Wilson Relationship Marketing Services' president says data culled offline can help improve online targeting.

The cost of snail mail continues to increase as postage and production costs rise. As this trend continues, marketers increasingly turn their attention toward internet marketing, focusing on search, email campaigns and website advertisements.

While the internet is viewed as a cheaper, easier way to reach an audience, this is not always the case. Offline direct mail campaigns executed properly are still an effective way to reach key prospects and customers. Although the cost of direct mail campaigns is rising, companies can still make a good return on investment by taking a more prudent approach to direct mail. The key to success is to avoid the carpet bombing direct mail techniques of the past by using data-mining and analytics to manage down costs and to improve results.

Direct mail still plays a vital role in the marketing mix for a number of reasons:

1. The early promise of email as a replacement for direct mail hasn't been fulfilled. Many people still aren't comfortable providing email addresses to companies with whom they do business. As an example, among companies we've worked with we've seen email capture rates as low as 20 percent of an existing customer base, meaning direct mail is the only alternative for delivering, targeted offers and messages to 80 percent of these clients' existing customers.
   
   
2. Although the cost per delivered message is high for direct mail relative to digital media, the sophistication of tools and methods to define a target audience can more than offset this cost difference. Existing customer demographic and transaction data married with third-party psychographic and behavioral data can yield rich profiles of existing customers and provide insight into which groups of customers are most likely to respond to a targeted offer with a compelling value proposition.
   
   
3. A well-defined best customer profile can be used to improve prospecting with direct mail by helping define pockets of likely buyers-- those who look most like existing best customers in terms of profile attributes described above. By mailing to these well-defined groups and using response results to model future performance, campaign effectiveness can be continually refined and improved.
   
   
4. Finally, the insight gleaned from sophisticated direct mail marketing can now also be applied to online efforts. Profiles developed offline inform behavioral targeting on online ad networks and are starting to be used for refining search engine marketing.

Today, Google and MSN's IP-based geo-targeting technology provides opportunities to create regional campaigns with highly personalized ad-text that speaks directly to the traits exhibited by that region's customer base. For instance, a health club in Washington, DC may set up an ad words campaign to differentiate between customers in Arlington, VA, and Bethesda, MD. 

Knowing that direct mail prospects in Bethesda respond better to direct mail price offers and prospects in Arlington respond better to direct mail value-added offers, ad text and corresponding landing pages can be targeted for each of these areas to highlight the offers that performed best offline and boost overall paid search performance.

Although online marketing is an increasingly important part of the marketing mix, it certainly doesn't mean the end of direct mail. When judiciously used in an integrated marketing plan, direct mail is a powerful tool for delivering targeted messaging that gets results and, increasingly, it provides intelligence and insight for improving online performance, as well.

Dave Wilson is president and chief strategist of Wilson RMS.  Read full bio.