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Why direct mail isn’t going to lie down and die any time soon – if ever. And anyhow, what is the best plan for intelligent marketers?

In a recent issue of this journal a writer suggested that direct mail is going to to fade away and be replaced by e-mail. How likely is this?

Well, as Sam Goldwyn observed in one of his better lines, “Predictions are difficult – especially about the future”, but this does not diminish the enthusiasm with which people keep trotting them out.

Moreover, as all good marketers know, human beings tend to believe what they want to believe, so such predictions often come from people with a vested interest in their coming true.

For example only a few weeks ago a journalist for a Dutch on-line magazine asked me how long it would take for e-mails to kill direct mail. “Don’t hold your breath,” I advised him - and here are a few reasons why, which we can all relate to.

Last year, with 25,000 close friends, I saw the Rolling Stones in Sydney. How did this happen? After all, didn’t people predict that records would put an end to live performances? Come to think of it, didn’t they say TV would kill the cinema, and before that, cinema would be the death of live theatre?

Actually, media rarely destroy each other; they complement each other. How many times have you printed out an interesting e-mail or website? And Consider the phone services needed to help people struggling on the internet.

How many significant means of communication have totally vanished in the last thousand years, except rather specialist things like the heliograph, the semaphore and the Morse code? Of course, some never took off - like the video disk, which I well recall an American expert telling me would replace the printed catalogue.

True, the illuminated manuscript has not been in much demand since printing took hold, but I see the Silver Reed typewriter still sells by mail order. The dear old fax, hardly a major medium, is still with us and gets results even though one would think e-mails might render it redundant.

But the predictions keep coming – and will keep doing so. Seven years ago Gartner issued a report gleefully headed "E-mail Savings Threaten a $196.8 Billion Direct Mail Market". By 2010, they said, "direct mail will almost be a hardly-remembered relic". (I love the "almost”).

As another wit, Mark Twain, said on reading his obituary in the paper, “Reports of my death are greatly exaggerated.” Nevertheless, for the first time I can remember, volumes in this country have been dropping, and these charts show it clearly. Will this continue till the old direct marketer’s warhorse drops dead in his traces?

The Royal Mail in 2006 said direct mail volumes continued to fall in Britain with more than 5 billion items sent - a dip of 2.1 %.

Statistics, I once read, are an inaccurate way of stating half-truths exactly. And they seem to vary depending on where they come from. So it’s no surprise that more recently Data Quality News stated that spend rose last year, reaching £2.3 billion - a 12.2 % share of U.K. advertising.

They said, “That represents a strong return in a difficult year for advertising as a whole and for direct mail in particular, which had to deal with changes to the U.K.'s postal pricing system.” (The last bit is a euphemism for raising prices - Royal Mail’s alternative to a marketing strategy)

What is actually happening? And what can we assume about direct mail? Leonora Corden, head of market development at Royal Mail believes the recent slow down is the result of firms “improving their targeting to create even more relevant and personal offers.”

Judging by the number of duplicate mailings we get, I wonder; but she may be right. Amidst the slight slowing in the use of the medium, one group is swimming against the tide – financial marketers. Their expenditure is up. According to a survey by Neilsen Market Research for Marketing, 85 % of Britain's direct mail pieces from banks and credit card firms are opened, with people more likely to read mail from a bank than any other type. (Sheer terror, perhaps).

Those surveyed said they throw away mail that’s wrongly-addressed or with spelling mistakes. What surprises research produces! The study suggests finance companies’ success is linked to the use of more sophisticated data to identify likely customers. Arjan Duijk, marketing director of Capital One, said: "We send to less than 15 % of the mailable population in the UK."

But to whatever degree direct mail is faltering, e-mail marketing is certainly growing – fast. Will it overtake it? If so, why? If not, why not? And anyhow, what should intelligent marketers do?

Well, like it or not, what happens in the U.S. usually happens here eventually. So it’s worth looking over there. Last November, the website MediaPlannerBuyerDirect revealed under the heading Direct Marketing No Longer Such a Snoozer that marketers sent more than 114 billion pieces of direct mail in the last year, an increase of about 15 % from five years before, according to the USPS. And last year, for the first time, bulk mail exceeded first class mail.

The direct mail industry there is alive and growing, said The New York Times - marketers were expected to spend $59.6 billion on it last year. That was an increase of $15 billion since 2000 and of more than $4 billion in the previous year alone, said Robert J. Coen, the doyen of media forecasting.

In 2006, marketers spent about $70 million on television spots, $12 billion on online advertising and $1.5 billion on email marketing. Maybe it’s worth re-reading those figures, because however fast e-mail spend is growing it is still dwarfed by direct mail.

One seemingly sound basis for Gartner’s belief seven years ago was that "the response rate from targeted e-mail advertising is much higher than direct mail." This is no longer true. So their predictions have turned out to be a little too sweeping.

Nevertheless they had good reason for thinking what they did. Here is why, in my view - and why they got it wrong.

I believe the effectiveness of media, if you assume - quite impossibly - that creative quality and targeting are equally good, is broadly determined by five factors:

1. How great an impact they have on individuals
2. How much creative potential they allow for
3. How much interaction they allow
4. How much they cost per message delivered
5. How great a share of voice they have

Generally, the greater the impact, potential for imaginative ideas, possible interaction, and share of voice, the greater the cost -and vice versa.

Thus, the most powerful medium is one individual talking to another, in person. It has the greatest possible impact and allows for the greatest degree of interaction. Nobody else is there, so you have 100% share of voice. You can not only talk but use all kinds of visual and audible aids; and you can hear and see their reactions. It is extremely expensive, though.

Only slightly less powerful is one person talking to a group, for much the same reasons. It is also very expensive.

Then comes the telephone, also pretty dear, allowing for great interaction (unless you use an autodialler). However you can’t see people’s reactions or dazzle them with tricks of one kind or another - and normally you can only have one phone conversation at a time, so that is an expensive medium, too.

After that come direct mail and e-mail – and I honestly don’t know which should come first – which is probably why I come to be writing this piece.

Both media allow you to reach people as individuals; they have considerable impact. Both allow you to respond; both allow for a wide range of creative tricks – perhaps more so in the case of e-mails, especially if you take into account how easy it is to click through.

And so on, down the line through press and TV to radio, which must be close to the bottom of my scale. It’s very cheap to reach each individual, but not as interruptive or dramatic as TV. And then, perhaps posters last of all.

Iam not sure where to place SMS but no doubt some fanatic somewhere is ready to prove it too will wipe the floor with alternatives. As Bertrand Russell said, “The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.”

Forgive this rather broad-brush approach to these matters, and let us return to the two media under discussion -.e-mail and direct mail. Let’s not talk about whether we like or dislike a particular medium, and talk about value for money.

What is the basis for all intelligent investment? It is, of course, return on that investment. And people who make a killing do so when either an investment is undervalued compared to others in its field or it produces exceptionally high returns for the money invested – or both. An even better situation applies if you are among the first to take advantage of the opportunity.

The first people to invest in e-mail instead of direct mail as a commercial medium practically won the marketing lottery. It beat direct mail hands down as an investment. It was infinitely cheaper than direct mail; and since hardly anyone else was using it, they got astounding results.

I recall talking ten years ago to a Dutch marketer selling IT products to businesses who told me he had abandoned direct mail because he was getting a 10% response to his e-mails.

New technology often leads to such happy results. When personalization was first introduced, it doubled response for those who tried it.

But when something works, people copy it. When my Dutch friend was getting his 10% response his audience was getting very few e-mails; probably something approaching 100% share of voice among his audience. He had first mover advantage.

Now, I’ll wager he’d be delighted to get one tenth of the response he got then. And why is this? For three reasons I can think of immediately.

1. Because e-mail is as intrusive, if not more so, than direct mail. If something coming through your door intrudes, so does something that lands in that private, perhaps even more intimate space taken up by your computer screen.
2. Because it is much quicker and easier to delete a message than to bin a piece of direct mail, Click! – and it’s gone
3. Because – and this is very important – spam filters emasculate most selling messages.

Yesterday my Australian partner sent me a list of 100 words and phrases these filters don’t like.

They emasculate copy, because they include almost every tested selling phrase or word you can think of – not just obvious ones like 100% free, and all words that relate to sex or pornography, cures or medication, but also some things that are the very staples of good copy.

Don’t you dare try Dear Friend, 50% off, act now, amazing, as seen on TV let alone compare, free gift, easy terms, now only, or even, God help us, your family and opportunity – you’ll get blocked.

This makes it rather difficult to sell very effectively, wouldn’t you say? It doesn’t make it impossible – and I have a confession to make here: over 95% of my own promotional efforts are through e-mails. This is because right now they work quite well for me. It is not because direct mail doesn’t work, or because I have given up on it.

What I find rather dispiriting about these debates over the merits of various media is their simplistic either/or nature. They utterly ignore the merits of synergy. What actually works best is a combination of media.

Marketing is often likened to war. In war, no wise general prefers one arm to another; says, “We shall use artillery, but no infantry.” The choice of one weapon should not exclude the use of another.

And, by the way, direct mail will be around for while. Take my word for it.