Printed DM ROI is on the up as unopened volumes fall

By Richard Stuart-Turner, Monday 21 November 2016

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In terms of ROI, it’s fair to say that direct mail is going through something of a purple patch.

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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 from data specialist Wilmington Millennium, which surveyed 4,610 consumers.

Of the 3.6 billion items of direct mail sent annually, 1.8 billion were reportedly thrown away unopened in 2013 while today this has fallen to 1.3 billion.

The medium delivers an average ROI of £3.22 for every £1 spent, compared with online’s £3.12, according to the figures from the Royal Mail.

There appear to be numerous catalysts for this turnaround for a channel that many had believed would be sent into terminal decline by digital alternatives.

As a marketing tool, direct mail has always offered a number of advantages that online alternatives are not able to compete with.

Numerous recent studies have found that most people engage more with printed documents than electronic documents.

“It is hard to stand out from the crowd by using email whereas a well-crafted piece of mail has immediate impact,” says GI Solutions Group head of group marketing Tara Pickles.

Direct mail is also a tactile medium that consumers are more likely to keep and look at again, particularly if it stands out in some way visually or creatively.

“I’ve seen market research recently that says people value something 24% more highly if they can touch it as well as read it,” says Strategic Mailing Partnership chairwoman Judith Donovan.

“There are also a lot of very cute formats around at the moment such as pop-outs and unusual shapes and that’s intriguing and gets it away from that commoditised approach.”

Over the past few years direct mail has also become a lot more personalised and the practice of ‘carpet bombing’ homeowners with ‘dear occupier’ mailings is understood to be at an all-time low.

Bombarding consumers in the hopes they will buy is now taking a backseat to quality interactions and there is an increasing desire from marketers to build profitable relationships.

“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,” says Karen Pritchard, product director of Wilmington Millennium company Mortascreen, which provides deceased data files used for direct mail suppression.

Indeed, better targeting and the reduced practice of addressing items to the homeowner or occupier were found to be the primary reasons for improved open rates.

The research states that 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. Only 16% believe that mailings addressed to the ‘homeowner’ or ‘occupier’ are worth reading.

Donovan believes another change in direct mail’s fortunes over the past few years has been the continuing improvements in print technology that are enabling printers to do more for their clients in helping the medium to stand out.

“There’s no doubt that the latest generation of digital personalisation and white paper solutions has been transformative,” she says.

“This is making the mailings very interesting because people do react incredibly well to personalised approaches.”

She adds: “There’s a lot of investment going on at the moment in new kit, and new kit produces sexy new solutions. Marketers are becoming savvier and we are also seeing new entrants. When you see new sectors getting into mail that you haven’t seen before I think it keeps the whole channel fresh.”

Donovan says increased data protection is also playing a large part in mailings becoming more valuable to consumers.

“Data protection is tidying up dodgy lists. Much cleaner lists will mean much higher quality and more relevant communications and that again will help with open rates.”

16-24-year-olds were found to be 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.

“There is a uniqueness to 16-24- year-olds receiving mail as they are so used to the digital world – a tangible letter sent to them personally is bound to stand out,” says Pickles.

Heritage Envelopes chief executive Mark Sears says it takes about three and a half seconds for a consumer to identify what they will do with a piece of direct mail when it lands on the mat. He believes effective use of envelopes can help to boost open rates and, ultimately, ROI.

“I think it’s a 100% improvement to send an envelope that’s unique or that stands out. I think marketers are now doing more with the artwork on the face of the envelope.”

He adds that, as print quality has improved, so too has the cost-effectiveness of putting good quality images onto envelopes.

“It’s about giving people an image that’s relative to the information that’s being sent out. If you can make an impression in those three and a half seconds with the imagery on an envelope, then the recipient will want to open and keep it and then you can put what you want inside.”

Open rates will likely continue to increase as marketers continue to learn more about how their customers tick and what they are most likely to respond to. And with the technology now at their disposal to deliver more personalised and targeted messages in an increasingly cost-effective way, direct mail is quickly reasserting itself as a key part of the brand marketing mix.


OPINION

Print offers an ‘interesting’ advantage over digital DM

mike-lordanMike Lordan, head of external affairs, DMA

Direct mail is highly targeted, tangible and, because of the large shift to digital media, relatively novel. All these factors combined with new printing methods, finishes and techniques produce messaging that stands out.

‘Digital fatigue’ is one of the consequences of the large-scale movement of consumer time and media spend to digital. This presents a tremendous opportunity for those who choose to use non-digital media. Non-digital ads stand out. Brands have learned that direct mail wins a strong reaction from consumers and, when that mail is highly targeted and relevant, the consumer will hold onto that mail.

Both these factors explain why the volume binned has decreased.

Direct mail has always had the chance to target well because of postcode data, which is extremely rich. New ways of overlaying postcode data with new sources, even from digital sources, means the targeting has become even better. New technologies such as augmented reality can also be included in mailshots to drive engagement up.

For marketing brand campaigns, ROI is increasing for direct mail because of better targeting, better production and better messaging. For the companies that produce the mail, ROI will be increasing because good margins can be made on novel printing techniques, folds and formats, which is exactly what marketers want.

There is one advertising maxim that it’s difficult to refute: be interesting. Because ‘interesting’ is subjective, better targeting, better production and better messages will make direct mail more relevant, more attractive, more engaging – more interesting.

As long as printers and marketers can work together to make messaging interesting using these techniques then those relationships with consumers will endure and marketing ROI will continue to climb, which is good for both the print and marketing sectors.


READER REACTION

Why is direct mail ba ck in favour with marketers?

stuart-speechleyStuart Speechley, managing director, KJS Print to Mail Services

“People are now trying to find better ways to get to their clients with direct mail. Postage is not cheap and I think people have become more educated over the years on what they send out. The days of the blanket mail are gone and that stops the junk. We’ve got busier again year-on-year; mailings are smaller but there are more of them. I’d like to think this trend is here to stay, even with the Brexit scares we haven’t seen signs of anything slowing down because it kicks people into doing something.”

noel-warnerNoel Warner, chief executive, Inc Direct

“I would imagine many people are sick to death with the constant daily barrage of unsolicited emails and find that it’s actually now refreshing to get a highly personalised and highly crafted piece of direct mail through the door. We’ve seen a slow migration of people moving away from online and back to offline and really embracing the true value, results and ROI from using direct mail. It’s so much more tactile and I think people are now seeing the important place it has in the marketing mix over and above email.”

david-amorDavid Amor, managing director, First Move Direct Marketing

“I think people are being more careful in what they mail and there is more consideration about who they are writing to. They also have much more information in their systems than they would have had a few years ago because there is much more data around now. As well as writing to somebody personally, you can have some understanding of their lifestyle, their age, possibly their purchasing history with you and their value. This gives you the ability to talk to people who actually want to hear from you.”

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