Future Trends:

• Secondary information markets for Internet information will develop: Data collection on the Internet is going to become a big business. Since users do not like to give information multiple times, those businesses that are able to gather lots of information will be able to repackage that information to sell to other companies. These information companies will most likely not sell products. Instead, they will provide free information or services to the user in exchange for information. Why is this powerful? Direct marketers use predictive models that often make use of data sets that are not immediately relevant to a customer. For instance, a user may be mystified and suspicious about why a ski equipment company wants to know how many televisions you have in your home, but that variable may be an excellent predictor to place customers into a particular segment. A TV-guide-type site could easily gather that information about users and resell it to other marketers. Open Profiling Standards will facilitate this type of interaction.
• Internet sites will develop new, unique, and sophisticated ways to collect information: As Internet users become more sophisticated, Internet marketers will have to develop more clever ways to gather information from people. A leading firm in this area is Yoyodyne, which is pioneering a field called permission-based marketing, where users agree to provide information in return for joining a game with prizes, or receiving a serial story over e-mail. For instance, Yoyodyne implemented an e-mail serial story, called "Totally Tabitha" targeted at young women for Tambrands. With a response rate of 30%, this campaign helped Tambrands identify many Internet users in their target segment. In return, users received two installments of the story per week, as well as the chance to win prizes.
• Hybrid models will precede full Internet direct marketing: Direct marketer’s appetite for using the Internet will outpace the development of technology. Therefore, expect to see more hybrid direct marketing models that make partial use of the Internet to target and sell to customers. What is a hybrid direct marketing model? Imagine that you are browsing a company’s web catalog and see a specialized product that might interest you. There is a button that says, "Click here to be contacted immediately by a sales representative." You click the button, and a message pops up that says, "You will be contacted by a sales rep in the next 30 minutes. Thank you for your interest," and a sales rep who is knowledgeable in that particular product calls you fifteen minutes later. This is just one potential application of combining the Internet with other direct marketing channels.
• Agent technology will turn the direct marketing paradigm on its head: Throughout this paper, we have used a traditional direct marketing framework to assess Internet opportunities. In that model, vendors target a particular type of customer, design a custom offer, and contact the customer through the most appropriate channel. The development of client-based agents holds the possibility of reversing that paradigm, and therefore giving significantly more power to the customer. With a client-based agent, a user could specify what they are looking for, and have their agent go out and search for offers that meet that specification. In such a scenario, the customer has designed their own offer, and the vendor must start to think about how well their business, or their site, will respond to the various offers that customers are creating. Thus, one-to-one customization will come from customers defining their own offers, truly turning the direct marketing paradigm on its head.

Conclusion:

The application of direct marketing models using the new customization and delivery technologies of the Internet will be one of the major opportunities for electronic commerce in the next ten years. The ability to deliver customized offers will create a new value proposition for the customer that will make the Internet the marketplace of choice for many. However, significant psychological and technical barriers still need to overcome, especially in the areas of data collection and analysis. However, the size of the opportunity will create enough impetus for innovation to overcome these barriers that the Internet will become a major tool and channel for direct and targeted marketing.

"Direct Marketing on the Internet", by Matsuda, Rosenstein, Scovitch, and Takamura

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