Posted by: Drayton Bird
November 8, 2007
Issue #276

Direct Mail: A Premature Obituary

Not long ago, some smart-ass on-line zealot suggested that direct mail is going to fade away and be replaced by e-mail. How likely is this?

Well, as Sam Goldwyn observed in one of his better lines, “Predictions are difficult – especially about the future”, but this does not diminish the enthusiasm with which people keep trotting them out.

Moreover, as all good marketers know, human beings tend to believe what they want to believe, so such predictions often come from people with a vested interest in their coming true.

For example, only a few weeks ago a journalist for a Dutch on-line magazine asked me how long it would take for e-mails to kill direct mail. “Don’t hold your breath,” I advised him – and here are a few reasons why, which we can all relate to.

Last year, with 25,000 close friends, I saw the Rolling Stones in Sydney. How did this happen? After all, didn’t people predict that records would put an end to live performances? Come to think of it, didn’t they say TV would kill the cinema, and before that, cinema would be the death of live theatre?

Actually, media rarely destroy each other; they complement each other. How many times have you printed out an interesting e-mail or website? And consider the phone services needed to help people struggling on the Internet

How many significant means of communication have totally vanished in the last thousand years, except rather specialized things like the heliograph, the semaphore and the Morse code? Of course, some never took off – like the video disk, which I well recall an American expert telling me would replace the printed catalogue.

True, the illuminated manuscript has not been in much demand since printing took hold, but I see the Silver Reed typewriter still sells by mail order. The dear old fax, hardly a major medium, is still with us and gets results even though one would think e-mails might render it redundant.

But the predictions keep coming – and will keep doing so. Seven years ago, Gartner issued a report gleefully headed “E-mail Savings Threaten a $196.8 Billion Direct Mail Market”. By 2010, they said, “direct mail will almost be a hardly-remembered relic”. (I love the “almost”).

As another wit, Mark Twain, said on reading his obituary in the paper, “Reports of my death are greatly exaggerated.”

Nevertheless, for the first time I can remember, volumes in this country have been dropping, and these charts show it clearly. Will this continue till the old direct marketer’s warhorse drops dead in his traces?

Source DMIS

	Consumer	Business	Total
2006	3937	1091	5028
2004	4221	1197	5418
2002	3940	1293	5233
2000	3516	1148	4664
1998	3123	891	4014
1996	2436	737	3173

Source: NJF

	2005	2004	2003	2002	2001	2000	1999	1998	1997	1996	1995
Press	45.3	47.3%	48.2%	49.6%	51.4%	50.7%	51.1%	52.2%	52.2%	53.1%	54.2%
Direct Mail	12.5	13.4%	14.2%	14.2%	13.5%	12.1%	12.2%	11.6%	12.3%	11.6%	10.3%
Outdoor & Transport	5.5	5.3%	5.3%	4.9%	4.8%	4.8%	4.2%	4.3%	4.1%	3.9%	3.7%
Cinema	1	1.0%	1.0%	1.1%	1.0%	0.8%	0.8%	0.7%	0.7%	0.6%	0.6%

Source: Advertising Association/WARC

The Royal Mail in 2006 said direct mail volumes continued to fall in Britain with more than 5 billion items sent – a dip of 2.1 %.

Statistics, I once read, are an inaccurate way of stating half-truths exactly. And they seem to vary depending on where they come from. So it’s no surprise that more recently Data Quality News stated that spending rose last year, reaching £2.3 billion – a 12.2 % share of U.K. advertising.

They said, “That represents a strong return in a difficult year for advertising as a whole and for direct mail in particular, which had to deal with changes to the U.K.’s postal pricing system.” (The last bit is a euphemism for raising prices – Royal Mail’s alternative to a marketing strategy)

What is actually happening? And what can we assume about direct mail? Leonora Corden, head of market development at Royal Mail believes the recent slow down is the result of firms “improving their targeting to create even more relevant and personal offers.”

Judging by the number of duplicate mailings we get, I wonder; but she may be right. Amidst the slight slowing in the use of the medium, one group is swimming against the tide – financial marketers. Their expenditure is up. According to a survey by Nielsen Market Research for Marketing, 85 % of Britain’s direct mail pieces from banks and credit card firms are opened, with people more likely to read mail from a bank than any other type. (Sheer terror, perhaps).

Those surveyed said they throw away mail that’s wrongly-addressed or with spelling mistakes. What surprises research produces! The study suggests finance companies’ success is linked to the use of more sophisticated data to identify likely customers. Arjan Duijk, marketing director of Capital One, said: “We send to less than 15 % of the mailable population in the UK.”

But to whatever degree direct mail is faltering, e-mail marketing is certainly growing – fast. Will it overtake it? If so, why? If not, why not? And anyhow, what should intelligent marketers do?

Well, like it or not, what happens in the U.S. usually happens here eventually. So it’s worth looking over there.

Last November, the website MediaPlannerBuyerDirect revealed under the heading Direct Marketing No Longer Such a Snoozer that marketers sent more than 114 billion pieces of direct mail in the last year, an increase of about 15 % from five years before, according to the USPS. And last year, for the first time, bulk mail exceeded first class mail.

The direct mail industry there is alive and growing, said The New York Times – marketers were expected to spend $59.6 billion on it last year. That was an increase of $15 billion since 2000 and of more than $4 billion in the previous year alone, said Robert J. Coen, the doyen of media forecasting.

In 2006, marketers spent about $70 million on television spots, $12 billion on online advertising and $1.5 billion on e-mail marketing. Maybe it’s worth re-reading those figures, because however fast e-mail spending is growing it is still dwarfed by direct mail.

One seemingly sound basis for Gartner’s belief seven years ago was that “the response rate from targeted e-mail advertising is much higher than direct mail.” This is no longer true. So their predictions have turned out to be a little too sweeping.

Nevertheless they had good reason for thinking what they did. Here is why, in my view – and why they got it wrong.

I believe the effectiveness of media, if you assume – quite impossibly – that creative quality and targeting are equally good, is broadly determined by five factors:

1. How great an impact they have on individuals
2. How much creative potential they allow for
3. How much interaction they allow
4. How much they cost per message delivered
5. How great a share of voice they have

Generally, the greater the impact, potential for imaginative ideas, possible interaction, and share of voice, the greater the cost – and vice versa

Thus, the most powerful medium is one individual talking to another, in person. It has the greatest possible impact and allows for the greatest degree of interaction. Nobody else is there, so you have 100% share of voice. You can not only talk but use all kinds of visual and audible aids; and you can hear and see their reactions. It is extremely expensive, though.

Only slightly less powerful is one person talking to a group, for much the same reasons. It is also very expensive.

Then comes the telephone, also pretty dear, allowing for great interaction (unless you use an autodialler). However you can’t see people’s reactions or dazzle them with tricks of one kind or another - and normally you can only have one phone conversation at a time, so that is an expensive medium, too.

After that come direct mail and e-mail – and I honestly don’t know which should come first – which is probably why I come to be writing this piece.

Both media allow you to reach people as individuals; they have considerable impact. Both allow you to respond; both allow for a wide range of creative tricks – perhaps more so in the case of e-mails, especially if you take into account how easy it is to click through.

And so on, down the line through press and TV to radio, which must be close to the bottom of my scale. It’s very cheap to reach each individual, but not as interruptive or dramatic as TV. And then, perhaps posters last of all.

I am not sure where to place SMS but no doubt some fanatic somewhere is ready to prove it too will wipe the floor with alternatives. As Bertrand Russell said, “The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.”

Forgive this rather broad-brush approach to these matters, and let us return to the two media under discussion – e-mail and direct mail. Let’s not talk about whether we like or dislike a particular medium, and talk about value for money.

What is the basis for all intelligent investment? It is, of course, return on that investment. And people who make a killing do so when either an investment is undervalued compared to others in its field or it produces exceptionally high returns for the money invested – or both. An even better situation applies if you are among the first to take advantage of the opportunity.

The first people to invest in e-mail instead of direct mail as a commercial medium practically won the marketing lottery. It beat direct mail hands down as an investment. It was infinitely cheaper than direct mail; and since hardly anyone else was using it, they got astounding results.

I recall talking ten years ago to a Dutch marketer selling IT products to businesses who told me he had abandoned direct mail because he was getting a 10% response to his e-mails.

New technology often leads to such happy results. When personalization was first introduced, it doubled response for those who tried it.

But when something works, people copy it. When my Dutch friend was getting his 10% response his audience was getting very few e-mails; probably something approaching 100% share of voice among his audience. He had first mover advantage.

Now, I’ll wager he’d be delighted to get one tenth of the response he got then. And why is this? For three reasons I can think of immediately.

1. Because e-mail is as intrusive, if not more so, than direct mail. If something coming through your door intrudes, so does something that lands in that private, perhaps even more intimate space taken up by your computer screen.
2. Because it is much quicker and easier to delete a message than to bin a piece of direct mail, Click! – and it’s gone
3. Because – and this is very important – spam filters emasculate most selling messages.

Yesterday my Australian partner sent me a list of 100 words and phrases these filters don’t like.

They emasculate copy, because they include almost every tested selling phrase or word you can think of – not just obvious ones like 100% free, and all words that relate to sex or pornography, cures or medication, but also some things that are the very staples of good copy.

Don’t you dare try Dear Friend, 50% off, act now, amazing, compare, free gift, easy terms, now only, or even, God help us, your family and opportunity – you’ll get blocked

This makes it rather difficult to sell very effectively, wouldn’t you say? It doesn’t make it impossible – and I have a confession to make here: over 95% of my own promotional efforts are through e-mails.

This is because right now they work quite well for me. It is not because direct mail doesn’t work, or because I have given up on it.

What I find rather dispiriting about these debates over the merits of various media is their simplistic either/or nature. They utterly ignore the merits of synergy. What actually works best is a combination of media.

Marketing is often likened to war. In war, no wise general prefers one arm to another; says, “We shall use artillery, but no infantry.” The choice of one weapon should not exclude the use of another.

And, by the way, direct mail will be around for while. Take my word for it.

Contributed by Drayton Bird, Hon. F IDM
Guest Contributor
THE TOTAL PACKAGE™

For more tips like this, e-mail drayton@draytonbird.com saying “Ideas” (www.draytonbird.com)

Looking for resources related to this article? Try some of these.

Looking for more guest articles? Check these out.

Looking for past issues of The Total Package? Click here for our archives.

Want to share or reprint this article? Feel free. Just give us full attribution and a link to our Home Page when you do.

Attribution Statement: This article was first published in The Total Package. To sign-up to receive your own FREE subscription to The Total Package and claim four FREE money making e-books go to www.makepeacetotalpackage.com.

Related posts

• The ‘Rithmetics of Direct Mail
• Karate Kid Interviews World’s Most Persuasive Construction Worker
• Why FREE Doesn’t Work Anymore
• Are You a Direct Response Gazillionaire-In-Waiting?
• Making An Impression: How to Train Your Customer to Memorize Messages that Make the Sale

---

3 Comments »

1. Comment by David Foley — November 8, 2007 @ 8:57 am

   Terrific article. The amazing thing about credit card offers is that they keep coming despite a decade\’s worth of response decline. In Canada, ?MBNA\’s \”media\” strategy is 100% direct mail. Capital 1 uses DM extensively as well, although it is interesting to note that the mailings i\’ve received focus on low interest rate benefits and do not refer to the company\’s television commercials (the \”You\’ve Got Banker\’s\” campaign which likens bankers to household pests). While I suspect that the conpany is testing a DM version of \”You\’ve Got Banker\’s\”, the fact that the rate-focused control is the control proves that DM has its own set of rules … and that people who do not understand this will either waste their own or their clients\’ money.

2. Comment by John — November 8, 2007 @ 12:07 pm

   Brilliant article.

   Especially …

   [QUOTE] What I find rather dispiriting about these debates over the merits of various media is their simplistic either/or nature. They utterly ignore the merits of synergy. What actually works best is a combination of media. [/QUOTE]

   Thanks for the lesson,
   John

3. Comment by Markus Trauernicht — November 12, 2007 @ 10:46 am

   SMS will never die, just because is fills a human need. It was first seen as a rubbish-by-product, a nice add-on feature. Nobody expected it to take off so big. But the benefits are just so practical, catering to human needs.

   You can drop an appointment without having to make a phonecall. Or just let someone know that you are coming late, without having to excuse yourself via phone. (That is why I turn off my phone half an hour before appointments when I am the driver and could be late to a meeting because of the late party.)

   You can send an info, without having to consider social etiquette and the niceties / difficulties of smalltalk. Short and fast.

   You can even send an info and let the other person call you. Giving you a stronger bargaining position, because the other party called YOU.

   You can think about the wording, that you might mess up if you phoned because you are nervous, irritated, afraid to say the wrong thing or just bad with words. At times it\’s just so much more uncomplicated to send an SMS. Thereby relieving your conscience because you feel you made the necessary phonecall.

   Just the same with phones (landline) with an attached camera. It never took off, because there was no broad demand for that feature. What woman in her right mind would answer the phone before she finished her styling? There are more benefits in NOT having a videocamera attached that having one attached.

   Advertising via email and normal post works, because it\’s a medium of communication. Just like the old postal mail, which was invented as a form of communication between real people. Only later is was used for advertising, using a known medium. A known and working medium catering to the human need of communication.

   Creating a pure advertising media will probably never really work, because there is no demand or need from a market to actively receive advertising. Or would you like to receive advertising SMS all day long? Or stupid marketing messages in a similar media trying to be viral? (Funny movies can be seen on YouTube). I guess that is why mobile marketing is dead from the start, even if it will take the industry years and billions to find out.

   Its where the web 2.0 comes in so handy. It gives you so many possibilites to evade the advertising. Perhaps it is the reason why so many companies (aside from marketing companies) struggle with making web 2.0 pay. With social networks you can get and give the necessary content, communicate and evade advertising at the same time (perhaps it has become human need to evade advertising?!?). Probably also the reason why so many forums do not work when products can be bought on the same webpage.

   Have Fun!

   Regards
   Markus Trauernicht from Berlin