October 24, 2013

Direct mail response rates beat digital!

DMA: “Direct mail response rates beat digital”

Despite the perception in the marketing industry that direct mail and telemarketing are less effective than digital channels, the Direct Marketing Association (DMA) has found that direct mail boasts a 4.4% rate, compared to email’s average response rate of 0.12%, says Yory Wurmser, director of marketing and media insights at the DMA.

Depending on how one crunches the numbers, direct mail has a response rate of up to 10 to 30 times that of email — and even higher when compared to online display, Wurmser continues.

Using transactional data from Bizo and Epsilon, the DMA analyzed more than 29 billion emails and 2 billion online display impressions to track consumer actions both immediately following a click and in the days and weeks after being exposed to an online ad.

“Overall for display, only 6% converted as a result of the immediate action of the click,” Wurmser says, meaning that 94% of conversions happen at a later date — an important finding, considering that the success of display’s impact is generally judged by its click-through rate.

Despite this news, Wurmser notes that in the nine years the DMA has been doing its response rate report, the rate for direct mail, while still “the better channel than any other out there right now,” has gone down 25% overall.

“Yes, there has been a reduction in the response rate level from a direct mail perspective,” he says. “But, looking at it strictly in terms of response rate, direct mail still outperforms digital.”

However, looking at the playing field from an ROI point of view, email is more cost-effective than direct mail or telemarketing. The report found email had the highest ROI, at $28.50, compared the $7 for direct mail.

As to why direct mail remains such a strong channel while simultaneously declining in terms of overall response rate, the reason could be related to the fact that consumers are — now more than ever — continually bombarded by digital messages they don’t want.

“Because of the proliferation of emails and the onslaught of display ads everywhere, there is an advantage of going through direct mail,” Wurmser muses. “Direct mail in a way has become less cluttered.

The DMA’s report was based on data collected through an April 2012 email survey and an analysis of transactional data provided by Bizo and Epsilon.