When Alan Hall started in the direct-marketing industry 20 years ago, Facebook and Twitter didn’t exist. But today, he’s head of a firm that specializes in serving non-profit clients, and digital marketing dictates the way he does business.
He was recently promoted to chief executive of Pasadena direct-marketing company Russ Reid. And thanks to a recent merger with an East Coast shop, SCA Direct in Fairfax, Va., it’s now the nation’s largest direct-response firm specializing in non-profits. Clients include World Vision International, American Cancer Society and American Red Cross.
In the past, it was enough for those clients to buy TV time that asked viewers to dial a 1-800 number on the screen. In the digital age, however, direct marketing for such organizations requires new strategies. For example, its client Los Angeles Mission on Skid Row used a Facebook campaign to encourage donors to contribute to an Easter drive.
The value of the merger wasn’t disclosed, but it means Hall will be bringing that sort of innovation to companies on the East Coast.
“It’s a combination of the experience (SCA Direct) has on the analytic side and the data driven side – combining that with the multimedia channels we work with,” Hall said. “It’s using the marketing channels that the consumer advertiser uses, but to help a non-profit accomplish their mission.”
Russ Reid and SCA Direct will have a combined staff of 300 in offices in Pasadena, Fairfax and Toronto, with more than 200 non-profits as clients. The merged company will retain the name Russ Reid.
The company was founded in 1964 by its namesake, who retired in 2001. It offers services such as direct-mail campaigns, direct-response television, paid online searches, online display advertising and email marketing in English, Spanish and French. Russ Reid charges clients for campaigns and then gets a commission on any ad time bought by clients.
Scott VanderLey, vice president of digital marketing at Russ Reid, said the challenge is to find the right pace for non-profits to incorporate a bigger digital strategy, in addition to direct-mail campaigns and TV ads.
“There are some who want to spend as much as possible on the known quantity, which is direct mail, and there are some people who want to move so aggressively into digital they’re actually getting in front of the curve,” VanderLey said. “I think it’s more common that people are a little more hesitant to move into (digital), an area where they’re not as familiar.”
Needed to expand
Herb Smith, the mission’s chief executive, said he has seen the number of donations through direct mail decline in the last 10 years.
“The Los Angeles Mission really founded its fundraising programs on direct mail and ads in the newspaper,” Smith said. “As time went on, we needed to expand that. Direct mail is still the backbone of our fundraising, but it is definitely something that we know will go away or significantly decrease in the future.”
The mission has diversified its fundraising such as using social media to drive gift donations for a “chocolate bunny drive” for its Easter baskets. Russ Reid promoted the drive on Facebook.
Donors could go to the mission’s website, order a chocolate bunny and have it shipped to the mission. About 600 chocolate bunnies were donated for needy families.
While the volume of online donations is still lower than direct mail, Smith said direct-mail donations average $35 and online donations average $75 a person.
Industrywide, direct-marketing billings for 2012 were an estimated $5.5 billion compared with $5 billion in 2011, according to a survey by Response, a magazine published by the Direct Response Marketing Alliance in Santa Ana.
Daniel Casey is general manager and executive vice president of sales at WorldLink on the Miracle Mile, a direct-response advertising company with clients such as Fox Broadcasting, Comcast and MGM Television.
He said that direct marketing has always had an element of building brand awareness. That’s to say, even if no one buys immediately, they have heard the message and might become customers in the future. But digital direct-marketing campaigns such as the mission’s Facebook fundraiser pose special challenges, he said.
It’s one thing to expose more people to the campaign and build brand awareness and another to get them to click and give. Clients and marketers care about revenue more than brand awareness.
“With direct response, it’s what happened after they spent the money,” Casey said. “Regardless of the size of the media, did it generate sales? They’re not looking at Nielsen ratings. It’s irrelevant to what their business is about.”
