What is Video Direct Marketing?

Video Direct Marketing (v-dm) is the process of sending flat screen video advertising to prospective customers directly in the post. When the recipient opens the envelope a high-resolution LCD screen embedded within the card plays out a live video advertisement.

This is the latest innovation in advertising, merging above the line TV advertising with below the line direct mail and it represents a paradigm shift in the way companies market their products and services. Where e-dm (electronic direct mail) concerns itself with a “scatter gun” approach - mass marketing with increasingly low customer interest and open rates, v-dm (video direct marketing) uses carefully targeted customer profiling techniques with low volumes - and exceptionally high customer interest.

The shift has come about because of the fragmentation of media and the changes in the way that people consume media that have taken place in the last decade.

Where previously advertisers could probably catch a fair slice of their target audience with a few carefully chosen slots on the TV networks, now there are hundreds of TV channels to choose from, and then of course the internet, which today has quickly overtaken TV in percentage share of people’s media time.

Whilst TV is undoubtedly still the most potent form of media, advertisers are now looking at ways to ensure that the high production costs of TV commercials are maximized and by combining the most powerful form of media (TV advertising) with the most targeted form of marketing (direct mail) advertisers can pick and choose their prospective customers and “take the water to the horse” by sending each individual a video copy of their advert directly in the post. This guarantees the highest response rates to their advertising.

Where companies have related products or services, they are able to make this media very cost effective. For example, a credit card company which has a target audience of 10,000 customers who have all be pre-qualified as eligible for a particular card, sends out a video direct mail to the customers which advertises not only the card itself, but also the types of things that a customer’s might wish to purchase, a holiday, white goods, electronics etc., all of which will earn additional credit card points if purchased using the card. This is just one example of how multiple vendors work together to profile and target customers while sharing the cost of the delivery mechanism

Whilst it is accepted to be a highly potent media, the costs of v-dm are high in comparison to e-dm and therefore it is important to measure the effectiveness of this media in terms of Return on Investment.

Generally speaking, companies who use e-dm find a response rate of 1-2%. That is around 98 out of 100 people not responding to the email.

Companies who carry out customer profiling methodology and use carefully targeting mailings can expect a higher response rate, but response rates rarely rise above 5%. That is around 95 out of 100 people not responding.

By contrast a test mailing carried out by Blackscreen Media Dubai to a random sample base of 100 people produced a response rate of 48% which rose to 76% with follow up calls to those non-responders. Whilst this is only a small sample, Blackscreen Media reports that of its current client base, all have expressed an interest in re-orders, with many companies ordering now in several multiples of their first order. This would seem to indicate the effectiveness of the medium in addition to the existing statistical data.

An interesting further aspect of v-dm, which may outweigh even it’s immediate effectiveness, is that it is also extremely viral – recipients want to show off this new innovation, which in turn spreads awareness of the advertisement to among their social network and beyond.

A UK based company, Vidioh!, reports client observations that many respondents have been as interested in this new technology as the product or service being offered by the advertisers. This is seen as an additional benefit, creating a dialogue between the advertisers and their target audience, which, in a world a digital noise, is seen as vital for any advertiser that wishes to stand out and have their message heard by the prospective customer.

V-dm is also exceptionally “sticky”, as customers can also re-use the video cards and even load additional video content directly from a PC or Mac, they retain the cards, in turn continually advertising the companies branding and own video advertisement.

Vidioh! also reports another interesting aspect of this new form of marketing; it requires very low minimum run rate to make it effective. With a cost per card in the region of $50, companies can send out 200 – 300 cards (and outlay of $10 -$15,000) and expect a response rate of 40% - 60%; which means 80 to 180 new customers.

Prospective customers who respond are also more aware of the product or service being offered, both because video tends to be more easily absorbed than print and because customers tend to watch the advertisement more than once due to the innovative nature of the medium. A trend that has been also recognized from the early stages of product videos online is that customers are less likely to return products having viewed a video demonstration.

Initial interest in the video media cards has been from technology and events companies.

HP, one of the world’s largest technology companies, recently used video cards provided by Blackscreen Media for the worldwide press launch of a new 3D printer in Dubai at the end of February 2012 and has subsequently placed eight new orders for video cards across several divisions of the company.

Xerox Emirates recently used video cards for an event to showcase the company’s new Managed Print Services offering, while The Queen Elizabeth 2 (QE2), the ocean liner now now stationed in Dubai, send out video cards to VIP guests as a keepsake with a video for those attending the New Year’s party on board.

The mail video advertisements come in MP4 or AVI format and the video auto-starts when the card is opened. Manual control buttons can be positioned under the display which allow for the playing of multiple videos.

The high resolution, 16:9 aspect LCD display is powered by a custom board with built-in storage for about 30 minutes of video footage. There's an included speaker, and the Li-ion battery is fully rechargeable via the included USB port.

If required, battery capacity can be increased to up to 7.5 hours and onboard storage boosted up to 4GB – which is enough for 8 hours of video.