The deal space today is a direct marketing machine. That’s part of its problem and yet one of the reasons I love it so. The get email send offers has been referred to as the blunt instrument approach, so it will need to be fine tuned if it is to continue. Otherwise, it will turn into the yellow pages business — big but dying.

All of local advertising looks to drive people in stores. Discounting isn’t new. Local coupons aren’t new. Using the web to drive a local merchant thousands of customers on a performance basis is new. The scale and speed with which Groupon and now LivingSocial have achieved this warrants the attention the space has received.

As Jim Moran of Yipit told me, national brands may leverage the space, but influencing local dollars is what has people up at night. It’s why Online to Offline or O2O as Alex Rampell coined is, if not a trillion dollar industry, a multi-billion dollar one.

ROI

Here is what the big guys all get. Namely, that if they take a dollar out of a merchant’s pocket and don’t give them back $1+ back, they will fail in the long-term. This is where we are today. You can’t get merchants to spend more than a billion dollars with limited accountability and not have quesitons raised.

But, as a deal’s business, do you wait for the merchant’s level of sophistication to increase before taking their money, or do you take their money and try to balance their needs and your own?Google is a case study in the latter. If they let only savvy marketers spend money so that no one could lose money, they wouldn’t be where they are today.

If a company is taking advantage of merchants and/or creating a system where that is possible, that is unacceptable. But, it would not be unsurprising to hear of examples in our revenue driven world.

The Future of The Deal Space

The deal space is really a collection of spaces. It started with the just the web, or more specifically email. It was and still is primarily a broadcast approach with little targeting or specificity. Were it start any other way, though, we wouldn’t see such scale in one particular company.

The web deal space will be like search, dominated by a handful of players. Groupon and LivingSocial will stay the winners, but how large will they be of the total market when it continues to expand is up for the debate. A friend told me about a conversation he overheard where one executive outside the deal space predicted Groupon would be the MySpace of the sector. It’s not that the sector is all bad only that certain tactics are not sustainable.

Mobile, other connected devices, and unexplored touch points are  going to be different. As an example, Groupon’s email list and sales force don’t make it an odds on favorite to win mobile.

They are also why a company like American Express can so quickly and easily disrupt the ecosystem if they really chose to do so. I wish I could recall which executive I spoke to in order to give him credit, but he explained that mobile will not be a winner take all or most environment.

In mobile, we will see many niche apps becoming meaningful players. People aren’t necessarily looking for deals when on their phone. They are doing other behaviors that enable the showcasing of deals. It is why Foursquare and Twitter are (still) meaningful, and it’s also why Google should become the leader in this space.

Innovations in customer acquisition. That’s where the deal space falls. It’s not about daily, and it’s not about deals. It’s about connecting buyers and sellers in ways that leverage connected devices to create scale.

Cross-published at jayweintraub.com. LeadsCon East will take place at the Hilton New York from August 24-25 — register here. Daily Deal Summit West will be held September 22-23 in San Francisco — register here.

Hyperlocal pay-per-call specialist ZipLocal expanded its online and mobile LocaLeads network to a network of print publishers in more that 1,000 markets nationwide.

Wondering how Keynote Systems monitors and optimizes performance of web properties? Well, they made a handy-dandy video to answer your questions.

Need some extra SEM or SEO manpower but you’re lacking in budget? Recently launched outsourcing solution TeamLauncher might have a solution for you.

Take a taste of Google Display Network Reserve — it’s that premium inventory on a guaranteed basis that display advertisers have been craving.

The Federal Trade Commission has had enough of these snake-oil — I mean acai-berry Internet hucksters. On Tuesday the agency will announce lawsuits against third-party Internet affiliate marketers of acai berry weight-loss pills.

Integrated device recognition tools, which are updated as new devices enter the mobile sphere, optimize web content and emails for both visitors and subscribers. In addition, the recognition technology is used to give device details within analytics reports.

The updated software allows users to insert content not hosted in Concentri’s content management system into email, web and mobile direct marketing campaigns. Concentri also facilitates the building of device-specificmobile websites and email templates while now tracking real-time SMS conversations between consumers and brands in its mobile analytics.

The first group consists of data points that are clearly communicated by the customer, such as enterprise customer data, past purchase history, customer preferences and survey responses.

The second group is a collection of behavioral attributes like organic and paid search activity, online advertising participation, and any website, mobile or email marketing activity. Those representative examples are really just the tip of the iceberg, too.

As a result of an abundance of data, marketers are now faced with the opposite problem. With so many marketing data sources, how can all of the data be organized and leveraged for direct digital marketing?

Effective direct digital marketing — personalized and targeted marketing communications that are addressed to specific recipients and delivered through the email, Web, and mobile channels — can only happen with proper data management. But, the more data sources, the easier it is to drown in data because of an inability to properly organize it.

Some statistics reveal that more than 50% of marketers are unable to properly segment and target content to customers using customer data. That figure is not much of a surprise, however, given the natural transference of traditional direct marketing thinking to modern digital channels. Marketers still take a list-centered approach to segmentation, but a list-first approach hinders successful direct digital marketing.

Fortunately a new approach to data management exists that not only consolidates disparate data resources but also views customers not from the list down, but from the profile up. The result is better content targeting and the ability to coordinate consistent communications across each of the vital direct digital marketing channels. The approach is facilitated by a universal profile management system.

A universal profile management system harnesses a customer-centric marketing philosophy by enabling marketers to build segments that center on commonly shared traits. Rather than focusing on customers that share a single (often common) trait with a list, a universal profile management system lets marketers identify several important customer characteristics at the individual profile level, then build a segment accordingly.

For example, if one customer is on five separate lists, it is difficult to find the common traits and coordinate the marketing messages. Therefore, one customer can easily receive five different messages from the same company. Communications may be superficially relevant to the recipient from the marketer’s perspective, but the lack of coordination ultimately undermines those efforts.

The above example demonstrates how marketers must adjust their thinking from lists to profiles. A customer should have one profile that contains each of the five traits that define them. Eliminating a trait, or failing to take one into account, compromises message relevance and is a major blow to the development of a long-term, profitable relationship with a customer. Instead of beginning the planning process by identifying what lists are owned, begin by identifying the key attributes customers share.

There are many bits of data, including all behavioral data, that simply do not fit into a list-first approach to data. For example, a consumer hitting a website off a particular keyword search does not fit into a preexisting list.

Does that mean that a website visitor should fall through the cracks and not receive targeted messaging? No. Efficient marketers search for every opportunity to get a conversion. Millions of conversions are missed every day simply by marketers taking a traditional, list-first approach to data.

The ease and flexibility of universal profile management — especially when the system is housed in the same software that delivers the messages — unlocks the practical value of collecting explicit and behavioral marketing data.

Data only holds value for marketers when it is put to good use. If improving marketing communications — and all of the imperative metrics that accompany success — is important, a new, more organized approach to data management is vital.

A universal profile management system lets marketers organize all of their data and put the focus squarely on the customer — and reap the financial rewards of improved message relevance and increased customer loyalty.

The latest essential truth is that consumers demand – and respond to – marketing message relevance. The disconnect between consumer demand for relevance and the ability of the marketer to supply it has resulted in missed opportunities and lost revenue for countless businesses. Historically, marketers have struggled to quantify the real return on investment a relevance-centered approach offers, which is precisely why the emerging philosophy of Direct Digital Marketing is so important.

The Definition of Direct Digital Marketing

Direct Digital Marketing is comprised of three basic message delivery channels: email, the Web, and the mobile phone. Addressability is the common link that ties these channels together. Like direct marketing uses the postal address, every online consumer has an email address (obviously, the email channel), a browser cookie (the Web channel), and/or a mobile phone number (obviously, the mobile channel). Addressability is the elemental concept that fuels and measures Direct Digital Marketing success.

Direct Digital Marketing success is defined differently by its two primary audiences, the consumer and the marketer. If the consumer shares their three digital addresses with the marketer, it is reasonable for the consumer to expect any communication through these channels to be relevant to them. The savvier the consumer is online, the higher the expectation for relevance – and the higher the frustration with a message that is not relevant. For the direct digital marketer, message relevance is more than just securing the opt-in and assuming the consumer wants to hear what they have to say. It is a dedication to understanding the consumer and applying that ever-changing knowledge to enhance the personal experience with the brand – and ultimately to convince them to buy.

The effectiveness of a relevant approach to marketing communications through addressable digital channels is statistically proven. Therefore, it seems practical to assume that Direct Digital Marketing has been adopted en masse; however, some basic barriers to adoption persist. The biggest challenge direct digital marketers must overcome is the digital marketing ecosystem. The email, Web, and mobile channels have the addresses necessary to deliver direct, truly relevant, digital marketing communications. However, message delivery historically comes from disparate systems that draw on disparate marketing databases.

The modern digital marketer likely has a database to contain customer information gathered off-line, a different database to contain CRM data or purchase history data, and yet another database to capture and store the website behavioral data of their customers and prospects – and that example only covers the database ecosystem. The digital marketing channel ecosystem is a mirror image of its database counterpart, with one software platform needed to execute email marketing, another to host and create compelling offers on landing pages and the website, and yet another to conduct any mobile campaigns (for those adventurous enough to dip their toes in this promising water).

The Tools to Execute Direct Digital Marketing

It may sound challenging, but being good at Direct Digital Marketing is possible. The first requirement is having a single database that is capable of storing all of the data necessary to execute a Direct Digital Marketing campaign. For example, bringing email data, website data, mobile data, and purchase history data together into one repository unlocks useful, previously unattainable segments. Additionally, new opportunities for better personalization and relevance become easy.

The second requirement for is the ability to easily leverage that motley collection of data by sending a marketing communication with a targeted call-to-action. The centralized database is only a benefit if it can be easily used to send relevant information and offers to a customer or prospect through any of the primary Direct Digital Marketing channels.

The third requirement for good Direct Digital Marketing is having all communications tested and optimized. Good testing and optimization tools help reinforce the relevance of the message. Gathering important preference information from a previous online purchase, like an effective email subject line or a “buy now” button color, helps bring the relevance down to a very personal level.
The concept of Direct Digital Marketing is just starting to gain momentum.

The vendor landscape will eventually become crowded with companies that each have different perspectives and methods of execution. Understanding this fundamental approach – and how it impacts online marketing communications – is essential for marketers to remain relevant with the ever-changing personality of the modern consumer.

Kate Burns is joining Bebo as European vice president and managing director (the hire is close on the heels of Bebo’s president Joanna Shields’ promo to president of AOL’s People Networks). Burns hails from Dailymotion, which she joined just four months ago.

Adap.tv, creators of OneSource, a platform that helps publishers monetize online video content, has hired Dakota Sullivan as its vice president, marketing and product. She will run the company’s global marketing communications and product strategies. Previously, Sullivan was chief marketing officer at BlueLithium.

MIVA Direct, the homepage, toolbar and content arm of digital media company MIVA, has appointed Mark Ribaudo as vice president of direct marketing. He will be responsible for direct marketing and advertising across MIVA Direct’s portfolio of toolbars, homepages and destination sites. Ribaudo joins the company from Scholastic, where he was group director of Internet marketing.

The Internet will bump up from number 5 to the number 2 medium in 5 years. It will be second only to direct marketing claims the research. Video advertising will be the main disruptor of online advertising over the next five years by attracting the most ne marketing dollars. Its revenue will grow sevenfold from $0.5 billion in 2007 to $3.8 billion in 2012 at a CAGR of 49.4%.

“The size of the online video audience as well as the time it spends watching video is sure to increase as broadband access penetration increases, connections become faster, and as more premium content is available,” said Karsten Weide, program director, Digital Media and Entertainment. “What will also drive this trend is that consumers are starting to realize that, as opposed to TV, Internet video lets them watch what they want, when they want, and increasingly also where they want.”