Target marketing is a precise form of communication, aiming messages at small, clearly-defined market segments or even individual prospects. Mass marketing delivers generic messages to large, relatively undefined markets, relying on economies of scale to justify expenditure. Figures from the Direct Marketing Association indicate a long-term trend away from general to direct targeting. In 2009, direct marketing captured 53 percent of total advertising expenditure, according to Jim Hackett, president of communications consultancy Indivia Inc., in “The Future of One-to-One Marketing.”
Mass marketing is associated with high-volume consumer products advertised on commercial television or in newspapers with large circulations. Advertisers and their agencies aim to reach the largest possible market at the lowest cost per thousand. The campaigns require large media budgets, although it has traditionally proved difficult to measure the effectiveness of that type of advertising expenditure.
Difficult economic conditions have accelerated the demand for greater accountability in marketing budgets. A survey of chief marketing officers by the CMO Council indicated that investing in digital demand generation and online relationship building ranked among the top initiatives being taken to maximize the impact and value of marketing in 2010.
The development of data collection and mining technology supports greater precision in target marketing. Organizations use detailed information they collect to develop marketing messages that reflect the specific needs of small groups or individuals. An article in “Social Times,” One-to-One Marketing, Social Media and Millennials, by Neil Glassman described the potential for precision. A colleague had used Twitter to express how she was having a bad day. A snack food manufacturer picked up the Tweet and responded, later delivering sample products.
Jim Hackett's article, "The Future of One-to-One Marketing," describes the emergence of a new target marketing term, B21. This is marketing communication delivered to an individual, where words and images are personalized to the recipient. The level of precision is now extremely high, particularly in online media. The website Webvertization.com reported how changing one letter in a keyword phrase from piano lesson to piano lessons improved conversion rates from 1.64 to 5.09 percent.
Target marketing is effective at building long-term relationships with customers. An article in “Managing Change," One-to-One Marketing; Much more than Relationship Marketing, describes how organizations engage customers in dialogue, building trust and gathering information on their needs. Organizations use that information to provide superior service and products that meet customers’ needs precisely. This strengthens the relationship in a way that competitors would find difficult to match.