The much celebrated blurring of above and below-the-line disciplines may be underway, but most would agree they still make slightly uncomfortable bedfellows. Both are all too aware of the limitations of the other. DM has traditionally defined itself too narrowly by response, while ad agencies have been obsessed with the brand, to the detriment of response.
Broadly speaking, direct marketing is very good at understanding 'what' happens (fuelled by increasingly sophisticated databases), while ATL is very good at understanding 'why' it happens (fuelled by long-established planning departments and well developed research techniques).
Indeed, some would argue that market research has been remarkable by its absence in the direct mail space. Surely the marriage of market research to traditional direct marketing should result in a complete view of the customer that neither discipline could achieve on its own. But it isn't quite as simple as that, as Ian Robinson, founding director of insight@tmw, points out.
"While the power of bringing together informed behaviour/transactional analysis and market research is indisputable, it happens all too rarely," he says. "The main reason is that market research has been the preserve of ATL planning and not BTL data planning. In fact, coneheads are genuinely perceived to be at the other end of the spectrum, compared with fluffy researchers involving themselves with issues of the consumer psyche."
But there's some evidence that these two disparate worlds are starting to come together. Dunnhumby was one of the first companies to plug the gap back in 1998, when it set up a joint venture with the British Market Research Bureau (BMRB) called First T. Working with companies with databases of more than one million records, it matches this data against that of BMRB's Target Group Index Survey (TGI), which contains detailed questionnaires completed by around 25,000 adults each year.
Rounding out prospects
Where there's a match, extra insight into the individual - such as media consumption, attitudes, influences and purchasing patterns - can be gleaned and then modelled across the database.
"You may think you have a good customer for your supermarket because your database says he spends an average of £50 a week with you," says First T managing director Jane Derry. "But if the research is added in, you might find that he's also spending £70 with a rival. You then have a chance to find a way to attract his attention and may know that he's likely to be attracted by special offers or vouchers."
Market research giant MORI has also sought to bridge the gap between the worlds of market research and direct marketing with its survey called MFS (MORI Financial Surveys). This is completed by 48,000 people a year and is used by the major financial services companies to append additional customer insight to existing databases.
But effective though these two initiatives may be, that's not to say that the challenge has been cracked. Both are dependent on the client having a sizable database to ensure a high enough 'hit' rate and both rely on modelling those matches across the whole database. That's where the flaws can start to show, says Mark Leversedge, managing partner at BTL agency Elvis.
He's an advocate of attitudinal research but adds: "There's a limit to the amount of data you can collect and the number of people you can collect it from. So there's a degree of assumption and therefore inaccuracy in applying the model."
Limited research pool
It's a problem Peter Mouncey, head of research at the Institute of Direct Marketing and former head of CRM at the AA, is all too familiar with.
Market research is typically conducted across a relatively limited number of people.
"The average is a few thousand records, so the question is, how can that add any real value to a customer database?" he asks.
The Data Protection Act (DPA) can also make life difficult, adds Mouncey: "If the purpose of the data collection is for anonymous market research, there's no way you can use it at a personal level for marketing purposes."
There's no doubt that while the theory of overlaying research data onto databases is faultless, the reality is slightly more complicated. And this leads Andy Wood, managing director of database marketing company Total DM, to question whether it's really worth the effort. "The most important bedrock is the transactional side. Market research is useful but it's only the mental picture stuff," he says.
Wood cites the example of a supermarket brand that boasts a wealth of customer insight through its loyalty card. "If someone is spending £50 per visit, my job is to get them up to £70. I'm managing the customer and the revenue that customer represents. I can do that without knowing the why."
Wood stresses that he's not dismissing the importance of understanding what attitudes lie behind purchasing patterns, but reiterates the earlier point of "how this can be applied in practical terms to database-driven campaigns".
The answer is that in terms of applying that knowledge on an individual basis across a database, market research data probably is limited. But in terms of influencing the tone of the copy or the creative treatment, or broader strategic decisions about product development or customer satisfaction, market research has a very valuable role to play indeed.
Moving the industry on
And few could argue with the fact that DM still needs to work harder to get under the skin of the consumer in a way that lifestyle or geodemographic classifications will never be able to do.
"There's growing acceptance that the bigger picture needs to be looked at," asserts Karen Enver, head of planning at Draft London. "DM agencies with account planning functions are generally leading this process - those still flogging mechanistic behavioural models will lose out."
It's a challenge DM is all too familiar with. Just because Mr X lives next door to Mr Y and has the same household composition, income bracket and general lifestyle, that doesn't mean he'll necessarily shop at the same supermarket, have the same holiday preferences or drive the same car.
At last year's Data 2003 Conference, hosted by Marketing Direct, keynote speaker Stuart Pearson, chief executive of Wunderman EMEA, spoke about the coming together of different data sets to produce a more robust and enriched picture of consumers. He is involved in a project exploring exactly that, drawing upon WPP's experience both in market research and direct marketing, and passionately believes that "the value of data has come centre stage", but that no industry sector - be it advertising, direct marketing, or market research - should work in isolation.
Perhaps the days of 'coneheads' and 'fluffy researchers' at opposite ends of the spectrum are finally numbered.
TREE: GETTING THE BEST OF BOTH WORLDS
"A market researcher could talk to me and a data analyst could look at me on a database and they'd tell me two very different things," says Steve Mattey, managing partner at customer insight firm Tree. "They're both valid approaches, but have different strengths."
Tree is committed to drawing together the best of both these worlds to create a clearer picture of what makes a client's customer tick. Its method is based upon asking 'golden questions' that Mattey claims can unlock the door to understanding someone's attitudes.
The company uses a host of methods to ask these questions - ranging from email and direct mail to the phone and internet - and then models the responses back across the client database.
For Archibald Ingall Stretton client Skoda, Tree mailed between 5,000 and 10,000 existing customers a questionnaire that included attitudinal questions and contextual questions such as age. The latter acted as a bridge, enabling Tree to model the responses back against the whole customer database.
The 'golden questions' included psychometric and neuro-linguistic programming questions - both of which are designed to establish how you take information in and process it.
Mattey says responses to simple questions such as 'It's important how people think of me' or 'Friends and family are important to me', can give you important clues about how to communicate with that type of person in an appropriate way.
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