Magazine article Marketing

Direct Mail: Can Mail Ditch Its Junk Tag?

Magazine article Marketing

Direct Mail: Can Mail Ditch Its Junk Tag?

Article excerpt

Improved targeting, building awareness of opt-out initiatives and the uptake of recycling schemes could help repair the image of direct mail, writes Holly Acland.

The direct mail industry has had to develop a thick skin over the years 'Shit that folds' and 'stamp-lickers' are two of the terms one major advertising agency used to describe its below-the-line counterpart.

Direct marketing has, however, seen some improvement in its status. With its emphasis on measurement and targeting, it has become one of the success stories of the past five years, enjoying consecutive spend increases while other sectors have floundered, according to the IPA.

At least, that was the case before the BBC show Brassed Off Britain came along. Just as direct mail's star was in the ascendant, the TV programme, which asked consumers to vote for the thing they find most irritating, brought it crashing back down to earth. Direct mail topped the table with 24% of the vote, closely followed by banks and call centres.

Although critics were quick to point to the programme's sensationalist agenda, its hypocrisy (the BBC itself is a major user of direct marketing), and the amount of consumer spend that results from direct mail (it generated pounds 26.3bn of business in the UK last year), the damage was done.

So how can the negative image of the industry be improved? All media have to contend with companies making poor use of them and eroding their value, but it is a problem from which direct mail suffers acutely. It is no coincidence that banks were close to snatching the Brassed Off Britain title of biggest consumer irritant, trailing direct mail in the TV poll by just 0.6%. Financial services companies are by far the heaviest users of direct mail, making up eight of the top 10 biggest spenders in the sector.

MBNA heads the list with a staggering spend of more than pounds 66m in 2003 - an 11% increase on 2002, according to Thomson Intermedia.

Unfortunately, the business model traditionally followed by financial services firms, particularly for credit cards, is based on volume, with scant regard for creativity or targeting. As a result, credit-card mailings from companies such as MBNA and Capital One dominate the doormat and are largely responsible for the prevalence of negative images of direct mail.

'Only a tiny number of business sectors are responsible for the problem.

In direct mail, it is overwhelmingly a problem of the financial services industry's making,' says Rory Sutherland, executive creative director of OgilvyOne. 'This is an important distinction to make. It would be a waste of time to bother, say, the car industry with addressing the problem.

I may be wrong, but I don't think many people feel burdened by the volume of irrelevant car mailings or travel information they are sent.'

As long as enough people respond to meet acquisition targets, though, the volume approach favoured by financial services firms' will continue, regardless of damage to the brand or direct marketing as a whole. While no company is likely to change its marketing strategy for altruistic reasons, however, commercial reasons are another matter, and this offers some reason for optimism.

An increase in consumer apathy to poorly targeted direct mail will result in response rates dropping to the point where it is no longer commercially viable. This will rid doormats of credit-card mailings emblazoned with indistinguishable balance-transfer offers.

'There is no doubt that response rates are falling and return on investment is getting tighter,' says Mark Roy, group managing director of data quality specialists The REaD Group. 'The volume mailers will get to a crossroads where they will be forced to make changes - either by stopping direct mail altogether or doing it better.'

Given the advantages of direct mail, including its accountability and the amount of information that can be conveyed, it is unlikely that credit-card mailers will turn their back on it wholesale. …

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