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Direct Mail Response Rates 'Dipping' says DMA Report

June 15, 2012
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New York, NY, June 14, 2012—The Direct Marketing Association (DMA) today released the "2012 Response Rate Report," which provides key cost and performance benchmarks to help marketers gauge the relative efficiency of their own campaigns.

Initially created in 2003 to detail the typical response rate for direct marketing campaigns in specific professions and channels, this edition marks the eighth in the series. This year, for the first time, DMA has augmented its survey data with transactional data from Epsilon and Bizo, adding aggregated data on more than 29 billion emails, and more than two billion online display ads, respectively.

“With transactional data, we have sample sizes in the millions, even billions of impressions and emails,” said Yory Wurmser, DMA’s director of marketing and media insights. “Transactional data has an edge on survey data for two reasons:  First, sample sizes are big enough that it’s possible to break the data down into more industries, with more significant findings. Second, transactional data tends to be more accurate, since it takes the human element out of the assessment and shows exactly what happened.”

In another first for this edition, DMA compares direct mail response rates over time. The time series reveals that direct mail response rates have dropped nearly 25 percent over the past nine years. Even so, mail campaigns draw a better overall response than digital channels. For instance, response rates for direct mail to an existing customer average 3.40 percent, compared with 0.12 percent for email, which is roughly a 30-fold difference. Costs are also higher, which translates to roughly equivalent costs-per-sale/lead for direct mail, email, and paid search.

“Even though direct mail is less effective in driving response than it was a decade ago, it still is among the best media for generating overall response,” says Wurmser. “This points to its likely continued role as an important medium in the marketing mix, even as the cost effectiveness of digital channels suggests that they will continue to gain budget share.” 

Other important findings include:
  • Transactional data show that only six percent of the actions following an online display advertisement occur immediately following a click, which indicates that click-through rate greatly underestimates the impact of online display.
  • Transactional data show that financial services emails had open rates above 30 percent, which ranked the highest among industries. Retail (Apparel) had open rates averaging 14.7 percent, which narrowly was lower than Publishing & Media (14.9 percent). In contrast, data showed Publishing & Media as having the highest action rates per impression (0.013 percent).
  • For emails, the highest click rate to open rate is for CPG (46.5 percent).
  • Cost per order or lead for acquisition campaigns were roughly equivalent for direct mail ($51.40), post card ($54.10), email ($55.24), and paid search ($52.58).
  • Email had the highest ROI (28.5), compared with 7.00 for direct mail.
  • Email performance went up slightly from the 2010 Edition of the Response Rate Report.
  • The highest response rates—nearly 13 percent to a house list—was produced by telephone marketing. Telephone marketing also had the highest costs: nearly $78 per order or lead for a house list, and $190 for a prospect list.
  • Costs were generally higher for B-to-B campaigns than for B-to-C campaigns.
DMA’s Response Rate Report was conducted through a survey that was emailed in April 2012. When the survey was closed, DMA had received 481 usable responses.
 
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