2018 Direct Mail Surges in Usage, Response, ROI

Direct mail marketers received lots of encouraging news in the 2018 “ANA-DMA Response Rate Report.” Direct mail improved its usage ranking to tie with social media as the second most-used medium (57%), for example, and continued to deliver the best response rates of any medium. In fact, “snail mail” even improved on its response success by doubling median response rates over last year to 9% for house lists and 4.9% for prospect lists in 2018. Mail’s Return on Investment (ROI) also leaped by 12 percentage points to beat out online display this year. The only negative in the report is that those surveyed continue to doubt the future of direct mail, with 19% saying they plan to decrease usage in the coming 12 months. But if the report participants follow their behavior after previous surveys, which similarly predicted mail declines, direct mail usage will remain buoyant, which allowed it to rise in 2018 despite planned cuts. One drag on direct mail continues to be its Cost Per Action/Acquisition, which is the highest CPA of any medium and puts budget pressure on mail volume, which did decline for both house and prospect lists compared with the 2017 study. However, high response rates, competitive ROI, online tracking and print-tech advances are keeping marketers loyal to “traditional” mail in a digital world. In fact, direct mail usage for marketing campaigns equals or exceeds 50% for most of the 11 industry segments cited in the study. In usage, direct mail leaders were travel or hospitality (80%), nonprofits (75%), publishing or media (71%), and financial services/banks/credit (67%). Only Technology (44%), Retail (44%), and B2B Services (34%) came in below the 50% usage mark. But when it comes to tracking those response rates, marketers have definitely gone digital, with over half of surveyed marketers (53%) saying they use online tracking capabilities, such as PURLs, followed in popularity by the use of codes or coupons (45%) and call center or telephone inquiries (41%). For data comparing response rates by type of format and B2B vs. B2B campaigns, see our website blog post at http://www.acculistusa.com/despite-doubters-2018-direct-mail-ups-response-roi-usage/

Creative Format Shifts Key Direct Mail Metrics

In planning direct mail campaigns, marketers often turn to standard industry benchmarks courtesy of the annual "Response Rate Report" from the Data & Marketing Association (DMA), soon to be a division of the Association of National Advertisers (ANA). However, while general direct mail response rates for house lists (5.1%) and for prospect lists (2.9%) far outpace those of digital media, the mailing piece format selected can make a key difference in expected results. For example, an oversized flat envelope package tends to deliver the highest response rate: 6.6 % for a house file and 4.9% for a prospect list. Next most effective in terms of response are postcards, with a house file response rate of 5.7% and and a prospect names' response of 3.4%. At the tail end, but still far above digital efforts, comes the standard letter format, with a 4.37% response rate for house names and a 2.5% response for prospecting. Some marketers hesitate over the more expensive oversized flats, which have the highest cost per thousand (CPM) among formats at $481 for house files and $467 for prospect files. Which is why postcards continue to win fans among B2C and B2B marketers, with the lowest CPM among direct mail formats benchmarked. However, despite their higher CPMs, the solid response rates of flats mean they can deliver the highest ROI (37% and 30% for house and prospect names, respectively). Postcards and letter packages, meanwhile, are tied in terms of ROI, with house mailings garnering a 29% ROI and prospecting turning in 23% ROI. For links to more data, see our website blog post http://www.acculistusa.com/format-drives-differences-in-direct-mail-results/

2018 Marketers Face Old and New Data Issues

Direct marketers will face both old and new data challenges in 2018. A recent Forbes magazine interview with Tom Benton, the CEO of the Data & Marketing Association (DMA), highlighted six of those data hurdles for next year. The perennial problems of data quality and integration continue, worsened by the huge volume and types of data streaming into marketers. Many are struggling to decide which data sets to use and which to ignore, how to keep data accurate and actionable, and how to integrate new data with existing data. Several practices for 2018 success are suggested: clear business goals and target audiences to narrow the data focus; a clear test case for examining or onboarding data; regular examination of new and legacy data accuracy and value; and systems for integrating new data with existing data, especially given the new types of data streams available–everything from wearable gym trackers to chatbots to grocery checkouts. But 2018 also offers potentially exciting opportunities via new marketing tech tools, such as augmented reality (AR), machine learning and AI. The Forbes articles offers the example of how 1-800-Flowers improved customer experience by integrating the company’s website with artificial intelligence (AI) technology and natural language processing to understand customer demand and then search the product catalog to deliver customized recommendations. Use of AR today ranges from AMC theater movie posters to Simmons Bedding Co. product demos to labels of Australia’s 19 Crimes wine brand. At the same time, marketers face tougher challenges in the areas of data security and privacy rules. If customers don’t trust that sensitive information will be safeguarded, they’ll stop engaging, hurting not only individual brands but the data-driven community. After massive data security breaches made headlines in 2017, data security is a top concern to retain customers and prevent risk in 2018. Meanwhile, American marketers who seek to tap European markets need to get ready for the enactment of the European Union’s General Data Protection Regulation (GDPR), taking effect May of 2018, which will set a tough new baseline for consumer privacy rights. For more, see http://www.acculistusa.com/2018-offers-new-and-old-marketing-data-challenges/

Direct Mail Still Key Insurance Acquisition Tool

In providing targeted lead lists to insurance marketers, we've seen the continued acquisition power of direct mail over the years, so it's nice to find an Insurance Journal article supporting our experience. Speaking to independent property and casualty insurance agents (but with arguments that apply to mailings for other insurance types), author Michelle Peel of IWCO Direct printing, cites four key reasons direct mail should be part of customer acquisition plans. No. 1, statistics show that consumers prefer direct mail for branded promotions, she notes, citing Experian's 2012 Channel Preference Study finding that 73% of Americans prefer direct mail for brand communications. And that preference extends across generations to include millennials, with 57% of younger buyers saying they have made a purchase as a result of a direct mail offer. Direct mail acquisition also continues to have a higher response rate than digital channels such as e-mail, per the latest Direct Marketing Association (DMA) data (1% for mail prospecting compared with 0.1% for e-mail). No. 2, creating the relevant, personalized and timely messaging that makes direct mail succeed is easier than ever with online marketing tools and templates from many insurance providers and, we would add, variable data printing to fill rental list data into custom-targeted, personalized creative. No. 3, the U.S. Postal Service is on the side of direct mailers and continues to develop products such as Every Door Direct Mail for blanket area coverage, as well as print-to-digital technology promotions of Quick Response (QR) code and Augmented Reality (AR) use. No. 4, direct mail drives traffic to online channels, too; Peel cites DMA data that 44% of mail recipients visit the company website, 34% search for the company online, and 26% save the mailer for future reference. Of course, using personalized urls (PURLs), QR codes and AR will further help boost online traffic. See http://www.insurancejournal.com/magazines/features/2015/03/09/359395.htm

Marketers Pick E-mail for ROI, Mail for Response

Articles proliferate about social and online strategies, but the old standbys of direct mail, e-mail and even phone solicitation turn out to be the channels that shine when it comes to what matters: measurable results in terms of response rates, conversion rates, and return on investment. The Direct Marketing Association 2015 Response Rate Report vindicates marketers' continued faith in older, proven channels. Based on a survey of 485 marketers, the report shows that e-mail may have one of the lowest response rates among channels but still leads in ROI, with campaigns conducted with house lists achieving an average 30% to 32% ROI, and those using prospect lists achieving 15% to 17%. Direct mail continues to outperform all digital media in terms of response rates, with house list campaigns generating 3.73% response and an average 18% to 20% ROI. Social media, by comparison, had average click-through rates (CTRs) of 2.1% to 2.5% and 15% to 17% ROI. But social is still ahead of online display ads with CTRs of 1.1% and 1.5%. Meanwhile, phone calls win the highest response rate of 9% to 10%. For a survey synopsis, and a link to download the full report, see the Direct Marketing News article: http://www.dmnews.com/direct-line-blog/email-and-phone-uber-alles/article/406874/

Survey Finds Marketers Bullish on Big Data

Marketers are pretty united in their positive attitude about the opportunities of "Big Data." According to a 2013 survey of marketers from the Direct Marketing Association (DMA), data-driven marketers are generating increasingly profitable returns and are bullish on marketing programs based on Big Data. The DMA's “Quarterly Business Review” for the third quarter of last year, developed in partnership with Winterberry Group, surveyed 220 marketers and found that 75.4% expressed confidence about data-driven marketing, with 49.5% “strongly agreeing” that marketing informed by data is positioned to expand in the months ahead. See the report summary at http://adage.com/article/btob/marketers-report-strong-data-oriented-results/290866/?btob=1