Direct mail to weather digital inroads, budget cuts

This growth is largely underpinned by consumers' continued demand for more highly personalised communications, the impact of privacy legislation and the fact that creative direct mail still remains the most effective yet unobtrusive form of direct marketing, while offering the best response rates.

Research has proven time and again that consumers still respond best to a well-written, creatively executed direct mail piece that is correctly personalised and targeted. Privacy legislation has to a large, albeit unexpected, degree driven the growth in the direct mail sector, creating far savvier consumers who are keenly aware of their rights.

Correctly executed

Direct mail is the least obtrusive and is the least likely to generate a negative response from a consumer, compared with a pre-dinner telesales call or bulk SMS or email campaign. Correctly executed, it allows the recipient to firstly feel as if they are being treated as an individual, they are able to digest the information in their own time and it allows for a greater depth of valuable communication.

However, it is crucial to research and gain an insight into the true impact of privacy legislation and the growth of Internet and mobile communications in relation to the traditional direct mailer. For example, a direct mailer that is supported by an informative website is a highly effective combination - going forward, managing and integrating the dynamics of the different mediums within the parameters of the law remains the key challenge for direct marketers.

In a study conducted in the US and Canada by InfoTrends, direct mail remains the preferred direct marketing approach, with 61% of consumer respondents stating a preference for direct mail over other types of direct marketing. The InfoTrends study also adds that direct mail can be examined from two perspectives - direct mail that is designed to acquire new customers and direct mail that is designed to retain or up-sell existing customers. The study found that the direct mail market is evenly split between the two types of communications.

Another trend

Another trend that is picking up locally and one that has proven highly successful in US markets is the combination of marketing messages with traditional business documents such as invoices, bank statements and insurance policy documents, for example.

Currently this is very much an in-house tool so a retailer would for, example, include its latest offers on the backside of a client's store card account and so on, but there is huge scope to expand this offering to other brand owners wanting to reach a broader base of consumers, while remaining within the ambit of privacy legislation. Banks are starting to leverage this on credit card accounts and are including special deals and offers from preferred partners and offering clients better pricing depending on their credit card status.

It makes sense to use transactional documents such as these as carriers as there will always be a need for these driven by day-to-day business and retail transactions.

Businesses across the globe are under increased pressure and face tightened budgets while still having to communicate effectively with their prospects and clients. While the recession has eased, it will be at least a year before we start seeing any reasonable recovery in the markets.

Media integration

This means that marketers will need to drive harder to find cost-effective marketing platforms and to cross-leverage their media as they have never done before. Media integration is going to be a key factor this year and beyond, and direct is going to play a key role, owing to the accountability and measurability that it affords marketers.

While the prospects for the tried and trusted mailer look positive, there are some fundamental influencers that will play a role in direct mail activity in 2010 and beyond including:

• Growing societal and legislative demand for green practices - brands will need to demonstrate a commitment to green practices in terms of recycling and environmentally-friendly DM processes - those that do will gain a significant competitive advantage.
  
• Adherence to the code of ethics and practice as developed by the Direct Marketing Association of South Africa and adherence to the privacy legislation and Consumer Protection Act.
  
  
• Cost to market - print, paper stock, logistics and delivery costs will continue to impact on budgets and there will be an intense focus on deriving greater process efficiencies. In particular, the catalogue sector will need to look at innovative ways to market in the face of increasing postage costs. The postal services will need to actively engage with the market to manage costs and logistics efficiencies.
  
  
• Marketing paralysis - as we head slowly out of the recession, brand owners remain cautious in terms of formulating long-term marketing and advertising plans. As the biggest users of direct mail, the financial services sector remains a pivotal player in terms of signalling the green light for “business as usual”.
  
  
• Media integration and multi-channel approaches - media planners will be under pressure to effectively manage and integrate the dynamics of a multi-channel approach across various media platforms.
  
  
• Agency consolidations - as more agencies feel the pinch of a tough economy, many have merged, as well as expanded, their service offerings into unchartered territories, trying to offer clients a one-stop solution for their marketing needs, including direct. As a highly specialist field, clients embarking on direct marketing will need to look hard for the specialist agencies who have in-depth knowledge of the practice and art of direct to avoid becoming victims of poorly executed, hatchet jobs.