Close-Up: Live Issue - Does size matter to DM mailpacks?
campaignlive.co.uk, Friday, 27 January 2006 12:00AM
How will Royal Mail's new pricing structure impact on direct mail creativity, Claire Billings asks.
Falling response rates, digital's unrelenting growth and the public's continuing distaste for what it terms junk mail mean the need for eye-catching, engaging direct marketing has never been greater.
However, one popular technique used to differentiate mail campaigns from the piles of bills and traditional financial mailings on the nation's doormats - the use of larger and thicker formats - is about to become a less attractive option for marketers.
From 21 August this year, large-size mailpacks will become more expensive to deliver under the Royal Mail's new Pricing in Proportion system, which measures a pack by its dimensions as well as by its weight. DM agencies will not have missed the campaign Royal Mail is running in the trade press to highlight the changes.
To fall into the lowest price category (15.8p per item under bulk mailing discounts), mailpacks will need to be the size of a C5 envelope and weigh no more than 100 grams. The next size up is "large letter" (B4 paper size), weighing up to 750g and up to 25mm thick, which costs 19.5p.
This first price increase, although small, will hit charities such as Cancer Research UK, a WWAV Rapp Collins client: the charity's control packs now fall into the second category.
The agency, which has been leading industry opposition to PiP, is testing alternatives, but if it cannot achieve similar response rates with these, it will have to continue testing different formats until it gets it right, or until the client gets fed up and opts for a different medium.
The next leap, to "packet" category (a favourite among FMCGs for sampling) is more painful still. Under the new rules, the cost of posting WWAV Edinburgh's Drambuie packs would increase from 22.5p to 51.1p per item. Tullo Marshall Warren's loyalty programme for Guinness, which picked up gongs at both the Campaign Direct Awards and the Cannes festival in 2004, might well never have gone out, had the forthcoming restrictions been in place.
While accepting the inevitability of the changes, the DM industry is understandably perturbed. "It is like having your double-page spread reduced to a quarter-page ad - the canvas has been dramatically reduced," Warren Moore, the creative partner at Hall Moore CHI, explains.
In its defence, Royal Mail argues that the change to its pricing system is long overdue. It is the biggest change in the past 100 years - since the Penny Black was introduced. It claims the increased prices reflect the extra cost that handling large-sized mail incurs.
There are many issues, but direct agencies must start preparing now for the inevitable if they are to minimise the impact. From a creative viewpoint, there are few benefits, as Steve Aldridge, the creative partner at Partners Andrews Aldridge, explains: "This is Royal Mail making it harder for direct mail. But it is great for people who send out lots of bills. It will see the rise of the letter and greater copywriting. But it means it will cost more to do something interesting."
However, the industry's greatest fear is not the rise in costs, but that the new restrictions will promote the use of the type of uninspired mailings that gave direct marketing a bad name in the first place: junk mail.
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TRADE BODY - David Payne, consultant head of direct marketing, IPA
"The sheer level of awareness about PiP is a problem. The most difficult thing is that it is being introduced without much notice.
"It is complicated as a concept. Creatively, unless you are aware of it now, you are not going to be prepared for it.
"I feel that the Royal Mail's campaign started late - is everybody going to be ready for it when it starts? If you have got a control pack that is successful but it is the wrong size, you are going to have to test something quickly that is not as good.
"We may see a drop in mail volumes and response rates as a result of PiP and new price controls being introduced. This may tip clients toward digital."
ROYAL MAIL - David Dale, director of programming for Pricing in Proportion, Royal Mail
"There are ways in which people can exploit the rules, such as using different shapes within the size limits.
"Direct marketers need to test and trial the mailings in the new large letter sizes and see what the new response rates are. It will change the break-even point for their direct mail campaigns, but we do not know what these break-even points will be (until testing is completed).
"If what the doomsayers are suggesting comes true - that direct marketing will merge into one unified lump on the doorstep and everything will be the same - clients are still going to want to stand out."
DM AGENCY HEAD - Ian Haworth, chairman, WWAV Rapp Collins London
"Direct mail is a victim of its own success - as usage increases, so consumer receipt grows and the major challenge for clients and agencies is to achieve creative standout. The beauty of mail is its ability to be a tactile, 3-D medium where dimension can be used, where appropriate, to bring ideas to life.
"PiP constrains creativity and penalises it by increasing postage costs dramatically and, as such, will make the medium less attractive for clients, increase standardisation of mailings and hit response rates. PiP is a major setback in our battle to make the medium more creative and rid ourselves of the 'junk mail' tag."
CLIENT - Marc Michaels, director of direct and relationship marketing, COI
"There's a big educational jump, but agencies and clients need to understand all the options. If agencies use the standard format, what will the impact be on response rates and the end results? Can they defend using expensive formats? If they can provide empirical evidence, clients will be sensible and say we want that end result.
"In some cases, agencies also need to appreciate that creativity is not the be-all and end-all, and need to think the process through better and how it could impact on the bottom line. I think they need to involve production earlier in the process and respect their contribution."
This article was first published on campaignlive.co.uk
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