THE PRIVATE LIFE OF MAIL
Jul 17, 2015
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