The Private Life of Mail at Advertising Week Europe - A critique by Les Binet & Peter Field

THE PRIVATE

LIFE

OF MAIL

JUST BECAUSE IT

FOLDS DOESN’T MEAN

IT’S SHIT

The Private Life of Mail

Direct mail in a digital world

Les Binet & Peter Field

Surely direct mail is dying?

18 Months of Research

• 12 Ethnography households

• 14 focus groups

• 99 depth interviews

• 213 Neuroscience / biometric participants

• 401 BrandScience’s ‘Results Vault’ cases

• 416 IPA Effectiveness Databank cases

• 1,000+ academic articles reviewed

• 9,504 respondents across our telephone and online quantitative surveys

7

Summary of the Report

• When used in integrated campaigns, it can provide a measurable media

multiplier effect

• Mail delivers top-ranking sales and acquisition growth and efficient

market share growth

• Mail drives successful return on investment

• Mail brings a brand into the home where it is kept, displayed,

and/or shared

• Its tactile qualities have powerful emotional and rational impact

that can be identified and proven

• Mail makes your message more memorable

Why are these findings so interesting?

Sale

s u

plif

t o

ver

bas

e

Time

Marketing can work in two ways

Sales activationTargeted, rational

Short term sales uplifts

Brand buildingBroad reach, emotionalLong term sales growth

Source: Binet & Field 2013

Rational communications work hardest in the short term

0%

5%

10%

15%

20%

25%

30%

35%

40%

Emotional campaigns Fame campaigns Rational campaigns

Sho

rt-t

erm

act

ivat

ion

eff

ect

s

Direct mail

is often

rational

But emotional campaigns work harder in the long term

0.0

0.1

0.2

0.3

0.4

0.5

0.6

Emotional Rational

ESOV Efficiency

Fame campaigns are the most efficient

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Fame campaigns Other campaigns

ESOV Efficiency

4:1

The two effects work in synergy

0%

5%

10%

15%

20%

25%

30%

Brand buiding Both Sales activation

Pro

fit

eff

ect

Campaign objectives

Can mail

play here?

Direct mail is mostly used as an activation channel

Impact on short-term response

41%

31%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Used Direct Mail No Direct Mail

% r

ep

ort

ing

very

larg

e

acti

vati

on

eff

ect

s

Impact on sales over the short and long terms

60% 57%

35%48%

0%

10%

20%

30%

40%

50%

60%

70%

Short-term 1-6m Long-term >6m

% r

ep

ort

ing

very

larg

e s

ale

s gr

ow

th

Campaign duration

Used Direct Mail No Direct Mail

Direct Mail is best as part of a multi-channel brand-building campaign

2.8%

6.4%

2.4%2.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

7 or less total media more than 7 total media

An

nu

alis

ed

SOM

gro

wth

Used Direct Mail No Direct Mail

So far this model has worked well

Direct mail has boosted

effectiveness considerably

Average market share increase

4.9%

2.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Used Direct Mail No Direct Mail

An

nu

alis

ed

SOM

gro

wth

Direct Mail boosts efficiency

0.96

0.33

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Used Direct Mail No Direct Mail

An

nu

alis

ed

ESO

V e

ffic

ien

cy

Direct mail boosts ROMI

1158%

320%

0%

200%

400%

600%

800%

1000%

1200%

1400%

Used Direct Mail No Direct Mail

Re

turn

on

mar

keti

ng

inve

stm

en

t

So what’s the problem?

The growing challenge faced by direct mail

Digital activation channels are closing the performance gap

1366%

960%

203%374%

0%

200%

400%

600%

800%

1000%

1200%

1400%

1600%

1998-2004 2005-2014

Re

po

rte

d R

OM

I

Used Direct Mail No Direct Mail

Digital activation channels have closed the activation gap

44% 41%

21%

41%

0%

10%

20%

30%

40%

50%

1998-2004 2005-2014

% r

ep

ort

ing

acti

vati

on

eff

ect

s

Campaign duration

Used Direct Mail No Direct Mail

Direct mail needs to strengthen its long-term effects

1.6 1.5

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Used Direct Mail No Direct Mail

Nu

mb

er

of

bra

nd

eff

ect

s re

po

rte

d

What does the report reveal about the long-term effects of mail?

• Mail is kept longer and shared more widely than we knew:– 17 days– 23% shared

• Mail’s tactile qualities imbue it with emotional ‘system 1’ potential

• Mail therefore encodes long-term memory more powerfully than we knew

• Not just an activation medium: long-term effects too

Direct mail needs to strengthen its long-term effects

• Long-term effects enhanced by stimulating formats and production

• Mail that only communicates information (‘activation’ mail) does not maximise long-term effects

To thrive mail needs to exploit its emotional & fame potential

A broader approach to direct mail

Designing-in long-term effects

Optus – business roaming charges

OBJECTIVE.

Convince Optus business travellers to use Optus

for international roaming.

TARGET.

High-end business travellers with Optus. Some

use Optus roaming, some don’t.

STRATEGY.

A relevant, high-impact DM piece delivering the

message “you can roam with Optus worry-free”.

TEST.

Plug pack vs. standard letter vs. (control) Bill

Message & SMS.

IDEA: WE GOT PACKING.

Everyone loves a mystery, just not when it comes

to roaming bills. We sent an unmarked box to

select business customers. It opened to reveal a

universal adaptor and wallet-sized roaming guide.

After all, lower roaming rates and Optus Travel

Packs, mean travellers will need to charge their

phone more.

RESULTS: THE LITTLE PLUG MADE A BIG IMPACT -

87% REVENUE INCREASE.

All messages led to a boost in roaming, Travel

Pack sales and average revenue per customer.

But it was the Little Plug pack that sparked the

biggest change, with an 87% increase in roaming

revenue from non-roamers.

A I L P GF R M G

Comparethemarket.com – acquisition incentive

EE – mobile data allowance

Evaluating mail in the digital age

Evaluating mail used to be easy

But the internet changed all that

Source: Dunham & Company 2014

Exposure to activity

Direct responses

Indirect responses

Direct salesIndirect sales

Incremental sales

Non-incremental

Non-incremental

1,000 extra direct salesBut 1,000 were going to buy anyway

40,000 of thosebought something

2,000 of thosebought direct

20,000 responded to it

1,000,000got a mailing

400,000 went to shop or website later

But 20,000 were going to buy anyway20,000 extra indirect sales

Direct response analysis overestimates direct effects and totally neglects indirect effects.

The direct response paradigm was always flawed

8% 11%

92% 89%

Brand A Brand B

% t

ota

l sale

s e

ffect

Direct response effect Other sales effects

Source: DDB Matrix econometrics

Direct responses can underestimate effectiveness by a factor of 10

Direct responses can be strategically misleading

0%

5%

10%

15%

20%

25%

30%

35%

Rational Combined Emotional

Very large profits

0%

10%

20%

30%

40%

50%

Rational Combined Emotional

Very large direct effects

“The more you tell, the more you sell”

• “Give actual figures, state definite facts”

• “Brilliant writing has no place in advertising”

• “Never seek to amuse” • “Ads are not written to

entertain”• “Don’t try to show off”• “Include a coupon”

Claude Hopkins was (partly) wrong

• Creative ads are more effective.

• Creative ads are 11 times more efficient.

• Emotional engagement is the key

Source: “The link between creativity and effectiveness” Peter Field, 2010

Sale

s u

plif

t o

ver

bas

e

Time

Direct responses

Indirect responsesEconometricsTest & Control

Source: Binet & Field 2013

Long and short term measurement

5%

10%

14%

38%

No support TV ads only Direct mail only TV and Direct MailAve

rag

e s

ale

s u

plift

in

As

da

du

rin

g t

es

t p

eri

od

Source: Cravendale case study, cited in "Marketing in the Era of Accountability" (Binet & Field, 2007)

The value of controlled tests: Cravendale

Econometrics can measure both effects

0%

20%

40%

60%

80%

100%

120%

1 8

15

22

29

36

43

50

57

64

71

78

85

92

99

10

6

11

3

12

0

12

7

13

4

14

1

14

8

15

5

16

2

16

9

17

6

18

3

19

0

19

7

20

4

21

1

21

8

22

5

23

2

23

9

24

6

25

3

26

0

26

7

27

4

28

1

28

8

29

5

30

2

30

9

31

6

32

3

33

0

33

7

34

4

35

1

35

8

36

5

% o

f in

itia

l re

spo

nse

Days after exposure

Typical Brand-Response Effect

Indirect responses through other channels

Directresponses

Small, but easy to

measure

Large, buthard to

measure

The ultimate long term metric: price elasticity

0%

2%

4%

6%

8%

10%

12%

0 1 2 3 4+

% R

ep

ort

ing

very

larg

e

pri

ce s

en

siti

vity

re

du

ctio

n

Number of very large brand effects recorded

The future for mail

• Like other “legacy media”, mail is not dying, but changing.

• Mail still plays an important activation role.

• But contrast with digital is revealing strengths that we took for granted.

• May lead to a bigger brand role for mail, and less emphasis on direct response.

• Regardless of role, evaluation must change.

• Go beyond linear response

• Look at indirect effects and longer time periods

• Use test and control, econometrics

• More research into long term, brand effects?Thank you