Contrary to Mayan prophecy, we’re betting the world won’t come to an end in 2012. So you can chuck plans for that everything-must-go Doomsday Sale and focus instead on budgeting for the new year.
But while the apocalypse may be a no-show, a shaky economy and a series of U.S. elections should make marketing more exciting than usual in 2012 as businesses duke it out for the affections of a recession-dazed public.
Hoping to get a clearer understanding of what to expect this year, Deliver reached out to a wide range of marketing veterans, consultants and other experts to discuss the immediate future of direct mail and get their prognosis for the coming year. Many we interviewed believe direct mail could see some stiff challenges, but many also believe that mail is uniquely positioned to play a major role in a national economic resurgence in 2012.
Following a 2009 downturn, direct mail bounced back in 2010 and has sustained a feisty comeback. According to the Direct Marketers Association, direct mail expenditures in 2011 grew to just more than $50 billion, a 4.6-percent increase. Barring any unforeseen economic catastrophes, mail is forecast to rise at least 3.6 percent annually until 2014. By comparison, a recent Winterberry Group report found decreases in ad expenditures for other traditional media including television, radio and newspapers.
Considering these and other indicators, it’s no wonder that demographers like KGC Direct president Kenneth W. Gronbach are bullish on mail.
“I think you’re going to see the return of good, quality direct mail in 2012,” Gronbach effuses. “There’s so much new technology now. You can marry the mail piece to your digital channels. This could be the genesis of the ‘new mail.’”
Who’s using mail?
In recent years, credit card companies, insurance agencies and telecoms led the charge in direct mail spend, outpacing sectors like technology and travel. The trend should continue in 2012. In fact, says Mintel senior VP Andrew Davidson, direct mail credit card offers may actually surpass insurance offers, becoming the rising tide that lifts all boats. “Even if the other sectors remain relatively flat, direct mail should expand across [other] sectors next year,” Davidson says.
With high-stakes elections on tap this year, expect politicians to wage war at the mailbox. Analysts at PQ Media predict political media spending will surpass $5.6 billion — an increase of nearly 25 percent over the 2010 level, and 35 percent compared to the 2008 election year.
“We’re going to have significant amounts of campaign dollars devoted to fundraising and getting out the vote,” says Jerry Cerasale, senior vice president of the Direct Marketing Association. “From the middle to near the end of the year, we should see direct mail volumes for political candidates becoming rather large.”
On the retail side, experts are watching the automotive industry as U.S. car sales continue to rise. Gronbach of KGC Direct also predicts “huge” growth in apparel company catalogs. “The frontrunners of Gen Y are 26, 27 years old, and those are the years when you spend the most on plumage,” Gronbach notes.
Such predictions are welcome messages for online retailers like Zappos, which are increasingly using their branded catalogs to support online operations. “The catalog is a good vehicle to reach customers who might not be completely comfortable with ordering online,” says Michael Fellner, e-mail marketing manager for the shoe and clothing retailer. “It’s about reaching that segment of customers. That’s the main goal of our direct mail efforts.”
What’s the message?
With marketers wooing a more frugal public, consumers can expect offers and messaging to become more competitive, continuing a trend from 2011. “In the credit card segment we’re seeing maybe the best offers ever seen in terms of rewards, benefits and features that are provided along with the credit card itself,” says Mintel’s Davidson. He points out how one bank offered customers $300 just to sign up for its credit card. Continues Davidson: “You’re starting to see incentives so enticing that you might as well sign up for the card — regardless of if you’re ever going to use it.”
Pepperdine University adjunct professor of marketing John Nolan believes businesses and others who use direct mail, such as politicians, might be more persuasive in 2012 if they play up their ethical bona fides in their direct mail messaging, like guaranteeing customer privacy or having a solid record of environmental activism or compliance.
His suggestion is backed by reports such as one 2011 survey from Mintel that found that 72 percent of consumers of financial products said they feel good about working with financial services firms that invest in eco-friendly companies.
“As a business school professor, I am seeing erosion in the long-held belief that the primary responsibility of management is to increase shareholder value,” Nolan says. “That credo is being replaced with a renewed sense that responsible corporate citizenship is vitally important to today’s consumer. Utilizing recycled and biodegradable materials and employing that in your message should affect loyalty to your brand.”
Mail and Millennials
KGC Direct’s Gronbach predicts that smart marketers in 2012 will leverage direct mail’s traditional trustworthiness to help win over perhaps the most coveted demographic group of all, young U.S. consumers. There are more than 100 million “Millennial” consumers (those born 1985 to 2004) in the United States and, according to research, they purchase at rates of about 500 percent more than their parents’ generation (in adjusted dollars).
Ironically, when it comes to marketing, tech-oriented Millennials are also indifferent to mobile, social and other digital tactics. “You can’t reach (kids) on their phones or Facebook, because those are not branding mediums,” Gronbach says.
However, Millennials and other demographics are very receptive to direct mail. In fact, research indicates that direct mail actually optimizes a company’s digital operations by serving as a sort of Pied Piper. A 2011 GI Insight study found that 53 percent of 18- to 24-year-olds had visited a website after receiving a promotional direct mail piece.
Another study conducted by Brand Science found that combining direct mail with other marketing activities increases campaign payback by up to 20 percent.
“If you think about social and compare it to direct mail, the click-through rates on a lot of social ads tend to underperform,” says Alex Feldman, manager of Global Forecasting for MagnaGlobal. “If you think about conversions, direct mail is much more successful. It has a dual function. There’s that performance aspect, but there’s also brand building.”
Dave Scott, CEO of online lead list generator Marketfish, believes savvier marketers will opt to use more direct mail — blending it with technological innovations such as QR codes — instead of solely investing in oversaturated digital channels.
Scott says overcrowded e-mail queues only add to the appeal of mail: “Even though direct mail seems old school, it’s really sexy for the marketer, the reason being that there’s less clutter. So you get more effective impressions.”
Getting personal with mail
OK, so a growing number of experts agree that direct mail excels at maximizing brand awareness and leading consumers to the digital waters. But how might marketers use mail in 2012 to persuade consumers to actually partake and purchase their products and services?
A 2011 study of African-American consumers conducted by the Hunter-Miller Group offers some clues. The research found that participants were more likely to open or read mail specifically addressed to the consumer (i.e., no impersonal “to our friends at …” addressing). Study participants also favored envelopes and postcards featuring an impactful message about new products or services that have specific benefit to the consumer.
“Especially with postcards, we are finding that people are most likely to pick it up and read both sides if it’s personalized,” says Pepper Miller, president of Hunter-Miller.
“There’s definitely a trend going on from broadcasting to narrowcasting,” says Dan Kohn, vice president of corporate marketing for mail solutions provider Pitney Bowes. “More and more, in every media, mail leads the way in moving toward more targeted, more personalized, and more tailored relationship building. That’s something that we can do better now than ever.”
Of course, this isn’t news to Duct Tape Marketing president John Jantsch. A small business consultant and longtime direct mail advocate, Jantsch predicts that direct mail should definitely remain in your multichannel mix. “With each passing year it gets cheaper and better to use direct mail,” Jantsch says. “It’s the one advertising medium that you really can control.”
Want to know more about what technologies will make mail even more relevant in 2012? Read “Modern Mail.”Integrated Marketing, Marketing Tips, Prospecting, Targeting, Technology, Trends