The media landscape is evolving
The media landscape is more dynamic than it’s ever been. TV is now addressable, content can be shopped, radio streamed online and direct mail delivered programmatically. Even people are becoming media properties. We can listen to radio on the TV and watch TV on our mobile phones. We can even order groceries from a transit ad. Physical stores are becoming media and media is becoming a sales channel.
How we consume media has changed dramatically
How people consume media channels, how channels influence each other and what channels can be used to do is far more complex than it’s ever been. As ecosystems take over from channels, media needs to bridge marketing and sales distribution. It needs to reorganize around customer experience.
The challenge is that in this new omni-channel reality, the way we compare media and the tools we use to do it have not kept up. We still talk about traditional media versus digital media and distinguish between brand advertising and activation marketing. Media are still reported together as mass media, digital media or direct media.
Direct mail’s effectiveness gets overlooked in the digital age
Take direct mail. Historically, direct mail has been disconnected from the rest of media. As digital took over media (and our lives), direct mail, like other print media, along with physical stores, started to look less relevant – because how could physical media still be effective? It turns out it’s very effective. Research conducted by the Institute of Practitioners in Advertising (IPA) U.K. indicated a mismatch between the channels marketers invested in – and thought were most effective – and the channels that were quantifiably more effective. And yes, direct mail was one of those channels.
As digital gets absorbed into every channel, the industry needs to re-calibrate how it thinks about media, putting biases aside to take a more adaptive view.
Quantifying direct mail’s impact in the media mix
Pitney Bowes, a leading customer data and media technology specialist, is re-examining the relationship between channels to re-calibrate media-mix modelling for a more dynamic marketing reality. Their attribution modelling quantifies the influence of direct mail on the marketing mix. The following real-world scenario demonstrates the influence of direct mail, as well as the inherent challenges of last-touch attribution (where the last channel leading into the purchase is given credit).
A misleading campaign calculation
A marketer spends $10,000 in marketing and delivers 50 orders with a cost per order (CPO) of $200. All activity drives audiences to the campaign website to place their orders. Orders are attributed to the channel that directly led to the order on the website.
Based on this scenario, removing direct mail looks like a good decision to improve cost-per-order performance ($174) and save money (20 per cent cheaper) with the least impact to the number of orders (46).
The marketer removes direct mail from the marketing mix. While the overall spend was smaller ($8,000), it was less effective.
Orders declined by 15 to 35 total orders and the CPO increased by 14.5 per cent to $229.
So, what happened?
Game changer: Direct mail as catalyst
In the mix, direct mail was influencing other channels that were getting the last-touch credit. By removing direct mail, all the orders that were initiated from, or influenced by, the direct mail outreach were also removed – 15 orders. Last-touch attribution assumes a linear and finite relationship between channel and purchase, whereas people have a non-linear relationship with channels.
Red herring: Why credit was given where it wasn’t due
Pitney Bowes conducted a match-back exercise to understand the true influence of the direct mail. They looked at all orders that were placed and matched them up to the data list that was used to send out the direct mail. Where there was a match, credit was given to direct mail for the order placed (along with the other channel that participated and helped drive the transaction).
For example, some people who received the direct mail later searched for the company in Google, saw the search ad, clicked on it and placed their order – with the search ad getting the last-touch credit. This was also true for people who received the direct mail and went to the website but then left. They were later exposed to one of the display ads through re-targeting efforts, clicked on the ad and came back into the website to place their order. If the direct mail had not been sent, they may never have gone to the website and the opportunity for re-targeting would have been lost.
What we’ve found is that of all the channels used, marketing mail is the strongest as a rising tide that raises all other channels. For us, it’s not about physical versus digital but rather the combination of the two driving the best overall performance.
As this scenario demonstrates, direct mail made the campaign more effective overall and was worth the investment. It plays an important role in amplifying action within the marketing ecosystem and improving effective media response.
Working direct mail into your media mix
The core media strengths direct mail is known for haven’t changed. As the media landscape evolves and technology advances, direct mail has picked up some extra skills that further enhance its value to the marketing mix – including programmatic mail, personalization, building brands and amplifying social content.
This is a shortened version of an article featured in INCITE magazine. Read more.
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