November 04, 2015

Marketers Are In A Digital Arms Race

This year, 60.7% of marketers will increase their spending on email marketing, 48.9% will increase their spending on social, and 38.3% will increase their spending on Search1. Yet response rates for these marketing techniques continue to languish in the region of less than 1% on average. These channels are crowded and it’s becoming more difficult for marketers to cut through the clutter. Even though you can now easily retarget a person who abandoned your site, you have almost no guarantee that they’ll see your ad or email plea to return to the site and buy.

Using a simplified version of the Google AdWords pricing algorithm makes it easy to illustrate the need for a better marketing mix:

Ad Position = Quality Score x Bid
which can be rewritten as:
True Price of Attention = Cost of Quality x Cost of Media

As all marketers continue to invest in content marketing, creative optimization, email composition, and social media outreach, every marketer’s Cost of Quality, i.e., cost of being relevant, will rise (understanding that Google also included a measure of intent in their Quality Score and some of my examples may not).  Eventually, the only way to reach the same qualified consumer is to start drastically increasing the Cost of Media.Bicycle_race

Savvy digital marketers are now looking to other channels to break out of this digital marketing arms race. Fanduel buys TV ads, Harry’s buys billboards at bus stops, Casper is all over the NYC Subway, Gilt Groupe sends mail, and there are countless other examples of digital marketers expanding their horizons. To optimize the Media Mix to include mail alongside search, email, and social, a new technology was needed to offer the same insights and accountability that marketing leaders have come to expect from digital media.

Mail Is Still A Powerful Tool In The Arsenal

Direct marketers love direct mail. Companies like L.L.Bean, Macy’s, J.Crew, Lands End, American Express, Chase, Comcast, AT&T, ASPCA, Crate & Barrel, Athleta, and countless other marketing juggernauts have achieved great success with mail over the years2. The new guard – those who cut their teeth on digital marketing – have also built their businesses off mail. New household names like Bonobos, Warby Parker, Google, and Yelp have used mail to great effect.

Digital and direct marketers at these companies are in a constant struggle to manage communications, and attribution, across digital and physical marketing channels. Catalog drops and direct mail campaigns naturally drive people online. 44% of people visit a brand’s website after receiving mail, and 34% use search3. At PebblePost, we have built technology to bring mail into the “clickstream” for the first time ever. This allows marketers to capture consumers who spend time on the site, effectively raising their hand and showing their interest in the product they viewed, and note those that do not complete the transaction. Programmatic direct mail captures that intent and places it back in the consumer’s hand to incent them to go back and finish the purchase. 

Consumers already respond to mail, or save it for future use. And marketers do want and need variety in their Media Mix. The most successful marketers have stayed with mail all along, to the tune of $46 billion spent annually in the U.S. alone. But much of that remains bulk mail that is pre-sorted, targeted primarily by geography or zip code, and provides general messaging or promotions.

Mail needs modernization. By launching Programmatic Direct Mail, we’re focused on bringing the efficiency and insight of digital to the efficacy of direct mail. There has never been a better time to reinvent the medium and the technology is now there to do it. By applying programmatic concepts to the direct mail business, we make mail a viable real-time medium. We’ll go into detail on how we do that in an upcoming post.

If you have any questions about PebblePost’s approach to remarketing using mail, our technical undertaking, or are interested in joining our Engineering or Product Management organization, please reach out at hello@pebblepost.com.


1 Source: StrongView (http://www.strongview.com/resources/blog/whats-the-state-of-marketing-in-2015-new-survey-research-reveals-key-trends)

2 Source: Target Marketing (http://www.targetmarketingmag.com/article/the-top-50-direct-mailers-campaigns-received-2014/)

3 Source: DMA (http://www.dma.org.uk/uploads/Print-tracking-report-2013_infographic_53f6ffec5ecc0.pdf)

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