Targeting strategies can also be used on social media when putting out ads; platforms like Facebook allow brands to choose the age, gender, demographics, and even interests of potential new audiences that an ad could reach.

Many companies engage in opt-in or permission marketing, which limits their mailing or emailing to people who have indicated a willingness to receive it. Lists of opt-in subscribers are particularly valuable as they indicate a real interest in the products or services being advertised.

## The Advantages and Disadvantages of Direct Marketing

Direct marketing is one of the most popular and effective marketing tools to establish a direct connection with a target audience. Direct marketing has its appeal, particularly to companies on a shoestring budget who can't afford to pay for television or internet advertising campaigns. As the world becomes increasingly connected through digital platforms, social media becomes an effective way to market to customers.

The main drawback with direct marketing is the profile-raising and image-building that comes with a third party accrediting your brand. A sponsored article, say, in The New York Times can cost a lot of money. However, the visibility is huge and it can greatly enhance a brand's image and help "seal the deal" with customers, who are willing to trust a supposedly unbiased source or external opinion.

By its nature, the effectiveness of a direct marketing campaign is easier to measure than other types of advertising, since brands can analyze their own analytics, track unique source codes, and tweak strategies effectively without going through a middleman. The company can measure its success by how many consumers make the call, return the card, use the coupon, or click on the link.

## Which Is an Example of Direct Marketing?

An example of direct marketing is a company sending promotional emails about its products or services directly to potential customers. Most companies periodically reach out to consumers who agreed to receive communications in a bid to sell them something. The email may flag a special offer, new product range, or the fact the company sells something that is currently popular or in season.

## What Is Direct and Indirect Marketing?

Direct marketing involves explicitly trying to sell goods or services to customers. Indirect marketing, on the other hand, is marketing without trying to sell a specific product or service. An example of indirect marketing is writing and sharing a blog post or newsletter.

## What Is the Aim of Direct Marketing?

The aim of direct marketing is to boost awareness and sales. If successful, the communication will familiarize the consumer with the company and tempt them to make a purchase and tell others about it.

## The Bottom Line

Marketing strategies are often broken down into types. One of these types is direct marketing, which, as the name implies, involves advertising straight to the consumer rather than through a third party such as the media. Methods of communication include email, social media, mail, phone calls, text messages, and knocking on doors, and the most effective campaigns are based on targeting people who have previously expressed an interest or who match the targeted demographic.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our
editorial policy.

Related Terms

Hard sell is an advertising or sales approach that features especially direct and insistent language. The pressure of a hard sell can offend or drive away customers.

Volume discounts are financial incentives for individuals or businesses that purchase goods in multiple units or in large quantities.

Viral marketing seeks to spread information about a product or service from person to person by word of mouth or sharing via the Internet or email.

Network marketing is a business model that generates sales through independent representatives.

Guerrilla marketing is when a brand or business uses unexpected marketing and promotional techniques.

A lobby is a group of like-minded people banded together to influence an authoritative body, or the act of exerting that influence to serve own interests.

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