A Snarketing post by Ron Shevlin, Director of Research at Cornerstone Advisors
It shouldn’t come as a surprise to anyone that Deliver, a marketing magazine published by by the US Postal Service, is little more than propaganda for direct mail marketing. Seeing the following in a recent issue was hardly shocking:
“The Direct Marketing Association has found that direct mail boasts a 4.4% response rate, compared to email’s comparatively tame average of 0.12%. Translated into ratios, direct mail has a response rate of up to 10 to 30 times that of email. Direct mail’s response rate jumps even higher when compared to online display. Overall for display, only 6% converted as a result of the immediate action of the click, meaning that 94% of conversions happen at a later date.”
My take: The implied conclusions, as well as some of the stated “facts,” are wrong.
First, let’s look at the incorrect “facts.”
Direct mail’s response rate does not “jump” when compared to online display. The response rate is 4.4% regardless of who or what you compare it to.
In addition, the DMA is comparing apples to oranges. Because the study tracked consumers’ online behavior after clicking on an online display ad, it could determine that 94% of conversions came on subsequent clicks to the initial click.
But there was no ability to track consumer behavior after opening a piece of direct mail. It’s quite possible that consumers purchased at a later date or through another channel (also a possibility with the display ad).
And why the Deliver article implies that direct mail outperforms display ads challenges my mathematical sensibilities. Isn’t 6% greater than 4.4%?
The second — and more important — problem here are the implied conclusions to the DMA study: That the direct mail channel outperforms other channels. There are a couple of problems with these implications:
1. They ignore ROI. If I spend $1 million to send out 1 million pieces of direct mail, and get a 4.4% response that produces $100 per response, I generate $4.4 million in sales, which is 4.4 times my investment. If I spend $0.25 million to send out 10 million pieces of email, and a get 0.12% response rate that produces $100 per response, I generate $1.2 million in sales, which is 4.8 times my investment.
2. They ignore other factors. If the study compared the same exact campaigns, with the same message and offer, to two similar groups of prospects, then maybe you could attribute the difference in results to the channel. But we know that wasn’t the case. So by claiming the channel’s superiority, the DMA — which you would think would be comprised of some some marketers — ignores important contributing factors to marketing results.
The cited study is hardly unique and the same message gets trotted out year after year.
It’s indicative of what marketing has evolved to: Fiefdoms protecting their channel turf, grasping for any straws (or statistics) that prove their particular channel’s superiority or worth.
There’s no end to that channel-centric marketers will claim about their channels. Deliver magazine quotes a DMA spokesperson who attributes direct mail’s “continued” strength to “the fact that consumers face an ever-increasing number of digital messages.”
Hmm. I guess it’s not because marketers have learned how (or at least improved their ability) to right-channel — that is, sending the right message to the right prospect through the right channel. No, it must be — as the DMA spokesperson asserts — the weaknesses of other channel that props up his/her preferred channel.