Direct mail ROI increases as unopened volumes fall

Richard Stuart-Turner
Tuesday, November 8, 2016

500 million more pieces of direct mail are being opened and read compared with 2013, equating to an additional £1.6bn being added to the channel’s ROI, according to new research.

Data specialist Wilmington Millennium, which surveyed 4,610 consumers, said the number of pieces of direct mail that are thrown away and recycled unopened has reduced significantly over the past three years.

The research states that of the 3.6 billion items of direct mail sent annually, 1.8 billion were thrown away unopened in 2013 while today this has reduced to 1.3 billion.

DMA head of preference services John Mitchison said: “We all know that many brands have moved their spend from traditional to digital media, which has left a marvellous opportunity for brands choosing mail.

“But it’s more than that. Direct mail has superb targeting opportunities beyond the postcode and there are all manner of new technologies, processes and executions that make direct mail particularly attractive and relevant for consumers.

“While direct mail gives excellent ROI, brands want to reduce wastage and better targeting and creativity has helped make sure mail is relevant, keeping ROI up and volume down.

According to Royal Mail figures, the average ROI of a mailing is £3.22 of consumer spend per pound spent.

16-24 year olds are the most likely to open their direct mail – with only one in 12 throwing it away unopened – and of the group most likely to bin direct mail straight from the mat, 45-54 year olds, 62% still open it.

“Younger people will never have had so much contact via mail. Excellent creative and targeting means these brand messages really cut through,” said Mitchison

“Older age groups may have older associations with nuisance mail. But if they did open those mailshots, they would be pleasantly surprised.”

Environmentally conscious areas were found to be the least likely to bin unopened direct mail. In Brighton, for example, only 14% was thrown away unopened.

Better targeting and the reduced practice of addressing items to 'homeowner' or 'occupier' were found to be the key reasons for improved open rates. Nearly 60% of consumers believe that a correctly addressed piece of mail which uses their name suggests that the mailing will be relevant or of interest to them.

In contrast, only 16% of people believe that mailings addressed to the homeowner or occupier are worth reading.

Karen Pritchard, product director of Wilmington Millennium company Mortascreen, which provides deceased data files used for direct mail suppression, said: “The industry is cleaning up its act and reducing the amount of irrelevant, poorly targeted, low quality mailings that were the blight of the homeowner a decade ago.

“The number of ‘dear occupier’ mailings are at an all-time low whilst the number of suppressions are up which demonstrates the desire of marketers to build profitable relationships with consumers rather than bombard them in the hopes they’ll buy.”

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