Tuesday 26 September 2017

John McGee: Trusty and trustworthy direct marketing is real deal

Having the often-overlooked workhorse of the marketing landscape in the mix can offer brands a good return on investment if they get it right
For many small companies and non-profits DM is often the only marketing outlay in their drive to boost sales or replenish their coffers for their latest initiative or charitable drive (Stock picture)
For many small companies and non-profits DM is often the only marketing outlay in their drive to boost sales or replenish their coffers for their latest initiative or charitable drive (Stock picture)

John McGee

You learn something every day. Or in my case, it was over the course of the two days earlier this week that I spent judging entries for this year's An Post Smart Marketing Awards.

The key learning was that direct marketing (DM), the trusted pit-pony of the marketing world is alive and kicking and offers marketers and brands an important weapon in their armoury which, if deployed efficiently and tactically, can lead to a demonstrable and often substantial return on investment.

The awards aim to showcase and reward best-in-class marketing campaigns over the last year, particularly those that have a strong DM component. While An Post has a vested interest in highlighting successful DM campaigns, given that its mail business is a key beneficiary, the reality is that savvy marketers have known for a long time that DM works and they have been using it as part of their wider marketing mix for many years.

For many small companies and non-profits DM is often the only marketing outlay in their drive to boost sales or replenish their coffers for their latest initiative or charitable drive. For other brands, DM is often a small, but integral, component of a bigger through-the-line campaign that includes TV, press, radio, digital and outdoor.

In its recent Outlook report for 2017, Core Media noted that the Irish DM market was worth around €75m a year, putting it on a par with the thriving outdoor market. This figure, however, does not include the substantial sums that are being invested in digital direct marketing, but it does give a clear indication of the size of the industry which is poised for even more growth over the coming years.

In many ways, DM has finally come of age thanks largely to advances in digital technology, particularly in terms of digital programmatic printing, personalisation, inbound and outbound marketing platforms and, most importantly, the reservoirs of data that marketers now have at their disposal. Add into the mix their ability to analyse and segment this data and a general willingness amongst consumers to engage with relevant DM and it's easy to see why it forms an important part of the marketing landscape.

Not surprisingly, many of the entrants to the awards using DM as part of their campaigns were drawn from a wide range of industries including financial services, retail, automotive and non-profits.

While most of the entries highlighted their sales performance, others used DM effectively as part of their customer acquisition and loyalty programmes.

But where sales were the benchmark, most of the entrants were able to demonstrate a very clear and often substantial return on their initial investment. And somewhat surprisingly, many of the budgets allocated rarely went beyond the €20,000 mark.

A common thread running throughout a number of entries, however, was the industry's newly found ability to harvest the data it had at its disposal and, using behavioural data and insights gleaned from other channels, segment it to within an inch of its life and offer deals and propositions that might have been deemed counter-intuitive 10 years ago.

At a time of great uncertainty within the marketing community worldwide, DM's trustworthiness is also a big calling card. Ad blocking, a murky digital advertising ecosystem, diminishing attention rates, ad fraud, poor attribution metrics and equally poor brand recall statistics on social media platforms, have all made the digital domain a tricky place to navigate for brands.

For their part, countless research reports have shown that consumers are very receptive to receiving personalised and relevant mail-shots. After all who doesn't like a special offer of a hefty discount or nice customer reward if you renew your business with the brand that wants to keep you as a customer?

While technology may have added an additional layer of sophistication, the fundamentals of direct mail haven't really changed and it still all boils down to well targeted campaigns, with a strong proposition, wrapped up in an engaging and creative manner.

The DM industry does of course face challenges and it is currently bracing itself for possibly the biggest challenge in years when the EU-wide General Data Protection Regulation (GDPR) will come into force in May 2018. GDPR will ultimately empower consumers with new rights when it comes to how their data can be used and breaches of the new regulation could result in firms being fined up to 4pc of its annual turnover.

While the stakes are high and it may clip the industry's wings a little, it has also proved to be resilient down through the years. Indeed there was a time when the early-day digital soothsayers predicted the death of DM sometime around 2000. Look how that turned out.

Thankfully, rumours of direct marketing's imminent demise are greatly exaggerated.

Contact John McGee at john@adworld.ie

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