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Commentary & Analysis

More Mixed Messages

By Frank J.

By WhatTheyThink Staff
Published: December 12, 2006

By Frank J. Romano Marketers need both email and p-mail December 12 , 2006 -- The Direct Marketing Association published an economic-impact study and the email revelations were, well, revealing. The ROI for email marketing was $57.25 for every dollar spent. The ROI of all non-email-related online marketing (they mean postal mail) was $22.52--less than half. Marketers spent around $300 million on email marketing, compared with $59.6 billion for non-email-related marketing (they mean postal mail). First of all, I believe that marketers need both email and p-mail. I recall pundits saying that the Internet and online marketing were going to destroy the direct mail business; yet, over the last year, marketers sent more than 114 billion pieces of direct mail--an increase of 15 percent from 2001 according to the Postal Service. The volume of bulk mail, which is mostly direct mail, now exceeds first class mail. Marketers are finding that good, old-fashioned mail ads work, especially in combination with online approaches. Postal mail does not get caught in spam filters, it can be targeted to just the right recipients and measured for effectiveness. Direct mail also benefits from restrictions on telemarketers, who are not permitted to phone those on the national Do Not Call registry. As the world becomes more digital, we may crave what is more tangible. As direct marketing has become more strategic, some agencies are integrating it into their overall strategy. Marketers are expected to spend $59.6 billion on direct mail in 2006, an increase of $15 billion since 2000, and up more than $4 billion in the last year, said Robert J. Coen, director of forecasting for Universal McCann. Email advertising is certainly cheaper than direct mail--Forrester Research estimates that marketers will spend $1.5 billion this year to send 600 billion junk email messages. Postage for bulk mail has risen 31 percent since 2001, and will rise again in 2007. The cost of paper has also risen. Printing is still a bargain. The argument says you might get a better response rate with a postal mailing, but the cost of that mailing might make it a more expensive response than the online response. But you need p-mail to get those email addresses--there is no real list of email addresses. But advertising agencies are starting to change their attitudes about direct mail. Most ad services did not include spending on direct mail as an advertising expense, lumping them into general sales expenses. As direct marketing has become more strategic, some agencies are integrating it into their overall strategy. DraftFCB, an agency recently retained by Wal-Mart, was formed from two agencies, one that had specialized in direct marketing and one that was a traditional ad agency. As the world becomes more digital, we may crave what is more tangible. The Postal Service, which has suffered from a decline in correspondence and customer bills/statements as result of the Internet, depended on direct mail for about a third of its revenue in the last year, up from 29 percent in 2001. Postal officials were worried that advertisers might move online, but since 2000, direct mail has grown, though marketers believe that a shift to email will happen eventually. The Internet has actually been an enabler for direct mail and that is why I believe that printers must find a way to offer both e- and p-mail.



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