Shaking digital advertising, direct mail being reconsidered | Digiday[Japanese version]

For a long time, digital marketing was the darling of the era, with its detailed measurement, pinpoint targeting, and lower pricing compared to offline marketing.

However, seismic shifts are occurring in the digital world. Google (Finally, a move towards abolition has begun.) Third-party cookies and Apple's App Tracking Transparency feature make targeting difficult.On the other handCPMs are rising and users' tolerance for digital advertising is decreasing.agency executives say.

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Direct mail showing steady growth

“The only constant is change, and that applies to digital as well,” said Laramie Lawson, EVP and director of insights and engagement at independent advertising agency GS&F. “CompletelySome of the great targeting that has become commonplace will no longer be as easy as it used to be.right”.

This is where direct mail comes into play.

Rising digital advertising costs and tightening data privacy regulations are forcing marketers and advertisers to rethink their digital strategies. Agency executives say they are encouraging all clients to diversify beyond digital to include traditional channels such as direct mail.

Clients and agency partners aren't spending a lot of money on direct mail, at least not yet, but that's starting to change.According to the annual U.S. advertising spend report from strategic consulting firm Winterberry Group.,Direct mail rose a solid 1.5% while offline advertising spending fell sharplydeath,It will account for $38.2 billion (approximately 5.54 trillion yen) of offline marketing expenses in the United States in 2024.It turns out. Agency executives say Google's cookie removal has made it easier for clients to accept a more diverse media mix with direct mail.

Jose Villa, president of cultural marketing firm Sensis Agency, said: “As digital response rates continue to decline, click-through rates continue to decline, CPAs continue to rise, and conversion rates continue to decline, direct mail is becoming more competitive with digital.”

According to Villa, on average 60% to 70% of advertising budgets go to digital advertising, but advertising spending on traditional media is also starting to increase, especially for brands looking to get noticed by millennials. (The exact numbers were not disclosed.)

Real-world mailboxes are valuable prime real estate

According to five executives Digiday spoke to for this article, interest in direct mail is highest in the B2B sector, with other sectors including big box stores, housing, fashion, financial services and insurance companies. .

“There are a lot of places where it's becoming very difficult to actually get noticed, especially in the digital world,” said Ned Brown, chief creative officer at advertising agency Badder Rudder. “In other words, it's easier to get people to accept something like that (direct mail) than it was two or three years ago.”

According to agency executives,Real-world mailboxes are valuable prime real estateis. Mail that arrives at your home or office is more likely to be actually opened, rather than scrolling down like a digital banner or sponsored post on social media.Direct mail is more likely to get higher quality impressions than digital campaigns.. As the digital advertising market becomes more crowded, users are less likely to take action on digital banners and sponsored posts. Direct mail is one way to get heard in this noisy environment, executives say.

According to Villa,Direct mail conversion rates range from 1% to 5%is.According to Shopify,The average conversion rate for e-commerce is around 2.5% to 3%It is. Agency executives say adding digital elements like QR codes makes measurement and attribution easier.

Traditionally, direct mail has had a bad reputation. Roster lists were not always easy to obtain. It was also expensive, considering the cost of mailing and printing, and tracking and measuring effectiveness pale in comparison to digital advertising.

The only saving grace in this situation of advertising signal loss is that first-party data has become as valuable as gold in the industry.The ability to make money selling first-party data is leading to the explosive expansion of retail media networks.).Direct mail rosters will become easier to manage as brands improve their internal data.say executives.

Combination of offline and digital

At the same time, QR codes are gaining momentum again and the U.S. Postal Service is innovating with mail tracking, adding digital elements to traditional offline channels and making it easier to measure the effectiveness of direct mail. Once someone receives your direct mail, marketers can use that data for digital retargeting.Surround your direct mail campaigns with digital tactics to improve their effectiveness.that's why.

When it comes to cost, direct mail has yet to overcome its bad reputation. For sealed letters, each letter costs $0.50 (approximately 74 yen), including paper, printing, and postage costs. Additionally, a full-size catalog would cost $0.80 (about 119 yen) per copy in paper, printing and mailing costs, said Polly Wong, president of marketing firm Belardi Wong. talk.

Mr. Wong said, “Direct mail impressions alone are 30 to 40 times more expensive than Meta impressions.” he says. “Even so, I still choose direct mail because it allows me to target the most effective target audience.”

For your reference,According to Gupta MediaThe average CPM for Meta this year is $7.62. But as the cost of digital continues to creep up, the gap with the cost of direct mail is narrowing, executives say.

That said, it seems difficult to get people to accept a shift to a more balanced media mix. This is especially true when marketing budgets are under scrutiny, and metrics such as ROI become extremely important.If you are offline, you cannot obtain detailed tracking information like digital tracking information.As a result, clients are hesitant to take the plunge.

“Clients sometimes find it difficult to turn away from digital advertising because they want to feel an immediate response,” Lawson said. He wants to be able to “understand engagement rates, report content, click-through rates, all of that.”

It is necessary to utilize both on and off.

Still, a balance is needed, agency executives say. Digital marketing may have its challenges, but even if it does become obsolete someday, it's not going away right away.

This means that marketers and advertisers alike should reconsider what role digital advertising should play in their media/marketing mix and utilize both online and offline channels. this is,It has been discussed since at least 2023..

“Both online and offline channels will continue to see similarly modest growth, with the expansion of the marketing mix for advertising spend, subject to economic and overall business constraints,” Wong said. “actual,I think growth will remain in the single digits for both digital and offline.”.

[Originaltext:In rocky digital advertising landscape, advertisers reconsider direct mail]

Kimeko McCoy (translator: SI Japan, editor: Shohei Wakeshima)