The Direct Approach: The future of direct mail
By David Payne, IPA, campaignlive.co.uk, Friday, 06 October 2006 12:00AM
Digital by no means signals the death of the traditional direct mail outlets but it does require a shake-up. David Payne says there is help at hand.
How could traditional hard-copy print prosper when all around it its rivals are becoming screen-based? How does a static medium compete with the massive increase in audio-visual, interactive communications through televisions, computers, games consoles, mobiles, mp3 players and outdoor screens?
Direct mail volume peaked in 2003, and has declined since by a few percentage points. It is likely to fall further in the next few years.
In acquisition, digital media and door-to-door are already proving more cost-effective. The consistent growth of e-mail and viral marketing chronicled in the IPA Bellwether survey confirms this. As a result, I believe direct mail will become more focused on retention rather than acquisition.
This will be good for the direct marketing industry, which is constantly criticised for the high volume of unsolicited customer-acquisition mailings it sends. It is also good for direct marketing creative agencies as the focus moves to customer marketing.
Mail volumes are lower in customer marketing because targets are sourced from increasingly sophisticated databases, through which companies can readily identify a customer's current and future value. Because of this, advertisers can afford to spend more per pack. Despite "pricing in proportion" it will still be cost-effective to send expensive mail pieces to valuable customers. As such, while volumes decline, value may well increase.
As the focus moves to customer marketing, the creatives will be given more scope to engage with and persuade higher-value customers, while agencies' data-planning skills will be demanded to help continually refine the segmentation and targeting of the media plan.
Using new tools such as the IPA TouchPoints survey, advertisers will learn how mail can deliver a better brand impact - even to the non- responders - as this research can be used to evaluate demographic and attitudinal targeting. Whichever consumer group forms your target market, TouchPoints allows planners to segment audiences more creatively than was possible before.
For example, the matching of the 5,000 TouchPoints respondents to the 50,000-strong Barb establishment sample provides a DM tool of such potential power that Tesco is already investigating its ability to enhance its Clubcard database.
TouchPoints will also help marketers reach the DM "unreachables". The scope of the research allows deeper analysis of individual consumer groups than possible before, including those who opt out of receiving direct mail. According to Touchpoints, that's 57 per cent of the population. Until now, those people remained an unidentifiable mass: no-one really knew which alternative media could be used to target them.
On average, DM non-adopters spend four hours a day watching TV - only slightly less than the national average. They tend to listen to more radio, especially Radio 2, and particularly enjoy TV comedies, but are not so keen on soaps.
As one planner says: "Now we can target by media action, so we can see which groups are most likely to respond to DM. We can also look at how to reach people who opt out by using alternative media. That's great for direct targeting, an increasingly important part of any media plan."
So, somewhat counter-intuitively, we can see that hard copy DM may avoid hard times in the digital era, but what else could rain on the parade? Perhaps the greatest risks would be, firstly, to ignore the ease with which customers are able to screen out unwanted communications.
Then, there's the potential of Web 2.0 to enable widespread brand-bashing through negative word-of-mouth transmitted via e-mails, voicemails, blogs and the plethora of community websites. As one senior practitioner says: "If there is a risk, it is not just from advertising agencies looking for the next revenue stream, it is also from the fact that direct practitioners are not known for their lightness of touch. At the first sight of hard-selling commercial intervention, social-space users will quit. What the direct industry now needs to learn is not just hard facts, but also soft talking."
An exciting new age is looming, in which mailings may become the medium of choice to create a better brand impact against the background of an environment of transient media and ever-changing consumer behaviour. Direct marketing agencies have an exciting role to play in helping clients to understand media consumption and to create better brand communication, providing they have the necessary "soft skills".
- David Payne is the head of direct marketing at the IPA.
This article was first published on campaignlive.co.uk
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