People may not need to really lick stamps any more but they’re still sending and receiving mail. Often they receive mail with joy. Consider how things have modified.
“Thirty years ago, whenever you received an email you bought excited. Your mailbox was just stuffed with junk mail on the time.” That can be your physical mailbox, in fact. “Now it’s form of the other. The mailbox feels pretty empty as of late, for probably the most part, and your email is chock-full.” Remarks from Jacob Ross, CEO of programmatic direct mail vendor PebblePost.
Ross admits he’s a proponent of direct mail marketing but tells us: “If what shows up in your mailbox is relevant and respectful, then you definitely’re likely to have interaction with it. We’ve seen that across the board, irrespective of what the demographic is. People are attentive to direct mail, orders of magnitude greater than they’re with email.”
S/he wrote me a letter
Of course, no one desires to receive postcards or catalogues, let alone packages, which can be irrelevant. Nor do they need to receive mail from the identical brand each day. But getting meaningful mail (and sending personal mail) are fun again. Who doesn’t keep watch over USPS Informed Delivery to see what’s coming?
It’s not only the older generation either. Recent research from Stamp.com shows 65% of U.S. consumers still send letters and packages with nearly half (48%) of Gen Z, teens and twenties, sending mail one to 2 times per 30 days. That’s an audience that may well be vulnerable to receiving mail from brands so long as it meets the best criteria. “Relevant and respectful,” as Ross said.
Which leads us to certainly one of the enduring merits of direct mail. Unlike an ad seen online or in a mobile app (or in a game), it’s persistent. “On average, a chunk of mail that’s brought right into a house sits there for as much as two weeks,” said Ross. That’s if it’s relevant; if not it goes straight from the mailbox to the recycling bin. “But if you happen to get something relevant you’re taking it into your own home,” he went on. “That’s the great thing about direct mail. It’s certainly one of the one channels where consumers select to have interaction with the offer, bring it into their house and make the most of it.”
Dave Fink, co-founder and CEO of Postie, underlined the breadth of the channel. “It is a extremely effective channel across the widest ranges of demographics and product verticals,” he said. “This is a channel that has been around for 100 years.”
When Postie started off almost eight years ago, young audiences were throughout mobile apps and Instagram — and TikTok was just getting began, he said. The Postie team investigated whether there was a selected set of demographics that direct mail worked best for. “When we got to a certain level of scale,” he said, “we checked out conversion level by age. Guess what we found? Highest conversion rate by decade: 20s. If anything, we were biased against that being the likely consequence, but the info spoke for itself.”
It’s not only for young people, in fact. Fink recalls, some years ago, reading a top 10 tips on selling to vital people. One of them: “Important people love getting FedExes,” said Fink. “The vital thing there’s addressability, which plays into the hands of channels like direct mail. How do I get attention from this individual, or this series of people who hold these roles at this company and may very well be influential? They’re humans.”
That’s essentially the idea behind Sendoso’s offering: a personalised gifting automation platform, primarily for B2B marketers.
Humans like getting (relevant) packages. They also, increasingly, just like the experience gamified. What the United States Postal Service is doing with Informed Delivery really builds on what Amazon and other marketplaces have been doing for some time. “Eight dollar book, a pair of socks. And I get that notification that Amazon just dropped it off — it makes me just a little giddy. There’s just something magical a few package showing up.”
Direct mail marketing in 2024
The state of direct mail marketing in 2024 is healthy, in line with a report (registration required) from direct mail marketing automation company Lob. Based on a survey of 250 marketing professionals at large North American corporations, Lob reported that:
- 84% of marketers say direct mail has the very best ROI of any marketing channel.
- It has the most effective conversion rate (85%) and response rate (84%).
- 82% are increasing their investment within the channel (a striking increase from 58% in 2023).
Additionally, it’s a channel that works across “nearly any product or vertical,” said Fink, naming apparel, financial services, insurance, automotive, home goods and services as examples. “Is it scalable?” he asked. “It reaches every household, every individual within the United States.” The channel, that’s, not every mailpiece.
The rise of data-driven direct mail marketing
There’s still direct mail marketing on the market that isn’t data-driven and you may often tell whenever you receive it. Are you a veteran? Are you a Medicaid recipient? No and no. PebblePost and Postie, founded in 2014 and 2017 respectively, were early proponents of putting data at the center of their direct mail operations; indeed, PebblePost has at all times called its offering “programmatic direct mail.”
It began, said Ross, with retargeting. “We got really good at that,” he said. It tied digital and direct mail together. As PebblePost founder Lewis Gersh told me almost 10 years ago, a customer can go to a retailer website, take a look at some shirts and blazers, after which leave without purchasing — and a 4×6 postcard with a proposal on an apparel purchase may very well be sent out inside 24 hours of her visit.
But it became clear to PebblePost and the adtech space generally that, while retargeting is critical for lower funnel activity, marketers are also really trying to drive acquisition and retention. “Expanding our product line became really vital,” Ross said.
PebblePost launched the primary version of its Lookalikes product in 2020. “We said to brands, go find us your best customers and we’ll find more folks that appear like them. We needed to do it very well because direct mail is pricey when it comes to media, a thousand times dearer than a banner ad. You have to actually perform.”
Lookalikes has been fine-tuned over the previous couple of years, said Ross. PebblePost recently launched an enhanced version of the product that’s “at all times on” and provides continuous audience optimization. “We try to seek out prospects that can perform almost in addition to retargeting does, that’s the goal,” Ross explained.
Underlying Lookalikes is the PebblePost Graph which now covers some 99% of U.S. households and includes browsing and transactional data. All PebblePost clients participate. They add their first-party data to the Graph (where it’s disaggregated and anonymized). Models built from the graph do not need greater than 5% of information from anyone brand — “We have the size that we are able to do this,” Ross said.
There are parallels with the best way digital approaches lookalikes, but some vital differences too. “We use real customer data from brands,” said Ross. “They’ll send us like 50,000 records as a segment of their best customers — highest frequency, biggest purchasers. What we do is use the Graph and 4 connected models to discover who the most effective prospects are from your entire U.S. population.” The models are based in intent, offline transaction data, mail response data, demographics and psychographics. Lookalikes are those prospects that rating high across all 4 criteria.
Dig deeper: Postie launches CRM Optimization for direct mail
Direct mail aligns well with retail media networks
One major focus of Postie right away is to point out how well direct mail marketing performs in alignment with the booming retail media network space. The aim is to make direct mail a core component of what retail media networks can provide to their brand client.
“As we thought in regards to the value proposition of direct mail,” said Fink, “much of it falls into two different components.” First, data and audiences. “The retailer doesn’t typically share transaction-level data, PII, directly with brands. But brands have the chance to focus on those consumers in a really direct way through retail media networks.”
Direct mail is an addressable channel, in fact, targeted on the household level and individual-in-the-household level. “Direct mail gives these retailers a extremely powerful, highly targeted ad unit that brands can’t access outside them because they need that retail data,” Fink explained. “They must know who within the retail consumer base is definitely buying within the category that they’re selling.”
The second component is the brand story. “If you will have the chance to share your creative, you will have credibility and authenticity.”
Of course it’s possible so as to add branding to digital experiences too; indeed, it’s the norm. “It’s a yes…and,” said Fink. “We’re giving brands a substitute for the ten thousand pound gorillas Meta and Google, but we’re not saying don’t spend on Meta and Google. Co-branded media and digital is great, you have to be doing that, however the weightiness of direct mail, the historic proven return on ad spend that direct mail consistently provides — it becomes an extra channel.” See the Lob data above. “It requires good, precision targeting built on interesting data sets and what’s more interesting than transaction-level data owned by a retailer which you can only access in partnership with that retailer?”
It’s not your grandparents’ direct mail marketing
For Ross, direct mail just isn’t just an old channel that also offers value. It will be seen as leading edge: “Programmatic direct mail takes the most effective of digital and direct mail and combines them, just as CTV has taken the most effective of digital and linear television; streaming has done that with radio,” he said.
It’s also an area ideally suited to larger brands. Smaller businesses built on Facebook and Google Search may not have the size for this channel. “We want brands which have already demonstrated a stable business model and might really scale what they’re doing,” said Ross. “So today our biggest brands are Hilton, Gap, WeightWatchers — these guys are spending tens of millions of dollars on this channel yearly since it moves the needle.”
At the identical time, Fink acknowledges that it’s a channel that necessarily relies on some aspects it might’t entirely control. “One is the U.S. Postal Service’s ability to efficiently deliver our ads. There’s sometimes been just a little little bit of pain and it’s put more pressure on the optimization on the info side to offset among the cost increases. More recently I feel they acknowledged that they pushed just a little too far which is absolutely welcome feedback.”
He’s optimistic about logistics for the foreseeable future. Please, deliver the letter, the earlier the higher.
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