You might think direct mail marketing is the dinosaur of the marketing industry. Maybe you still use direct mail marketing, but you feel it’s time to move on to cheaper, more efficient methods. Between increased postage prices and the rise of digital marketing, the return on investment for a traditional direct mail campaign doesn’t appear to be worth the trouble. In fact, over the last three years, direct mail advertising spend in the U.S. has continually decreased. The United States Postal Service predicts this spend will continue to decrease from $20.6 billion in direct mail advertising dollars spent in 2014 to only $15.5 billion in 2020. That’s a drop of over five billion dollars in six years. On the contrary, the average auto dealership budget for direct mail has continued to rise. Though overall direct mail advertising dollars have dropped, dealer marketing budgets for direct mail have risen from 6.4% in 2000 to 9.7% in 2010 and 9.8% in 2015. Maybe they’re onto something.
Statistics show that the average consumer is exposed to thousands of advertisements each day. They hear ads on the radio (before they switch stations) and watch ads on television (before changing the channel). Digital marketing provides a slightly better approach. This is because digital advertisements are in front of the consumer on pages they want to see instead of interrupting their favorite music or TV show. But, according to one study, digital marketing is harder to process than direct mail. The study compared the effects of direct mail with digital media (email and display ads) by recording electroencephalography (a brain imaging method that records the brain’s electrical activity at the surface of the scalp using sensors) and eye tracking (tests that measure the gaze and movement of the eyes using a small, specialized camera). The study proved that direct mail requires 21% less cognitive effort than digital marketing. In fact, when asked to cite the brand name of an advertisement they had just seen, recall was 70% higher among participants who were exposed to a direct mail piece (75%) than a digital display ad (44%).1
Direct Mail is More Powerful Than Ever
With direct mail, consumers must respond. They have to see, touch, and decide how they will react to your marketing. In fact, one article reports that 80-90% of direct mail is opened.2 That means that your direct mail is being received, seen, acknowledged, and reacted to.
So why is direct mail more powerful now than it was before? Well there are many reasons, but I’ll focus on just three:
1. It’s less saturated.
2. It’s highly targetable.
3. It’s the Anchor to Omni-Channel Campaigns
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1. It’s Less Saturated
According to The Household Diary Study by the United State Postal Service, total mail volume dropped 2.1% from 2001 to 2015.3 Today, the average household receives 15 pieces of mail per week. That’s less than three pieces of mail each day. Compare this with the average internet user, who sees roughly 77 emails and web advertisements each day. In 2015, the number of consumer emails sent and received each day totaled over 93 billion.4 This number has increased at an average annual rate of 6% and is projected to reach nearly 118 billion by the end of 2019. With less competition in the mailbox than the inbox, direct mail has more value and finds itself receiving more attention and responses than ever. USPS reports that 93% of households take time to sort their mail each day and 83% enjoy receiving mail.5
2. It’s Highly Targetable
Another reason direct mail will survive the digital age is because of data. Big data and, more specifically, data analytics have been key to direct mail evolving past the traditional coupon mailer. Contrary to the ancient concept of blast campaigns that marketed to tens of thousands of customers with little data and the classic “current resident” greeting, direct mail today can be focused to specific audiences, within specific areas, who are currently in the market to buy. Rather than sending out 10 to 20-thousand pieces with each campaign, dealers can send significantly smaller piece counts and achieve better results. Today’s mailers can show the recipient’s current vehicle, provide an offer for that vehicle, and even give examples of vehicles the recipient could purchase with similar monthly payments to that current vehicle. They also include personal URLs that not only give the recipient an additional option for responding, but also add an extra touch of personalized marketing.6 By marketing to a highly targeted audience, dealerships can see an increase in response-rates for a higher return on investment. So while traditional best practices are still essential (like a solid list, good offer, and strong call to action), updated
methods, like personalized landing pages and data analytics, have kept direct mail competitive in today’s advanced world of marketing.
3. It’s the Anchor to Omni-Channel Campaigns
Combine the success of the classic direct mail marketing campaign with a strategic use of digital marketing for the highest ROI. By utilizing the power of omni-channel marketing, you’ll see the wide-spread capabilities of digital marketing combined with the physical benefits of direct mail for the ultimate results. You’ll be able to hit everyone from millennials to baby-boomers with marketing that works for them, all in one campaign. The more exposure a consumer has to a product, the more product recognition will increase, which will create brand recognition and lead to more conversions. You’ll be off-setting the weakness of digital marketing with the strengths of direct mail and vice versa. This omni-channel approach can lead to response-driven marketing campaigns, which leads the recipient through each step of the buyer’s journey with marketing that responds to his or her actions whether they’re checking their mail, on their phone, or searching the web. This type of response-driven campaign will lead the customer through your marketing funnel and into your showroom.
Remember the USPS study that reported a decrease in direct mail spend over the next several years? That drop may not be due to the death of direct mail, but rather the evolution of direct mail. It’s survived the years because it’s learned to adapt to changes in society and marketing. As campaigns become more specific, they require less mail pieces. Which leads to a decrease in direct mail spend, but an increase in direct mail effectiveness.
The point here is this: Direct mail works and it works best when it’s not overused, it’s segmented down, and it’s combined with other marketing channels. It’s the anchor to any campaign because it evokes a response. Digital and email provides convenience and awareness, but direct mail provides the physical and personal touch that no email only or digital campaign can provide. Don’t underestimate traditional methods. By utilizing the power of a direct marketing campaign with today’s more advanced marketing techniques, you’ll see increased traffic and higher conversion rates than ever before.
4. http://www.radicati.com/wp/wp-content/uploads/2015/02/Email-Statistics-Report-2015-2019-Executive-Summary.pdf 5. 2016 DMA Statistical Fact Book https://thedma.org/knowledge-center/marketing-statistics/direct-mail-statistics/