Although direct mail response rates dropped nearly 25% in the past decade, mail campaigns still hold a significant edge over digital channels according to the Direct Marketing Association’s 2012 Response Rate Report.
Response rates for direct mail to an existing customer average 3.4%, compared with 0.12% for email, according to the report. Costs are also higher, which translates to roughly equivalent costs-per-sale/lead for direct mail, email, and paid search.
The DMA augmented its survey data with transactional data from Epsilon and Bizo, adding aggregated data on more than 29 billion emails, and more than 2 billion online display ads. DMA’s Response Rate Report was conducted through a survey that was emailed in April 2012. When the survey closed, DMA had received 481 usable responses.
“With transactional data, we have sample sizes in the millions, even billions of impressions and emails,” Yory Wurmser, DMA’s director of marketing and media insights, said in a release. “Transactional data has an edge on survey data for two reasons: First, sample sizes are big enough that it’s possible to break the data down into more industries, with more significant findings. Second, transactional data tends to be more accurate, since it takes the human element out of the assessment and shows exactly what happened.”
Even though direct mail is less effective in driving response than it was a decade ago, it’s still among the best media for generating overall response, Wurmser added. “This points to its likely continued role as an important medium in the marketing mix, even as the cost effectiveness of digital channels suggests that they will continue to gain budget share.”
Here are some other key findings in the report:
Transactional data show that only 6% of the actions following an online display advertisement occur immediately following a click, which indicates that click-through rate greatly underestimates the impact of online display.
Transactional data show that financial services emails had open rates above 30%, which ranked the highest among industries. Retail (apparel) had open rates averaging 14.7%, which was just below Publishing & Media (14.9%.
For emails, the highest click rate to open rate is for CPG (consumer packaged goods) at 46.5%.
Cost per order or lead for acquisition campaigns were roughly equivalent for direct mail ($51.40), post card ($54.10), email ($55.24), and paid search ($52.58).
Email had the highest ROI (28.5), compared with 7.00 for direct mail.
The highest response rates — nearly 13% to a house list — was produced by telephone marketing. Telephone marketing also had the highest costs: nearly $78 per order or lead for a house list, and $190 for a prospect list.
Jim Tierney ([email protected]) is a senior writer for Multichannel Merchant. You can connect with him on Twitter (TierneyMCM) and LinkedIn, or call him at 203-358-4265.