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For a long time, digital marketing has been considered the kingpin with its granular metric reporting, hyper-targeting capabilities, and lower price points than offline marketing.
But things are changing on the digital side. Google’s third-party cookies (which are finally breaking down) and Apple’s App Tracking Transparency initiative make targeting even more difficult. At the same time, CPMs are rising and users’ tolerance for digital advertising is decreasing, agency executives say.
“As with digital, the only constant is change,” said Laramae Lawson, executive vice president and director of insights and engagement at independent advertising agency GS&F. “Some of the great targeting we’ve become accustomed to won’t be as easily accessible as before.”
Enter “Direct Mail”.
The industry is currently facing rising digital advertising costs along with tightening data privacy regulations, forcing marketers and advertisers to rethink their digital strategies. Agency executives said they are encouraging all clients to diversify beyond digital into traditional channels such as direct mail.
Clients and their agency partners aren’t spending money on direct mail, at least not yet, but that’s starting to change. While offline spending has faced a significant decline, direct mail has steadily increased by 1.5% and accounted for 382% of U.S. offline marketing spending this year, according to the annual U.S. Spending Report from strategic consulting firm Winterberry Group. It will account for billions of dollars. Agency executives say Google’s removal of cookies has made it easier to persuade clients to diversify their media mix more, including direct mail.
“Digital response rates continue to decline, click-through rates continue to decline, and cost per acquisition continues to decline.” [increase] “Digital conversion rates continue to decline, making direct mail even more competitive with digital,” Jose said. Mr. Villa is president of Sensis Agency, a cultural marketing agency.
On average, clients spend more than 60-70% of their advertising budgets on digital advertising, he added. But spending on traditional media is starting to rise, especially for brands looking to stand out in front of millennial shoppers. (He did not disclose the specific amount spent.)
According to five executives Digiday spoke to for this story, the customers most interested in direct mail are those in the B2B space, along with big box stores, home, fashion, financial services and insurance companies. .
“In many places, especially in this digital environment, it’s becoming very, very difficult to actually get noticed by someone,” said Ned Brown, chief creative officer at Badder Ladder Agency. Told. “In other words, it is easier to convince them that: [direct mail] It’s better now than it was two or three years ago. ”
A person’s physical mailbox is valuable real estate, agency executives say. Impressions from direct mail campaigns are likely to be of higher quality than digital campaigns because people are more likely to engage with mail at home or at work instead of scrolling through digital banners or sponsored posts on social media. there is. As the digital advertising market becomes increasingly crowded, online users may be less likely to engage with digital banners and sponsored posts, executives say. Direct mail campaigns are a way to cut through the noise, executives said.
Advertisers can get a conversion rate of 1% to 5% with direct mail per villa. According to Shopify, the average ecommerce conversion rate is around 2.5% to 3%. Adding digital components such as QR codes to each run makes measurement and attribution easier to measure.
Historically, direct mail has had a bad PR reputation. Mailing lists aren’t always easy to obtain. They are also labeled as expensive due to postage and printing costs, and their tracking and measurement capabilities pale in comparison to their digital counterparts.
The silver lining to data signal loss is that first-party data has become like gold in the industry. (Retailers stand to profit from peddling this data, leading to the explosion of retail media networks.) As brands accumulate internal data, direct mailing lists become easier to manage. executives speak.
Meanwhile, the return of QR codes and the U.S. Postal Service’s innovations to improve mail tracking have made it easier than ever to add metrics to direct mail, adding a digital component to traditional offline channels. When someone receives direct mail, marketers can use that data to digitally retarget them. Marketers can surround their direct mail campaigns with digital strategies to increase their effectiveness.
When it comes to cost, direct mail doesn’t beat claims. An advertiser can expect to pay him $0.50 per folded direct mail piece, including paper, printing, and postage costs. Additionally, full-size catalogs cost him $0.80 each, including paper, printing and mailing, said Polly Wong, president of marketing agency Belady Wong.
“The cost of a single direct mail impression is 30 to 40 times more expensive than a meta impression,” she said. “People still pay attention to it because it’s very qualified and targeted.”
For reference, the average CPM rate for Meta this year is $7.62, according to Gupta Media. But as digital costs continue to rise, executives say the gap between direct mail and digital costs is narrowing.
Still, the transition to a more balanced media mix will not be easy for agency executives, especially as marketing budgets remain under intense scrutiny and return-on-investment metrics are essential. Clients are hesitant to commit because offline channels don’t offer the opportunity to track at the granular level that digital channels do.
“[Clients] I have a hard time leaving it sometimes [digital advertising] Because they want instant gratification,” Lawson said. “They want to understand what the engagement was, what the reporting was, click-through rates, everything.”
Still, a balance needs to be struck, agency executives say. Digital marketing has its challenges, but it’s not going out of style anytime soon. This means marketers and advertisers need to rethink the role of digital advertising in their media and marketing mix to align online and offline channels. This has been discussed since at least the last year.
“Both online and offline channels will continue to see the same modest growth, driven by economic impacts, overall business impacts, and spending on a larger marketing mix,” Wong said. “I actually think he’s looking at single-digit growth and spending across digital channels, online and offline.”
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