“Insanity is doing the same thing, over and over again, but expecting different results.”

I thought of this quote often this past week as I worked through updated audience profile studies for a number of our clients.

We’ve done dozens of these analyses over the last year across our nonprofit and publishing client base.  One overwhelming theme continues to emerge with each one– current direct mail strategies are driving responders who are old… and getting older at a rapid rate.  A recent analysis gives a good picture of the response differences we have been seeing across the board:

A simple read of the graph shows the 70+ audience at 20% stronger response than the overall performance and the under 50 crowd at 40%+ below.  These are performance gaps we have seen across the board.  In fact, I did a quick straw poll  of over twenty such analyses we did over the last year and all but one showed response gains of 20%+ in the 70+ audience, and at least 20% below in the under 50s.

The composition of the mail volume for these mailers is also revealing.  The same client who had a 40% drop in response for under 50s, had a mail volume break-out like the following:

15% of the mail volume performed 40% below the campaign average.  The overall straw poll had ranges of mail volume in the under 50 crowd between 10% and 25% across the board.  Pretty significant numbers of subpar responding mail volume being mailed over and over.  Back to the Einstein quote, seems a bit insane to be pumping expensive Direct Mail dollars into an under-performing audience doesn’t it?

Now, I’ll qualify my statement a bit.  I don’t think it’s crazy that mailers want to reach and cultivate a younger audience.  From a market growth perspective, it’s actually a sound marketing strategy.  Look at the census population statistics and you can see why it’s an attractive group:

The insanity comes in ignoring the data that says the under 50 audience doesn’t respond the same way as older audiences.  But, most mailers still only send one (or perhaps two at best) control offers to the entire audience.

I’m certainly not advocating mailers turn their attention away from the under 50 crowd.  In fact, I’m counseling clients to increase their investment in this group.  The investment, however, should not be in mail volume.  It should be in new messaging, new creative treatments, and in new channels or even coordinated multichannel efforts.  If you have 15% of your mail volume directed to a low performing group, how about:

a) dropping that to 5% (still a healthy sample)
b) pushing an extra 5% circulation to higher performing, older groups
c) cutting last 5% of production, postage, and media cost and re-investing those savings in new tests targeted specifically to the under 50s

Now that would create a rational expectation for a different result.  It wouldn’t even cost you more.  All you’d need is just a little out-of- the-box thinking and a bit of effort/focus to come up with a new approach to a high-grown audience.  That’s why we call it “target marketing.”

What was that other famous Einstein quote…something about imagination?

The reality is that offline media and consumers use of it, are changing at a faster pace than marketing strategies. The gap needs to be closed which starts with a deeper understanding of the changes taking place within the media landscape.

Here are a few trends marketers need to take note of.

1. Consumers increasing shift to Digital Media

At an increasing rate, consumers are seeking their news and entertainment from online sources. Digital newspapers now have over 100 million viewers on a monthly basis. Subscription revenue from online magazines is expected to grow from $4 million in 2010 to $611 million in 2015. Rapid growth of tablets and tablet content from publishers is fueling this growth along with our desire to be armed with instant information.

Conversely, subscriptions to print versions of newspapers and magazines have been falling steadily for a number of years. Newspapers have been especially hard hit with double digit annual circulation fall off much of the last decade. Since 2000, newspapers have lost close to 15 million daily subscribers. Magazines have seen more moderate reductions in subscribers although certain categories like news weeklies have been hit very hard.

Most organizations have concentrated efforts around developing marketing plans to take full advantage of the digital media growth while at the same time ignoring tangible offline opportunity.

Why it matters:

• Publishers are hungry for revenue and have never been more creative around media rates. Significant circulation exists in both newspapers and magazines at rates close to 85% off rate card pricing. The flexibility around pricing has helped lower performance hurdles and opened up the media to many different types of offers
• Print media is proven to drive qualified buyers online and works well as part of an integrated campaign. Many online merchandisers such as Overstock, Zappo’s, Fragrancenet .com and OneStopPlus.com have all utilized print media to drive online buyers
• Category opportunities. For newspapers, younger readers have migrated to online sources creating a more efficient media buy for those offers reaching a mature reader
• Low risk baseline learning. Magazines and newspapers have not developed consistent pricing models for their digital publications. Advertisers can capitalize on opportunistic, low risk, media buys as a way to establish performance metrics

2. Out of Home Media (OOH) – From Brand to ROI

The growth of smartphone’s and tablets are changing our daily lives including how we process information and advertising. According to IDC, worldwide shipments of smartphone’s have gone from 305 million units in 2010 to an expected 660 million in 2012. This equates to over 100% growth in two years. In addition, consumers are more comfortable accessing the internet from their mobile device. It’s estimated that by 2015 more people will access the internet through their mobile device than a wired connection.

OOH media grew by 8.6% in the first three quarters of 2011 which is almost 3x greater than most traditional advertising. Evolution, growth and relevance of OOH media will continue and direct response advertisers need to take note.

Why it matters:

• Consumers need to be reached with relevant messaging and offers in places that reflect their interest and lifestyle. This includes places such as the airport, health club, commuter stations, doctor’s office, salons and even night clubs. OOH media opportunities reflect the lifestyle of well defined target markets
• OOH media opportunities are evolving rapidly and need to be continually evaluated. Distribution networks, volume, and media placement windows are changing constantly. In addition visibility to new programs is very fragmented requiring ongoing research
• QR codes and their effectiveness will continue to evolve and provide consumers easy access to mobile optimized sitesMedia pricing models are still very brand based. Marketers need to evaluate opportunity and use direct response principles when negotiating media rates

3. Offline Media’s Ability to “Drive to Web”

Print and insert media have proven effective at driving qualified buyers online. In effect, offline exposure to a product or an offer “open the doors to the store” and drive consumers online for additional information or to make a purchase. According to a study by Marketing Evolution, they identified a 40% increase in web traffic for those offers having a corresponding magazine placement.

For insert-based media like Package Inserts, there has been significant growth in program volume from online merchants. For 2012, there is close to 20 million in annual insert volume available and this number is expected to grow as more and more merchants make their shipments available for advertisers.

Why it matters:

• Offline advertising has the ability to effectively expand marketing reach beyond digital efforts driving incremental customers
• Expands media mix allowing marketers to better optimize marketing investment across channels
• Creates an opportunity to drive additional demand around seasonal products or events
• Builds brand. Although effectiveness should be based on a media placement’s ability to provide an acceptable return, offline media has significant reach which helps build brand

The media landscape is changing rapidly as are consumer’s ability to access information and make purchases. More than ever before, successful marketing strategies will require integration of offline and online efforts as well as a keen eye on developing media opportunities. Organizations with fluid media planning and investment strategies will be in better position to capitalize on performance and opportunity.

Multi-channel marketing is mostly still multiple channels operating simultaneously. While it may provide some brand consistency, it is not fully integrated within and between channels or fully embedded in the brand voice or offer copy. With all channels now having the technology to support an integrated approach, there is significant potential to leverage marketing dollars.

For instance, with all of the angst around measuring the impact of social media as a stand-alone channel, we can now incorporate social media messaging and offers into email, in real time. Nothing has quite the cultivation power as email, and its performance is easily measured. So, to extend this example, if, in an email, you pushed your social media as a destination for contests which provides all of the rich context of other participants, but the entrant had to “email to win”, you would get a very different measurement of social media’s contribution.

Not all of the measurement systems are fluid or tied together, but it’s coming, and how it impacts decisioning around marketing and how dollars get spent is exhilarating…and an outright gamechanger.  Check out the Winterberry Group whitepaper entitled Rethinking the “Four Ps”: Marketing Operations Management and the New Pathway to Productivity.

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Online retailers active in paid search had a strong August, with some of the best year-over-year growth in that channel in months.  PM Digital’s August 2011 Rewind Index, which measures monthly U.S. paid search performance for online
retail clients, shows that August revenue from paid search campaigns was up 24%
year-over-year with a 17% increase in spend.  The top days for August were Mon 8/15 through Wed 8/17, although Mon 8/22 and Wed 8/31 were also key. Rising sales at the month’s end, especially mid-week, were a good sign heading
into fall and Labor Day promotions.  Paid search clicks for August
increased 11%, after several months of flat or slightly negative growth.
This points to pent-up demand in the back-to-school and fall sale season, and
also suggests consumers are researching purchases.  Conversion rates
improved strongly in August, up 23%, the eighth consecutive month of double-digit
year-over-year growth.  The combination of significant growth in both
conversion and clicks, on top of 6% growth in average orders, is a great sign
for end-of-year.

Click here to continue reading on the PM Digital Blog.

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