Thirty years after what is often deemed the world’s first banner ad, digital marketing has found itself at a crossroads. That ad, placed by AT&T on HotWired’s website for a mere $30,000, enjoyed a click-through rate of 44%, according to Fast Company — a pipe dream for modern marketers.
With digital advertising the norm — having overtaken more traditional forms of advertising in recent years — gone are the days of such easily garnered conversions. In today’s cluttered landscape, a digital-only approach is, to say the least, challenging. As marketers are well aware, the reasons for this are multifaceted:
More stringent privacy requirements and increasing concern among consumers
Europe’s General Data Protection Regulation (GDPR) privacy requirements, Apple’s restrictions on consumer data collection, Google’s impending elimination of third-party cookies and a growing desire by consumers to keep their personal information close to the chest are all contributing to frustration around how to safely, effectively and lawfully collect, store and use consumer data.
Increased competition for digital inventory coupled with shrinking engagement
Data from one clinical test indicate that Americans are overwhelmed by the sheer number of digital ads they are exposed to on a daily basis — an amount estimated at 4,000 to 10,000. More advertisers are vying for consumers’ attention in more places, contributing to consumers’ digital ad fatigue. According to Twilio’s 2022 State of Customer Engagement Report, 36% of global consumers said they experienced digital ad fatigue in the last 30 days — with younger generations, like Gen Z, reporting the highest rates.
Rising digital marketing costs
Due, in part, to increasing demand, the cost for digital advertising space has skyrocketed, driving up customer acquisition costs (CAC). Between 2021 and 2022, the cost per thousand impressions (CPM) increased by 61% for Facebook and 185% for TikTok, according to The Drum.
A lack of transparency around digital advertising measurement and effectiveness
A 2021 MIT analysis suggested that the effectiveness of digital ads is more difficult to measure than once thought, due to the vastness and complexity of the data. Coupled with current economic conditions, which have led many companies to cut their marketing budgets, these factors mean that marketers have to think more strategically about how to allocate their advertising dollars. Like the challenges currently facing marketers, the approach to addressing them must be multifaceted.
The hyperfocus on and saturation of digital spaces has paved the way for so-called traditional advertising to make a comeback. This includes incorporating tactics such as direct mail — the original direct-to-consumer, personalized marketing medium. While digitally native generations may be less familiar with this channel, direct mail provides marketers an opportunity to transcend the digital clutter and connect with customers in more meaningful ways at a time when spending is down. In fact, some of the world’s leading brands are investing in and seeing remarkable success with direct mail, which is the second most used method for B2C campaigns, according to a 2022 survey from the Association of National Advertisers (ANA).
The idea, though, is not to replace digital marketing with direct mail, but to use it strategically to complement digital efforts — i.e., to take a truly integrated multichannel approach. Field research published by the Harvard Business Review in 2022 showed over a six-month test with one e-commerce retailer, “those who received catalogs in addition to emails resulted in a 24% increase in purchases over those who only received emails, indicating a lift of 870% ROI.”
Bolstering digital efforts — and overcoming digital shortcomings — with online-to-offline integrations is key
“The people we want to go after as marketers, even though they’re online, we know they all go home or sleep somewhere at night — and that’s where all your devices come together,” said John Puterbaugh, Quad’s executive director of multichannel-emerging media. “So, in order to identify people, whether we’re sending them direct mail or showing a Facebook ad, using the household to identify them is a reliable way to get at them, as opposed to trusting only these walled gardens like Facebook, Amazon and Google.”
So, what is direct mail and where did it originate?
Direct mail refers to everything from postcards to catalogs to letters to coupons. As a marketing tactic, it gained widespread adoption in the late 1800s when salesman Aaron Montgomery began mass producing a one-sheet catalog. Other businesses quickly followed suit, adopting Ward’s approach as part of their own marketing and sales strategy.
What are the advantages of direct mail?
The reasons for incorporating direct mail into a holistic marketing strategy are many. For starters:
- Less competition for consumers’ attention: By 2025, it is estimated that marketers will be sending over 325 billion emails per day, according to data from Statista. In contrast, the average U.S. household in 2021 received more than 350 pieces of direct mail marketing — across the full year.
- Ability to make a personal connection: People enjoy receiving mail. This, perhaps surprisingly, is especially true of younger generations like millennials and Gen Z. According to a study by the United States Postal Service (USPS), 72% of Gen Z — the youngest customers surveyed — said they look forward to receiving mail, while 38% reported visiting a brand’s website after receiving mail from that brand. Furthermore, in one small business trends study, over half of consumers surveyed said they want direct mail from brands they’re interested in. Direct mail provides a way for marketers to not only stand out, but also spark the personal connections consumers are craving.
- Ability to reach a wide audience on a sustained basis: With nearly three-quarters of U.S. households having two or more people, per U.S. Census Bureau estimates, one piece of direct mail has the opportunity to reach several prospective customers. Add to this the fact that direct mail has an average lifespan of 17 days (meaning that’s how long recipients hold onto it before discarding), according to the Small Business Association (SBA), and direct mail has the potential to be viewed and shared many times over.
- Fewer challenges around privacy: Unlike digital marketing such as email, direct mail doesn’t require the same permissions or requirements, especially when it comes to GDPR compliance. It offers a way for marketers to connect with customers in a meaningful way offline.
- Better overall engagement: According to survey results from Lob’s 2022 State of Direct Mail Consumer Insights report, not only do people typically open direct mail the same day they receive it, but they also tend to spend more time with it than digital ads, per the USPS study. Perhaps that is because, as researchers in the USPS study discovered by looking at the brain activity of recipients, physical ads elicit a stronger emotional response — leading consumers to remember them longer after viewing them.
- High ROI: Despite the rise in direct mail costs — the result of higher postal rates and paper costs — it still delivers a better, more measurable ROI than digital ads. Letters are particularly effective: Participants in the 2022 ANA survey who sent a letter-sized envelope to prospects reported. With , based on the small business trends study, direct mail is highly effective at building brand awareness and acquiring new customers. According to Lob’s 2022 report, 62% of respondents said direct mail inspired them to act, while 44% say it’s their preferred channel for discovering unknown brands. Further illustrating its effectiveness, nearly 40% of consumers spend money with a brand for the first time because of direct mail.
To sum it all up
It’s clear that with the right combination of digital and direct mail marketing, brands can foster a deeper connection with people than they could with digital alone. Used as a supplemental or complementary method for connecting with customers (think QR codes and follow-up emails), direct mail provides a path forward for brands looking to make the most of their advertising dollars in challenging and changing times.
