Driving Effectiveness with Direct Mail: Key Insights

Direct mail continues to be a powerful marketing tool, offering personalized, targeted, and impactful campaigns in today's digital world. WARC's research highlights the effectiveness of including direct mail in marketing strategies, driving revenue growth, brand building, and overall campaign success. When combined with digital integrations, direct mail proves to be a valuable channel for driving ROI and capturing consumer attention in a multi-sensory manner. Campaigns including direct mail show significant commercial impacts and are more likely to report revenue uplifts, showcasing the importance of integrating mail into the marketing mix.

• Direct Mail Marketing
• WARC Research
• Campaign Effectiveness
• Revenue Uplifts
• Digital Integration

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1. KEY TAKEOUTS FROM WARC S RESEARCH: DRIVING EFFECTIVENESS WITH DIRECT MAIL Making a physical impact in a digital world August 2023 Classified: RMG Internal

2. ABOUT WARCS RESEARCH The full report upon which this document is based was developed by WARC in association with Royal Mail Marketreach. - It takes a fresh look at what direct mail can offer in today s world, in the context of changing consumer behaviours post-COVID and technology innovations, and explores the best strategies for measuring the effectiveness of direct mail campaigns. The report features a range of examples where direct mail has been used to drive ROI and sustained growth. The basis for the report is an analysis of case studies from WARC s case study database all of which have been awarded at, or entered into marketing effectiveness awards and are therefore viewed as successful . This analysis is combined with a review of WARC s global data, industry knowledge and examples. This document is a summary of the key takeouts. 2 Classified: RMG Internal

3. WARCS FOUR KEY TAKEOUTS Driving effectiveness with direct mail 4. 1. 2. 3. Mail remains one of the most measurable channels and the direct marketing industry is facing the effectiveness challenge head on. Mail can be an impactful differentiator in marketing campaigns, driving revenue and ROI for brands that invest. Direct mail can be highly personalised and targeted, capturing attention for longer with multi- sensory experiences & digital integrations. Direct mail delivers on both brand building and performance goals its not just a direct response medium. 3 Classified: RMG Internal

4. EFFECTIVENESS INCREASES WHEN MAIL IS IN THE MIX Hard metrics measured UK cases that used direct mail in the mix, 2016 2020, % of cases 35% +52% WARC's case study-led research revealed that campaigns in its database including mail in the mix had huge commercial impacts versus all UK campaign cases. +43% 32% 23% 23% 23% +64% 22% +75% This analysis looks at the types of outcome effects that the campaigns report. It looks at the effects reported by all the case studies combined, and compares it to those that feature direct mail. 14% 12% ROI Revenue Market share Profit Use direct mail in the media mix All UK cases 4 Source: WARC Driving effectiveness with direct mail 2021 Classified: RMG Internal

5. CAMPAIGNS ARE 43% MORE LIKELY TO REPORT REVENUE UPLIFTS WHEN MAIL IS IN THE MIX* *when comparing campaigns that include direct mail with average UK campaigns 5 Source: WARC Driving effectiveness with direct mail 2021 Classified: RMG Internal

6. CAMPAIGNS ARE 75% MORE LIKELY TO REPORT PROFIT UPLIFTS WHEN MAIL IS IN THE MIX* *when comparing campaigns that include direct mail with average UK campaigns 6 Source: WARC Driving effectiveness with direct mail 2021 Classified: RMG Internal

7. CAMPAIGNS ARE 64% MORE LIKELY TO REPORT MARKET SHARE UPLIFTS WHEN MAIL IS IN THE MIX* *when comparing campaigns that include direct mail with average UK campaigns Source: WARC Driving effectiveness with direct mail 2021 Classified: RMG Internal

8. CAMPAIGNS ARE 52% MORE LIKELY TO REPORT ROI BENEFITS WHEN MAIL IS IN THE MIX* *when comparing campaigns that include direct mail with average UK campaigns 8 Source: WARC Driving effectiveness with direct mail 2021 Classified: RMG Internal

9. A PERFORMANCE CHANNEL AND MORE Mail boosts softer brand metrics too There s an inherent advantage in direct mail given that it always lands in the same place, through people s letterboxes. This predictability gives the channel an average engagement rate of 95%, according to the latest JICMAIL figures. Reaching people at home along with high engagement drives softer metrics such as brand health/equity and awareness measures. The chart shows brand health / equity effects in nearly 50% of cases where mail is in the mix. The same is true for awareness effects. Soft metrics measured Use direct mail in the media mix UK cases that used direct mail in the mix, 2016 2020, % of cases All UK cases 48% 48% 47% 45% 42% 41% 40% 39% 35% 35% 29% 21% 10% 9% 7% 4% Social media, buzz Brand Awareness Web traffic PR value Consumer participation Search performance Brand specific measures health/equity 9 Classified: RMG Internal Source: WARC Driving effectiveness with direct mail 2021

10. DIRECT MAIL BRINGS TRUSTED INTERACTION INTO THE HOME of people have been driven online as a result of receiving direct mail1 Direct mail is unique as it puts a marketer's message into the homes and hands of consumers and they interact with it multiple times. 70% It drives trust and authenticity to communications. More then nine in 10 (95%) open, read and file mail. of consumers have made a purchase, or made a payment or donation, in the past year as a result of receiving a piece of DM2 Response is either immediate or drives a later action or consideration so it offers marketers both performance and brand building advantages. 35% 10 Source: WARC Driving effectiveness with direct mail 2021, 1. JICMAIL, 2. IPA Touchpoints Classified: RMG Internal

11. YOUNGER AUDIENCES WELCOME MAIL Digital natives respond enthusiastically to physical brand experiences The rise of phygital 88% A question of trust 45% Mail drives action 42% of Gen Z consumers prefer brand experiences that combine physical and digital. of 15 to 24 year olds are more likely to trust mail than any other age group. of 15-44 year olds have searched for more information online after receiving mail in the last 12 months. 11 Source: CMO Council & Pitney Bowes, Royal Mail Marketreach & Trinity McQueen, IPA TouchPoints Classified: RMG Internal

12. TECHNOLOGY INNOVATIONS DRIVE PARTICIPATION Marketers are looking to use new tools that help consumers deepen their interaction as well as bridge the gap between paper and digital. Technology can take things a step further with augmented reality experiences that will allow an image within a piece of content to come to life or QR codes that can be natively scanned with a smartphone to open up a bespoke landing page for the relevant product, service or offer. 84% have scanned in a QR code from mail to interact with a brand online 12 Source: WARC Driving effectiveness with direct mail 2021 Classified: RMG Internal

13. 4 STEPS TO BETTER MEASUREMENT Mail is highly measurable 4. 1. 2. 3. For more detail and advice on measurement contact us. Start by putting the right framework in place, with all of your metrics and measurement points agreed up front you can track more accurately. Use tracking mechanics like QR codes, coupon codes and so on to improve your ability to track actual response rates. Use the metrics to measure outcomes that are most important to your business: Cost per acquisition to lifetime value. 13 Source: WARC Driving effectiveness with direct mail 2021 Classified: RMG Internal

14. JICMAIL Gold standard industry metrics to support campaign planning JICMAIL (The Joint Industry Committee for Mail) provides marketers with audience measurement and campaign impact data that help improve the integration process of direct mail into econometric models. Marketers can use JICMAIL to: REACH how many people in the household saw it 1. Convert mail items to ad impressions. FREQUENCY how many times people in the household returned to it 2. Analyse mail behaviour to test model assumptions. 3. Measure the full range of mail effects. CAMPAIGN IMPRESSIONS audience reach x frequency 4. Assess brand specific and competitor mail campaigns. 14 Classified: RMG Internal

15. THANK YOU Download the research Classified: RMG Internal