Email is not digital direct mail

If you're in the business of sending direct mail to acquire new customers and business, you might want to check out this site. It reflects a growing sentiment in the UK that combines two groups of individuals with merging interests -- those people who are tired of receiving numerous unsolicited offers on a daily basis in their mailboxes, and the environmentalists who lament the tremendous waste of paper involved when sending millions of pieces of mail that end up in landfills.

The possibility of banning "junk mail" in England, Scotland and Wales is being discussed by serious people in and out of government. The Royal Mail is obviously greatly troubled by any possible loss of revenue, and direct marketers are aghast at the thought of losing this channel.

Whether or not there is ever an outright ban on "junk" mail in the UK or the U.S., there is nevertheless a growing trend among marketers to rely less on direct mail and more on digital channels on both sides of the Atlantic. They relish the obvious cost savings, as well as burnished "green" credentials, in reducing direct mail volume. But you can't stop looking for new customers. And if you've been relying on direct mail, how do you "go digital" for demand generation?

Surprise: It isn't email.

Why? The biggest reason is, of course, CAN-SPAM. Today, banks can flood your mailbox with all the credit card offers they want, but they can't flood your email box with the same offers. First, it's not as easy to get your email address as it is your postal address. Second, even if a business has your email address, you can opt-out of that first prospecting email and be free forever from further offers. For these very important reasons, there is no direct linear progression from mail to email in the marketing world. Email is the most cost-effective retention, cross-sell and loyalty tactic in the universe, but it is not a viable acquisition tool in the way that direct mail is (though some would argue both are equally bad due to the sheer amount of wasted impressions).

So what's a direct marketer to do? Paid search has been broadly touted as a great acquisition tool in the digital world, and it is. The problem is that it works best when a prospect is actually in the purchase cycle, meaning the person has already decided to explore a purchase in a particular product or service category. In other words, paid search encourages preference rather than generates demand. That's the reason for searching!

The value of direct mail is that, when it works well, it can generate "impulse" purchases for any number of categories: from credit cards to caskets. A particularly successful direct mail piece can handle a complete sales cycle (awareness right through purchase) with one touch. Direct mail is the offline demand generation workhorse.

So how do you generate demand through digital channels, and at the same time incorporate the targeting of direct mail? In the offline world, demographic targeting based on age, gender, zip code, credit rating etc. has been the key driver of effective direct mail. Applying those data in demand generation online has proved a bit of a challenge. Of course, if you've registered at a site, and opted into email, there's a good opportunity to use self-reported data to create targeted offers for you.

The real workhorse of demand generation on the web is targeted display advertising. For the time being, this is the digital successor to targeted direct mail. And in today's world there are many different approaches being applied to targeted display ads -- behavioral and contextual being the two with the most promise. In both instances, marketers deliver ads based on knowledge gleaned from either the actions of the user -- a visit to one website can be the basis for serving ads to that person on another site -- or the content consumed at that particular moment -- an article on the latest tech gadgets brings up an ad for a new smart phone.

There's lots more to say about the many improvements in display ad targeting, but the point I'm making is that the next time you hear someone at your company suggest replacing direct mail demand generation with an email program, make sure he or she understands that targeted display advertising is the better road to travel for demand generation on the web. Once your display ads have hooked that new customer, and you get him or her into your email database, then enjoy the universe-dominating cost-effectiveness of email for retention, loyalty and cross-sell. And if you work with a digital agency that is proficient in both email and targeted display advertising, you're already off to a great start in "going green!"

Chris Marriott is general manager, NY and London, for Acxiom Digital.

 

Comments

Neil Squillante
Neil Squillante May 13, 2008 at 10:07 AM

I'm sorry Chris, but your hypothesis flies in the face of actual email acquisition campaigns I see every day.

Email works extremely well as an acquisition tool if you run your campaigns in quality newsletters with quality creative, a quality offer, and a quality landing page.

I can't speak for B2C campaigns, but in the B2B campaigns we manage we often beat parallel Google AdWords campaigns with regard to both cost per click and cost per lead -- and the quality of the leads tend to be better as well.

Matt Wise
Matt Wise May 13, 2008 at 9:14 AM

Chris,

You are correct that email is not digital direct mail - it so much more. Email is only a bad customer acquisition tool when it is used like direct mail - the batch and blast concept of buying an entire list and sending a mass mailing.

At Q Interactive we have proven that by using predictive mathematics and dividing lists into micro targets that are interested in individual offers we can create an excellent customer acquisition vehicle.

Q has been doing this for many years in the US and just last month we announced we are entering the UK market. I hope as we expand we can demonstrate to you, as we have already done for hundreds of top brands in the US, that you are correct email is not digital direct mail – for companies that do it right its so much more effective we would not want to belittle it with such a title.

Matt Wise, CEO Q Interactive

Matt Wise
Matt Wise May 13, 2008 at 9:14 AM

Chris,

You are correct that email is not digital direct mail - it so much more. Email is only a bad customer acquisition tool when it is used like direct mail - the batch and blast concept of buying an entire list and sending a mass mailing.

At Q Interactive we have proven that by using predictive mathematics and dividing lists into micro targets that are interested in individual offers we can create an excellent customer acquisition vehicle.

Q has been doing this for many years in the US and just last month we announced we are entering the UK market. I hope as we expand we can demonstrate to you, as we have already done for hundreds of top brands in the US, that you are correct email is not digital direct mail – for companies that do it right its so much more effective we would not want to belittle it with such a title.

Matt Wise, CEO Q Interactive