Industry News

Who your clients are:
Microzip: We do a lot of work for fundraisers. We have found that the fundraisers do a lot of the merge/ purge, meaning they rent a lot of lists for prospecting. They have to do that in order to grow their lists more and more. In the past, I think some of the fundraisers have had some bad experiences with mailing houses in terms of data processing because it's quite involved. There's a lot of different stuff going on and the mailing houses either merge on the wrong list or don't do the purge properly so they have duplicates left over or God knows what.

J.R. Direct Response: We work with a fair amount of non-profits, to varying degrees. We work with some self-help type of mailers, people that are providing books or programs on bettering yourself. We deal with a few mailers in terms of opportunity seeking. And, then on our list side we have a vast array of other clients as well, just looking to source files for their clients."

Who we met with:
	J.R. Direct Response International Inc. www.jrdirect.com Kris Gibson, Consulting Manager for J.R. Direct Response International Inc. "JR Direct has been servicing the direct marketing industry for over 20 years and our particular niche is taking mailers into international markets," says Kris Gibson, Consulting Manager for J.R. Direct Response International Inc. "Our primary focus has always been direct mail, and in particular taking our clients to more challenging markets, like non-English speaking markets that they might not have experience in, or need some special expertise in. "We do data processing, merge/purge database management, cleansing global address correction validation on the data side. We procure lists and source new lists for mailers in the international market. And then, of course, we do consulting. We provide overall program management consulting for different clients, and copywriting as well."
	Kirk Marketing www.kirkmarketing.com James Hvezda, Marketing & Communications Manager for Kirk Marketing. "Quite simply, we are a data-driven direct marketing operation," says James Hvezda, Marketing & Communications Manager for Kirk Marketing. "We create, plan, and execute campaigns, based on key insights gathered from our client's data. "We continue down the road of doing more data work up front, and gathering those insights before going into production, before developing a strategy. That's what makes us unique in the marketplace."
	Honeycomb Direct Mail www.honeycomb-direct-mail.com Nathan McHugh, Director, Business Development for Honeycomb Direct Mail Inc. "We're a small but very capable direct mail company," says Nathan McHugh, Director, Business Development for Honeycomb Direct Mail Inc. "We deal with a varying variety of customers from business-to-business, business-to-consumer, non-profit, and publishers as well. "We have all the capabilities of the larger [data, print and mail processing companies], but we can be very responsive to customers and work with them. You know, not force them into a mould, but make sure they're getting the best out of what they're doing, by having that flexibility."
	Lux Insights www.luxinsights.com Claire Booth, President of Lux Insights. "We're a market research company, and we do qualitative and quantitative research for folks at this research company," says Claire Booth, President of Lux Insights. "A lot of our major competitors in the Vancouver market are the big market research companies. We kind of broke away and started our own thing. "What makes us a little bit different is we have all of that big firm experience, but we offer it in a totally different way, with boutique level service and hands-on customer attention. And, the principles of my firm are the ones that actually do the work, as opposed to just going out to get the business."
	Kinetix Media Communications Ltd. www.kinetixmedia.com Paula Skaper, President of Kinetix Media Communications Ltd. "We've been in business for 12 years, we were one of the first digital marketing agencies in the city," says Paula Skaper, President of Kinetix Media Communications Ltd. "I think our clients appreciate the experience that comes with that, the knowledge of how things have changed and our breadth of experience in the digital realm. "Then the other piece that I think helps our clients is our solid traditional marketing background foundation. It really helps us in situations where we're the digital agency of choice. We're better able to understand some of the challenges that might exist in the traditional realm, be a bit more realistic in terms of what's feasible and better at finding workarounds and cooperating with the traditional agencies."
	Microzip www.microzip.com Axel Krieger, President of Microzip "We provide data services directly to companies or to mailing houses," says Axel Krieger, President of Microzip. "We came to Vancouver in 1973 as immigrants from Germany. We were basically the guys that had the computer in 1973. "We're not completely specialized in direct mail but it is something that we do and it's something that we've been doing for a long time, helping clients get their data ready for a mail-out, for instance, or just helping clients clean-up their data. If they have a database internally that they have duplicates or they need to run it through something like a national change of address for clean-up or they want to import a new database and they need it formatted to a particular way, we can change the fields."

Kinetix Media Communications: We're a boutique agency so our clients really represent a pretty diverse group of industries. We're very careful to avoid being in a conflict of interest situation. When you're a boutique agency and you have a small team, you want to make sure that you're giving 100 percent to every client. You can't really have two clients who directly compete so that, of course, affects our mix but primarily we've got a really good stable of clients in the financial services side of things. Manufacturing is another really important sector for us, B2B marketing in manufacturing and then we have some fantastic travel tourism clients as well.

Kirk Marketing: We're pretty diverse: not-for-profits; B2B; financial category, so banks, investment firms; real estate, so real estate developers; education, higher ed, a lot of the local universities; and then automotive.

Lux Insights: We do gravitate to particular sectors. Overall, our sectors would be technology, insurance, retail, tourism, packaged goods, and real estate.

Where your clients are:
Microzip: I would say 80 percent of our clients are in the Vancouver area. The rest are kind of all over the place but mostly in the rest of Canada and the U.S. so not so much international. There are no international clients really outside of the U.S.

Honeycomb Direct Mail: They're definitely fairly concentrated within the Lower Mainland. There's not a lot going into more rural and northern areas.
We don't deal as much with U.S. companies, but if there's a Canadian client that needs to have some communication, especially with the proximity of the U.S. border in Vancouver there's definitely some cross-over there, and even overseas as well. But, the bulk of it would be within Canada.

J.R. Direct Response: We have North American based clients, and we also have internationally based clients who mail to international markets. We actually don't do a lot domestically, being within the Vancouver market. We do have a few clients locally, and we service them both on the international market, but also on the domestic market as well. We provide some domestic services, like insurance types of clients, who focus on the general Vancouver market. But, then we also have clients locally that target international.

Kinetix Media Communications: We've made a conscious choice to focus our efforts on the needs of the B.C.-based business, because there's a really rich business community here. There is enough vibrant, thriving, fascinating entrepreneurial business in this province that it really wasn't necessary for us [to work with clients outside B.C.]. We've got fantastic clients here that are doing really incredible things and we get to see them face-to-face everyday, which is important. There are just some things that are easier done over a cup of coffee in a meeting room than over the Internet. I like to get to know my clients.

Kirk Marketing: We have clients across North America, but primarily our clients are in B.C. 80 percent are local, and 20 percent would be outside of our geographic footprint right here. Toronto, Alberta, Montreal—it just depends if they're in a space where we've done work before, or are "referencable" because we did something that stood out in the marketplace and they came to us that way.

Lux Insights: They're a mix between Vancouver and Seattle. We have some new clients in Victoria as well. We do everything from small, little hotel chains, all the way up to major Crown corporations based in B.C. We're right across the board.

The culture of Vancouver's direct marketing community:
Honeycomb Direct Mail: The local industry on the whole is pretty sophisticated. There are actually some really, really good competitors within the marketplace, which is great because it keeps the overall customer base very educated. From our point of view, as long as you're doing it right, you kind of help the whole industry grow, and if the whole industry grows everyone wins.

J.R. Direct Response: I think the culture is really endemic of a more general B.C./ West Coast culture. It's a very strong, intelligent community, but a very—I don't want to say "casual," but there's a relaxed atmosphere within the culture itself. I think it's a lot of very good, smart individuals, who are very dedicated to their roles, but at the same time are enjoying the West Coast life.

Kinetix Media Communications: I don't think honestly that Vancouver is all that much different than any other major market in Canada. We have a thriving business community. We have some really big businesses that are driving the economy in a significant way and we have a lot of mid-sized and smaller businesses. If we were comparing it to say Toronto or Montreal, they're going to have more large enterprise on balance than small enterprise so by default that means that the budgets here are smaller. We have to be able to do a whole lot more with a whole lot less.
I think the realities of the size of the economy that we have here does impact the scale of some of the things that can be done. It just costs money to get things done and so, from that perspective, I think that makes it in some ways a little more challenging. We're still competing with people from much larger markets. My clients are still competing with companies from larger markets in Canada, larger markets in the States and larger markets overseas so they need to really come to the table prepared to play ball but they need to do it perhaps with fewer resources immediately at their disposal. The minute you say that I can think of a handful where that's not even the case so I'm really talking in general that there's a heavier concentration of that mid-sized business that is competing at that level.

Kirk Marketing: The leap into the modern era of results-focused marketing, it takes dollars, it takes an investment, a willingness to accept risk, strong leadership. You're going to fail in a lot of these learnings until you get it right and then you can go to market with it. You know, you've got to go there, because businesses are looking for marketers to demonstrate, on an ongoing basis now, that you can help them grow their business. It's a bit of a wake-up call for everyone who made it through the recession and is much more keenly aware of how accountable marketing needs to be to organizations now. Marketers want results. They want measurable results. They want proof of delivery and results.
They're slow to make the investment into the talent pool, and the technology that's required to meet those demands because it takes an investment, and it takes a serious commitment that that is where you're taking the company, where you need to be. At the end of the day that's what marketers are telling us in the marketplace. I've yet to meet a marketer that's told me that getting the data and doing the work upfront is not critical, that being able to measure the results is not critical.

Lux Insights: I would say the one word to describe the marketing community here is "small," and by that I mean everyone knows each other. I think one of the main reasons for that is because there are not a lot of head offices here. It's not like people join a head office and stay for years and years and years. There's a lot of movement between agencies. There's a lot of movement between Crown corporations. There are a lot of consultants that kind of go back and forth between consulting and working for companies as well. Whenever I hire an employee I tell them over, and over, and over again, Vancouver is a very small market, never ever burn any bridges.
I love the fact that it's a small market. It forces you to be absolutely sure that the quality of your work is top notch. You know, a lot of my business comes from word-of-mouth, and if it's not absolute top quality, somebody is going to hear about it, and that will really impact me.

Advantages to doing business in Vancouver:
Honeycomb Direct Mail: It is a fairly strong market, so there's a lot of business to be had. I don't necessarily see that some businesses are truly tapping into the full potential of their database, or donor base, or their data as a whole, taking full advantage of some of the information they're been collecting, because business comes, right? I think if you're in a situation where you need to go out there attracting more, people start to dive into that a little more.

J.R. Direct Response: In terms of locale it's a great place for us to be situated. We cross every time zone around the world. At the start of Australia's day, it's the end of our day. At the end of the day in Europe or South America or South Africa, that's the start of our day. We have a good global reach around the world, in terms of time zones, which is a nice place to be.
There's a very strong, solid, skilled workforce available to us as well, within the greater Vancouver area. Both in terms of people out there right now, and emerging individuals from local universities and whatnot.

Kirk Marketing: Quite simply, Vancouver is one of the most beautiful places in the world, certainly in Canada. It is a great place to live. We're fortunate to have a wealth of talented, educated, young people who understand data. We're getting a lot of people right out of university that are leading edge on this stuff. They're doing behaviour modelling. They believe that the surest way to understand future behaviours is to clearly understand the past behaviours. We have access to these people here, and I think that makes a big difference. They're hard working, and they're able to maintain a healthy life balance while living on the West Coast. What's not to like about that?
There's been a sense of excitement in Vancouver since the Olympics that has caught on. I think it's really brought the city to life.

Lux Insights: I would say one of the key things, and this is something I've always felt very strongly about, is the importance of a work/life balance. In the culture within Lux, and in the types of employees I hire, I'm looking for people that have a really good work/life balance, and who want to maintain that work/life balance. If you're living here and you're not outside and appreciating it, then why are you here? I really feel strongly about that. People don't really work past about 6:30 at night. Everybody wants to be outside, climbing, or hiking, or skiing, or whatever the case is. And, I think that makes for more well-rounded business people and, I think it makes for happier employees.

Emerging trends within the industry:
Microzip: I think that in the mix of marketing these days email certainly has its place but I think that direct mail is definitely not dead. I think some people think direct mail is dead but it really isn't because it truly is the only medium that you can use to get something in your customer's hands. With email, it's so easy to drag and drop it and email is great if you've got an opt-in list for people who are really interested in your product. You've got a captive audience, that kind of thing but for prospecting, emailing sucks.

Honeycomb Direct Mail: I think personalized printing, variable printing, speaking one-to-one to clients is always exciting to me. The more you can engage a customer on a one-to-one level, the stronger that response is going to be. We're seeing more clients really tapping into the knowledge they have been gaining to really personalize the messaging, as well as the piece, to a client, at that individual level, and just seeing the responses from that. It's been really neat to see what certain customers are up to.

J.R. Direct Response: We're going through a lot of changes right now, and we're seeing a lot of different changes in our different areas. I would say one of our stronger areas in the past was always our list side. We had a lot of business on the list side, and that was a great business for us, I would say, 10 years ago. There were huge volumes. But, over the last little while that's shrunk incredibly, so that we're dealing with much smaller file sizes, lower name exchanges, which means obviously shrinking revenue sizes for us, because our revenue on the list side is all proportionate to the number of names that are brought in.
On the flipside, I think our data processing side is seeing a lot of growth, because there are a lot of customers and clients out there who have large databases, or who are acquiring large databases that don't have very strong customer detailed profiles, a lot of duplicates in their files, especially on the international side. We're seeing a lot of opportunity in there, in terms of helping clients with their database management, cleaning their database, making sure that it's updated, that they have all the proper fields, and making sure that it's structured properly, and then capitalizing on their database. A lot of clients are struggling bringing on new customers. So, what we're finding is they're looking for opportunities within their existing database and making sure that they take advantage of the data that they have there. I think that's probably an area that's growing for us, particularly, like I said, in the international market.
I think it's more and more important, and will become more important over the years, that companies really take a full-on look at their integrated marketing plans, and not to look at their activities in different silos. They need to make sure and focus on making sure that the customer is targeted in the right manner, and its complementary manners, across all the different mediums that are available.
We're looking at expanding further in our service offering, and then partnering with other companies that can offer the areas that we don't, maybe more on the social media side, or the internet side, what have you, to make sure that our clients are served in all areas.

Kinetix Media Communications: We're seeing a real move towards online in a way that hasn't necessarily been there in the past, doing more innovative things online and getting smarter about online so more sophisticated lead generation programs, less batch and blast email and more appetite for really targeted segmented email so we're definitely seeing that.
We're seeing a real rise in interest in digital video, so much so in fact that we moved our offices in June of last year so that we could set-up a full HD video production studio for our clients.
We're seeing a shift toward that professional content in video and on the web. We're seeing the new sites are starting to see more traction and seeing that some television stations are getting much smarter about how they're going online. If the CRTC would just play ball, release its chokehold on content and get out of the way, I think we'd have a whole lot more opportunity than we have. Unfortunately, it's political but I do think that with some of what they're doing in terms of limiting video content in particular on the Web and trying to control broadcasting in Canada, they are actually cutting off the seeds of entrepreneurial development here. Because we're not exposed to it, therefore, we're a little behind the times in what's available so we just aren't learning and thinking as much as we could be.

Kirk Marketing: I think clients are waking up to the fact that true marketing solutions have to post better results, and to do that you have to understand how all channels work. The fact is that when you help the client understand the value of their clients, you not only find valuable marketing insights, you're helping them broaden efficiencies right down into their own businesses. It's the kind of win-win that owners are beginning to demand, and rightfully so, as marketing has always been about much more than just advertising and promotion.

Lux Insights: In market research in particular, social media is obviously the big trend right now. There are some companies that are doing a good job of using it, and some companies are kind of a little confused as to how to use it. It's something that we're paying very close attention to. And, in the upcoming National Market Research Conference, I would say probably 80 percent of the presentations being given are about social media.
My personal stance on it is that it's a very useful tool for market research, when used properly, and I do think it's going to have a major impact on how market research is done.

The second half of 2011, and beyond
Honeycomb Direct Mail: This year, business is up. Are we at full market potential yet? I wouldn't say so. I still feel there's plenty of room for growth. It's an exciting marketplace. There's a lot of momentum there.
I think the markets across Canada we deal with are all coming out of the recession quite strong. Marketing budgets are going up. People are mailing more and more frequently. There are a lot of positives.

J.R. Direct Response: I know we still have a lot of challenges ahead of us. The recession hit everybody to varying degrees, and my clients weren't sheltered from that by any means. And, as a result, our company has had to make some adjustments, and are continuing to make adjustments, for the long term. I think short term, our outlook is positive. Long term, we've got a lot of work to do to get through everything. And, whether or not that's presented by other industries, I don't know, but I would say that within our industry the feeling I get from different companies, is that we're still making a lot of adjustments and recognize that long term there are major adjustments that still need to be made.

Kinetix Media Communications: We've got a strong dollar and for some of our market base that's good but for others, it can be a challenge. You know, for the tourism clients that we work with, last year was a huge year. Lots of people came to Vancouver last year but they're not necessarily rushing to come back this year. The tourism industry is having to work harder. They're having to peddle a lot faster to generate that momentum and maintain that momentum. It was the same the year before the Olympics. Nobody goes to an Olympic city the year before the Olympics and they don't necessarily go the year after the Olympics because they want to go the year of.
We're seeing people more willing to go to the States to do some of their big shopping because the price advantage in the U.S. is huge. Manufacturing clients, I think they're stepping up and realizing that they no longer have this huge price advantage to rely on so they're having to really step up and look at how do I differentiate my business? For them, some of it's about direct marketing but some of it's about brand positioning and the control of that so it's a different set of challenges.

Kirk Marketing: I think for Kirk we've been fortunate that we've been going down this new road, and 2011 is shaping up to be one of our best years. I think right now we're pacing at our growth expectations, we're probably running about 30 percent ahead of last year. I think that's substantial in the marketing world.
I think that overall marketing budgets in Canada remain challenged in many ways. People are running leaner and meaner. They want results. They're more cautious. You know, the days of batching and blasting, and just going for the all-out message at all costs are long gone.

Lux Insights: I've seen it pick up in 2011 as opposed to 2010, for sure. Clients are now looking at smaller companies because of the lessons they learned during the recession. So, for companies like mine, it definitely helps to pick up the business. But, in terms of being out of the woods, I don't think that's the case. I don't think that's ever the case.