direct mail advertising

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Direct mail

Direct mail, also known as junk mail, advertising mail or admail, is the delivery of advertising material to recipients of postal mail. It forms a significant subdiscipline of direct marketing. Some organizations attempt to help people opt-out of receiving advertising mail, in many cases motivated by a concern over its negative environmental impact.

Direct mail includes advertising circulars, catalogs, CDs, “pre-approved” credit card applications, and other commercial merchandising materials delivered to both homes and businesses. It may be addressed to pre-selected individuals, or unaddressed and delivered on a neighbourhood-by-neighbourhood basis.

Postal services

Postal systems have enacted lower rates for buyers of bulk mail permits. In order to qualify for these rates, marketers must format and sort the mail in specific ways - which reduces the handling required by the postal service.

Income from advertising mail represents a significant and growing portion of some postal service's budgets, and it is a service actively marketed by them. In Canada, addressed and unaddressed advertising mail accounted for 20% of Canada Post's revenue in 2005, and the share is increasing. Postal services employ the terms advertising mail, admail, and direct mail, while generally avoiding and objecting to the pejorative term junk mail.

In many developed countries, advertising mail represents a significant and growing amount of the total volume of mail. In the United States, direct mail comprised 29% of all mail in 1980 and 43% in 2003.

Direct mail marketing

Design and format

Direct mail permits the marketer to design marketing pieces in many different formats. Indeed, there is an entire subsector of the industry that produces specialized papers, printing, envelopes, and other materials for direct mail marketing. Some of the common formats include:

Catalogs: Multi-page, bound promotions, usually featuring a selection of products for sale.
Self-mailers: Pieces usually created from a single sheet that has been printed and folded. For instance, a common practice is to print a page-length advertisement or promotion on one side of a sheet of paper. This is then folded in half or in thirds, with the promotional message to the inside. The two outside surfaces are then used for the address of the recipient and some "teaser" message designed to persuade the customer to open the piece.
Clear bag packages: Large (often 9x12 or bigger) full-color packages sealed in a clear, plastic outer wrap. The contents show through the clear bag, giving the potential for maximum initial impact. Clear bag packages can be extremely effective and are very affordable based upon the campaign open-rate.
Postcards: Simple, two-sided pieces, with a promotional message on one side and the customer's address on the other.
Envelope mailers: Mailings in which the marketing material is placed inside an envelope. This permits the marketer to include more than one insert. When more than one advertiser is included, this is often called "marriage mail". Valpak is one of the largest examples of a marriage mail service.
Snap Mailers: Mailers that fold and seal with pressure. The sides detach and the mailer is opened to reveal the message.
Dimensional Mailers: Mailers that have some dimension to them, like a small box.
Intelligent Documents: Programmable mail pieces built dynamically from database information, and printed digitally for faster production.

Advantages and disadvantages

Many people respond positively to direct mail advertising and find useful goods and services on offer. Traditionally, this was more true in rural areas where people had to travel many miles to do their shopping and direct mail and mail order shopping was a major convenience. However, some people dislike it, in the same way as with telemarketers' calls and e-mail spam, and some jurisdictions like the US have laws requiring junk mailers to withhold their offerings from residents who opt out.

Advantages for marketers include the following:

Targeting - Historically, the most important aspect of direct mail was its ability to precisely target previous customers. If a suitable list was available, it could do a good job of targeting prospects.

Personalization - Direct mail can address the customer personally and be tailored to their needs based on previous transactions and gathered data.

Optimization - Because of its direct accountability, direct mail can be tested to find the best list; the best offer; the best timing (and many other factors). Then the winning tests can be rolled out to a wider audience for optimal results.

Analysis - The bulk mailing is large enough to allow statistical analyses. For example the results can be analysed to see in detail the performance of individual offers in say a squinch report which shows sales per square inch. With suitable media or source codes, the performance of lists can be captured. These enable better selection of offers and lists for future mailings.

Accumulation - Responses (and non-responses) can be added to the database, allowing future mailings to be better targeted.

Advocates make the following arguments ...

Efficient use of advertising dollars
Highly selective, targeted and personalized
Flexible
High quality reproduction
Response easily measured

87% of consumers are either “very” or “quite” satisfied with the products they buy through Direct Mail
56% of consumers said that value for money was the main benefit of buying through Direct Mail, whilst 63% said convenience.

Disadvantages include:

Cost - The cost per thousand will be higher than almost any other form of mass promotion (although the wastage rate may be much lower). Also, development costs in database acquisition/development. It is however important to note that despite the production and development costs, direct mail can be very profitable, if executed correctly. Lastly, when comparing different media costs, return on investment is the best measure.

Waste - Large quantities of paper and plastic are thrown away (see below).

Alienation - Some recipients resent direct marketing being "forced" upon them, and boycott companies that do so. Moreover, they may obtain Prohibitory Orders against companies whose direct marketing mail they find offensive.

Targeting

Advertisers often call direct mail "targeted mailing", since mail is usually sent out following database analysis. For example a person who purchases golf supplies may receive direct mail for golf related products or perhaps for goods and services that are appropriate for golfers. When direct mail uses database analysis, it is a type of database marketing.

Advances in computing and communications technology have significantly impacted the direct mailing industry in recent years. As computers become more powerful and databases become larger, new opportunities arise for direct mail companies to perform more in-depth processing of their mailing lists. Mailings can be targeted based on location and demographic data. This allows mailings to be targeted more specifically and potentially increases response rates. Web sites are appearing which allow clients to create their mailing lists interactively using map-based interfaces.

Personalized URLS

Personalized URLs, also known as PURLs, are personalized websites used in conjunction with direct mail that are designed to gather information about the person that visits it. Marketing companies find this useful when testing marketing methods and response rates.

Personalized URLs are generally printed on the direct mail piece in the format JohnSample.domain.com or domain.com/JohnSample. They recognize the individual who is visiting the site and can welcome them by name. They also have the ability to obtain and disperse detailed and specific information pertaining to the individual looking at the site.

Personalized URLs are assigned to individual recipients based on the direct mail campaign database and are included either as the only variable or as one of several variable fields in the larger variable data printing communication. When recipients of the direct mail piece log onto their PURL, the information from the campaign database is used to tailor the web page experience to that specific recipient. They are referenced by name, and the graphics, text, offers, and other information on the page can also be tailored to them personally, based on the information in the marketer's database.Studies have shown that people prefer to get additional information online, so Personalized URLs create a seamless way to connect the printed piece to the Web.

Business-to-Business Mailings (B2B)

Business products and services have long used direct mail to promote themselves. Traditionally, this worked in one of two ways. As a direct sale, therefore precluding the use of a salesperson or a retail store, or as a method of generating leads for a salesforce. The former method was ideally used by products that were easy to sell, were familiar to the prospect and needed no demonstration. The latter method was used for large ticket items or for those that needed demonstration for example.

Opting out

Several organizations offer opt-out services to people who wish to reduce or eliminate the amount of addressed advertising mail they receive. In the United Kingdom, the Mailing Preference Service allows people to register with them for removal from mailing lists. In the United States, the Direct Marketing Association's Mail Preference Service functions similar to telemarketing do not call registries, though mailer participation is voluntary. Several nonprofit organizations, such as 41pounds.org, offer opt-out services as well.

In response to a US Supreme Court ruling (Rowan v. Post Office Dept.), the United States Postal Service provides enables an applicant to obtain a Prohibitory Order, which gives consumers the power to stop non-governmental organizations from sending them mail, and to demand such organizations remove the consumers’ information from their mailing lists.

In Canada, the highly-publicized Red Dot Campaign offers advice on reducing unaddressed advertising mail. The campaign focuses on advertising the Canada Post policy to respect "No Junkmail" signs, noting that this policy is not promoted by Canada Post itself. The name "red dot" refers to an internal marker used by Canada Post to indicate which households do not wish to receive unaddressed admail. The UK Royal Mail also offers an opt-out service, though it sparked public outrage by warning that unaddressed government mailings could not be separated from advertisements, and those who opted-out of the latter would stop receiving the former as well.

Several websites critical of junk mail have guides for people interested in reducing the amount of junk mail they get, such as the Center for a New American Dream and SimpleStop

Environmental impact

Several of the above organizations, as well as environmental groups, express concern about the environmental impact generated by junk mail.

In the US, the Environmental Protection Agency estimates that 44% of junk mail is discarded without being opened or read, equaling four million tons of waste, with 32% recovered for recycling. Further, the Ohio Office of Compliance Assistance and Pollution Prevention (OCAPP) estimates that 250,000 homes could be heated for a single day's junk mail.

In the UK, the Minister of State responsible for the Department for Environment, Food and Rural Affairs estimated that direct mail promotions accounted for between 500,000 and 600,000 tonnes of paper in 2002, with 13% being recycled. The government and the Direct Marketing Association (UK) together agreed on recycling targets for the direct mail industry, including a goal of 55% by 2009, though the DMA's latest estimates are that the industry will fall well short off this mark.