According to the latest DMA research, the list industry is witnessing a renaissance. But I’d like to throw out a challenge to readers of DecisionMarketing – if you had to select just one channel from inserts, direct mail and off the page, what channel would you choose?
When I’ve extended this challenge to the many brand managers I meet during the course of my working hours, I tend to be answered with “direct mail” or “off the page”. Never once has a brand manager looked me square in the eyes and said “inserts”.
If ever there was a poorer cousin to direct mail, inserts would take the unfortunate mantle. Deemed as sexy as the cardboard boxes they’re delivered in, inserts are considered either as an after-thought or are simply tagged onto larger campaigns and given to an intern to art direct.
Is this perception misplaced? At first glance, no. Direct mail typically pulls in higher responses while off the page, in particular, has weathered the recession well with many offers focusing on the grey market, a demographic often left unhurt by wider economic forces.
But here’s the thing. Whilst direct mail and off-the-page are performing adequately, inserts are pulling in a much better ROI. And isn’t that what’s it’s all about?
You just need to do the maths. Take the average cost of a cold mail piece – 60p or £600 per thousand. Now compare that to the price of an insert which is of the measure of £60 per thousand at the high end (inclusive of print). Essentially, direct mail is ten times more expensive than inserts, which begs the question, “does direct mail frequently pull in ten times the response rate of an insert?” No. It very, very rarely does.
So the figures stack up like this. The average (and I must stress ‘average’ as so many factors influence results) response of a mail piece is 1% and the average response of an insert is between 0.2% and 0.3% – a piece of direct mail therefore costs ten times more than an insert, yet pulls in a response of just five times higher. Of course, the above calculations are a (very) rough generalisation but, as a statistical reference point, I’d argue that they’re not far off the mark.
Inserts also compare very favourably to off-the-page ads. Not only do inserts typically pull in a higher response (by a factor of 2 to 3 times), they also compare well with the awareness generated by off-the-page ads. If anything, inserts can often outperform off-the-page ads in pure awareness alone, because of their tendency to ‘drop out’ of newspapers and magazines.
The factors outlined above are the reasons why, for a national FTSE 100 retailer, we’re pulling in results for our inserts campaigns that outperform anything else in their marketing armoury. We recently had a campaign achieve 5.4% response and £3.5m worth of sales. That’s unprecedented, even for us as insert specialists, and although unlikely to be repeated it gives a gauge over what can be achieved when all factors converge together in a virtuous perfect storm.
Inserts campaigns don’t just include the national media either. Potential media includes product dispatch parcels, account statements, catalogues, brochures and point of sale. All these channels allow marketers to target specific retail demographic groups at low cost.
Insert campaigns also work particularly well as part of an affinity marketing campaign when two brands work together in a joint initiative. A retailer, for example, might allow a partner brand to put an insert within each bag at checkout. Affinity inserts typically out-perform cold inserts by a significant margin because of the implicit backing of one brand with another.
Finally insert campaigns tend to perform better when other marketing channels are used to ‘back up’ the insert campaign. For example, an email broadcast might be sent to a customer base prior to an insert campaign being launched to make them aware of a forthcoming special offer. This adds value, awareness and drives better ROI, especially when launched in conjunction with an affinity partner.
Is it any wonder then that in the latest DMA Insert Industry Report (Q2 2011), 1.4 billion inserts were distributed, with magazine inserts seeing a 50% uplift from the year before. Significantly, the biggest insert sector was the retail trade, providing evidence that even in a severe recession inserts are able to drive customers in-store and online.
All told, the next time anyone casually dismisses inserts, take them aside and ask them to include them in their marketing plan. They won’t be disappointed.
Nick Howse is managing director of Howse Jackson Marketing
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