Direct Marketing in the Land of Oz
U.S. Direct Marketers Are Finding Success in Australia
By Lisa A. Yorgey
This year's Oscar race has been called an Australian invasion: Aussies were nominated in every award category.
Indeed, this former British penal colony has permeated American pop culture—from Animal Planet's "Crocodile Hunter" to Nicole Kidman in "Moulin Rouge."
Interest in the land down under, however, extends beyond the world of entertainment. With a largely English-speaking population of about 23 million and a well-developed list market, Australia is one of the few bright spots in the Pacific Rim for U.S.-based international direct marketers.
Direct marketing now represents half of all media spending in Australia. According to the Australian Direct Marketing Association (ADMA), some 6,500 consumer direct mail campaigns were recorded in 2001. In conjunction with this surge, ADMA reports the telemarketing industry is growing at a rate of 30 percent a year.
This increase in direct marketing activity, combined with a weak Australian dollar, has a "bounty of potential to offer international marketers," say sources at Action Mailing Lists, a division of the Australian-based international marketing group, Action Direct Marketing (ADM).
Creative, Down Under
ADM client services manager Abramo Ierardo points out, "Marketers have historically conducted testing in Australia direct from the United States, an approach that has typically produced lower response rates."
To improve on their success, Ierardo advises U.S. companies to consider their approach: "Australian consumers respond more favorably to mail that is culturally relevant or 'Australianized.'"
International direct marketers have proven more successful, says Ierardo, "if the copy includes local currency, local images, testimonials from local customers, local contact points and words spelled in [Anglican] English, rather than American, for example, 'colour' not 'color.'"
Mark Bridges, vice president of international services for NJ-based Mokrynski & Associates, which manages National Geographic's international list, concurs. He points out that Australia is "one of the handful of countries where there is sufficient availability of local lists to warrant their serious consideration.
"As with any local list market, we recommend that some localization of the offer is made to help make these lists work … a little will go a long way in increasing response," Bridges adds.
Agora's Aussie Style
Agora is one U.S. mailer that has found "going Aussie" greatly boosts response. The publisher has been mailing to Australia as part of its larger, multinational campaigns for some time; however, it didn't start mailing a package exclusively created for the local market until 1998.
Australia was an ideal market to test, because it was easy to modify the package for this English-language market, and the country has a well-developed list universe, says Stacy Berver, managing director of International Marketing Solutions (IMS), a division of Agora Inc.
What's more, in looking at its response by country breakdown, Agora could tell Australia already had a good overall response rate and had the potential to increase. Adopting a local approach also opened its list universe, because it could mail local lists that previously didn't work with pricing in U.S. dollars.
Prior to 1998, the control package for Agora's Health Sciences Institute newsletter was priced in U.S. dollars and used a U.S. return address on both the outbound and reply envelope.
The package was tested against another, with minor changes to the creative, but operationally exclusive for an Australian audience. The newsletter was priced in Australian dollars and used a local BRE and local fax number. Each mailing was a #10 package with a return envelope, eight-page letter, brochure and special alert letter.
The test package beat the control and more than doubled response. Berver says it currently mails this package as its control, and has contracted the services of a local call center to handle response generated by a local phone number it has since added to the mailing. The package mails from the States via the U.S. Postal Service's International Surface Airlift Service, although Berver says she plans to seriously explore direct injection as an alternative.
IMS mails offers to Australia for four of Agora's heath newsletters and four of its health book titles. After IMS built files of a few thousand names for each of these titles, it adopted a local approach for their respective renewal packages and insert advertising, and consequently saw another jump in response.
Agora continues to mail 40,000 to 70,000 pieces per title per quarter in the Australian market.
National Geographic's Premium Test
"Survivor II" and the 2000 summer Olympics in Sydney may have drawn the world's attention to this land of the kangaroo and koala, but Australia has proven a highly responsive market for the National Geographic Society for many years.
"Australia has always been one of our best markets, because it is a substantial market and is English-speaking," says Walt Terry, National Geographic's senior manager of international business development.
Unlike its other international mailings, the package National Geographic currently mails was both designed and tested in the Australian market, rather than adapted from a U.S. control. Its current acquisition package is a two-color A5 outer-envelope that uses more four-color pieces than other international mailings.
"The Australian market," says Terry, "thrives on color and pizazz." He explains that National Geographic can afford to use more four-color pieces in this market because it takes advantage of Australia's domestic postal rates by mailing within the country, rather than paying international rates to mail from the United States.
The cost of membership in the National Geographic Society is priced in Australian dollars, which is significantly lower in value than U.S. dollars. However, Terry says, the mailer recoups what it loses in revenue through savings on its promotions, which also are created and mailed in Australia.
According to Terry, Australia also is a market that responds well to premiums. Two years ago, the mailer began offering prospects entry to its sweepstakes and a chance to win a National Geographic expedition—a prize closely associated with its product. Recipients could enter the sweepstakes regardless if they ordered or not, but respondents received a free world map with their paid order. (The National Geographic Society successfully has used a world map as a premium for more than five years.)
This year, National Geographic tested a new premium—a branded briefcase with an embroidered logo. Terry says he chose this particular premium because the cost of the briefcase versus its perceived benefit was appealing.
Indeed, the test index was two times that of the control, and National Geographic saw an increase of 50 percent in response on the rollout.
"Being clever on the cost end has made [this premium] successful, otherwise it wouldn't have worked," says Terry, who explains that the briefcases are made in Hong Kong, and fulfillment is handled by a vendor in New Zealand. Regional fulfillment is not only more cost-effective and easier from a logistical standpoint, but it also results in better service levels.
The briefcase premium now is National Geographic's control in the Australian market. However, Terry says he is "keeping an ear to the ground," because there's a greater danger of fatigue with this premium. Should the briefcase lose its steam, Terry is prepared to reintroduce the world map premium.