DIRECT MARKETING: THE RESEARCH GAP - Although direct mail has mushroomed in the past ten years, there’s no comprehensive research system to gather data on its effectiveness. Robert Gray measures demand

It is received wisdom in the world of marketing that there has been tremendous growth in direct mail over the past decade as advertisers have increasingly been won over to the benefits of targeting segmented audiences.

It is received wisdom in the world of marketing that there has been

tremendous growth in direct mail over the past decade as advertisers

have increasingly been won over to the benefits of targeting segmented


But what are the real statistics? The problem is, no-one knows for


According to the Direct Mail Information Service, expenditure on the

medium has risen from pounds 758 million in 1989 to pounds 1,540 million

last year, when almost 3.5 billion items were mailed out to consumers

and businesses.

Yet these figures, though they may well be broadly correct, need to be

taken with more than a pinch of salt. This is not to imply that they are

grossly overstating the position of direct mail in the marketing

communications pecking order. The likelihood is that they are a

conservative estimate.

But anyone casting around for data on direct mail is confronted with the

fact that there is no comprehensive, industry-wide, officially

sanctioned research system in place as there is for other media, such as

BARB, RAJAR and NRS for TV, radio and press respectively. There is,

however, increasing interest within the direct marketing industry for a

more foolproof system of research and a number of moves are already

being made in this direction.

The main barrier to its creation has been a reluctance by advertisers to

come clean on their expenditure. A reason for this is that direct mail

is what one might call a secret channel of communication. By keeping

quiet about their activities, advertisers using direct mail are often

able to steal a march on their competitors. It can be weeks before a

direct mail campaign comes to the attention of rival marketers, by which

time it may be too late for them to respond effectively.

’Direct mail is a funny medium because it’s secretive and so it’s very

hard to find out to the nearest pound how much is spent,’ says Jeremy

Ridgeway, the sales and marketing director of Market Movements, a

company specialising in providing direct mail information. The company

has a library of direct mail material stretching back ten years

comprising 300,000 creative treatments.

It operates a 6,000-strong panel of consumers which passes on all the

direct mail material it receives.

A more recent entrant into the market, Thomson Intermedia, also has a

panel of 6,000. Backed by the fast-growing market research company, GfK,

it is considering doubling its panel size.

’The only way to do research into direct mail well is to get a large

panel that is nationally representative,’ Thomson Intermedia’s sales and

marketing director, Sarah-Jane Thomson, says.

’There are flaws. But with a panel of 6,000 you can make an acceptable


There will always be doubts about the reliability of such estimates.

More accurate targeting - geographically and demographically - means

some significant campaigns may not be given their proper status or even

picked up at all, even with a well-balanced panel.

Moreover, while extrapolating upwards from the number of mailings

received by a panel may produce a fairly accurate figure on volume of

material sent out, it is not necessarily much of a guide to overall


Unlike above the line, media is not the biggest cost factor. There are

many other variables to take into account when estimating total campaign

spend: cost of creative, paper, print, size of material sent, cost of

putting it in envelopes, whether envelopes are printed, which mailstream

is used and the cost (if any) of obtaining the mailing list.

Producing meaningful research is no small matter. A decade ago, a

company called Nationwide Direct Marketing tried to monitor everything

that was going out - and went belly up. Today, given that direct mail

has taken off in the interim, there is a greater need for research than

before and, as such, probably a better chance of funding it.

’There is a feeling among direct marketing agencies that, for direct

mail to be taken seriously, it needs clients and agencies to have the

same set of data,’ Ridgeway believes. ’It would be useful for the

industry,’ Jo Howard-Brown, the managing director of Direct Mail

Information Service, agrees. ’There’s no greater motivator than knowing

your competitors are doing it.’

The key to how such a system would be funded and given sufficient status

lies with the media owner, Royal Mail. Through RSGB it has run a panel

of its own since the 80s, although it is significantly smaller than

those operated by Thomson and Market Movements.

Royal Mail is about to embark on what it calls a ’scoping study’ to look

at the feasibility and cost implications of various research


The results are not expected until some time next year but it is clear

that, if it is found to be viable, Royal Mail will be prepared to at

least part-fund the undertaking. Although no concrete decisions will be

taken until the study is complete, it is almost certain that Royal Mail

will look for ’co-sponsors’ from within the industry, such as direct

mail agencies. It has held talks with some direct mail research

specialists, which might lead to a joint venture.

’We recognise that some kind of MEAL-type tool would be useful and

galvanise the industry,’ Debbie Moffat, Royal Mail’s media information

manager, says. ’It would encourage others to use direct mail and to

appreciate the extent to which it is already used. Everyone is fairly

unanimous about it being a good thing. The issue is whether it can be

done cost-effectively.’

There is, however, a feeling among agencies that other research needs to

be done. Alison Payne, a planner and director at Craik Jones, has been

trying to persuade several of her clients to fund a study into how

direct mail works once it has been received by a household. The aim is

to understand what gets binned immediately, what is filed and what is

passed on to someone else and why.

Evans Hunt Scott’s planning director, Debbie Ramsay, adds: ’We need to

understand how the direct part of the marketing mix is affecting the

customer’s perceptions of the brand, as well as whether it is getting

them to buy the product.’

Direct mail industry research would be welcome. However, the growth of

this sort of direct marketing has shown it is not an absolute


And there is already some useful data available, such as the Direct Mail

Information Service Factbook and the Direct Marketing

Association Census.

Finally, direct mail is not like above-the-line media in that clients

know how effective their campaigns have been by the number of responses

and conversions they get. As they already have this data - and have

little desire to share it with competitors - they are less enthusiastic

than agencies about the need for industry research.


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