Direct Mail Vs. Pay Per Click – Breaking Through Conventional Marketing BS

This article is for you small or medium business owner. Hell, it may even be for you large company exec. The point I will be trying to make in the next few paragraphs is that although conventional advertising (print, radio, TV) still serves a purpose, it is being eclipsed by something else, something digital, and you’ll need to move through the bullshit, propaganda, and your own ego to realize…

You need to market to where your users are, not necessarily where you spend all of your time. 

… and even that DOESN’T GUARANTEE MARKETING SUCCESS!

So how did this temper come about? Well, it began as I was reading the latest issue of Gulfshore Business this evening AND, coincidently, stumbled upon an article over on Mashable called “The Future of Ad Agencies and Social Media.” It took a second, but I realized the two articles, nearly in contrast to one another, were highlighting a key point about marketing and advertising. 

Gulfshore Business’ Article on Advertising

First, the Gulfshore Business article, titled, AD Ventures, 6 Experts Weigh in on the Best Advertising Media for Your Business, was a collection of Southwest Florida ad companies weighing in on the best place to spend your money to advertise your business. Unfortunately, I feel, from personal experience with many of the mediums suggested (TV, Radio, Print) that it is a misleading article, that it needed to get more specific, and more importantly, speaks to a larger trend in marketing.

The 6 ad spends suggested (in no particular order) included the following mediums: 

  • Billboard Advertising
  • Digital Advertising
  • Direct Mail
  • Print Advertising
  • Radio Advertising
  • Television Advertising

Here’s my problem… most of these are rubbish, or at the very least the article did a poor job explaining in which situation each should be used (or is most effective).  And, in comparison to digital marketing (which alone contains dozens of sub categories, if not more) the other 5 pale in comparison. In particular Direct Mail surprised me The Direct Marketing Association’s own findings show just how poor the response rate for this kind of advertising is and just how expensive, on average, it turns out to be:

Response rates for Direct Mail have held steady over the past four years.  Letter-sized envelopes, for instance, had a response rate this year of… 1.38 percent for a prospect list. 

Direct Mail VS. Pay Per Click

I believe in the above quote that “prospect” is referring to someone that already is interested in your product/service. And I thought I would dig a little deeper: Based on some preliminary research, the cost for direct mail is roughly $1.00/piece (factoring in list costs, production, print, and shipping rates). That means, if I spent $10,000 I could expect roughly 140 “responses.” Although the DMA, appears to track conversion data (those who actually purchase the end product/service) that isn’t mentioned for the example above. Let’s use another metric – the average specialized e commerce metric (just for fun) – of 3%. Put another way, a good e commerce site should get on average 3 purchases for every 100 visits.

So for every $10,000 spent on direct mail approximately 6 people do what I want them to?

Umm, maybe if I’m selling mansions. But, for the average small business that’s a shitload of money going out the door and a horrible return. 

Now let’s compare this to online advertising, namely PPC. Unfortunately, because of the nature of pay per click, we can’t compare apples to apples here. But the highest per click price I’ve seen is around $10/click (we typically see around $0.20 – $5/click depending on market)!

Holy crap $10/click… yup it’s expensive, let’s get back to the example: 

But, with the same $10,000 that gives us 1000 targeted people on our site, nearly 1000% MORE (EVEN AT THIS EXAGGERATED RATE!). And, even if we do have a 3% conversion rate (3% or 30 of those 1000 people purchase) that’s 5 times more than direct mail. AND… at the same time, you can throw at them all of the newsletter signups, pictures of your team, and information you want (although we recommending keeping things as simple as possible). Basically Direct Mail can work, it does work, but…

  • Does it work as well as something like PPC?
  • Does it provide the same kind of return? 
  • Does direct mail provide you and your company the space and time to properly brand your company? 

I’ve horribly digressed, but I promise to wrap things up shortly and this will all make sense… I promise.

Mashable and the Future of Advertising

I’ll make this brief in a nutshell, Mashable’s article outlines, again the ever changing nature of the web, but in particular what role ad agencies will be playing in this new landscape. The article highlights these major changes: 

  • Programs (AKA Web Apps and Other Apps) – How ad agencies will have to incorporate actual web and/or app design into their mix of services to help their clients stay relevant.
  • Groups & Friends – Using social tools like Facebook
  • Location – How Facebook Places and Foursquare are making location targeting a reality (real time!)

Conclusion

National agencies are light years ahead of their local brethren and it’s not necessarily for the reasons you may suspect.

What are you guessing?

Is it because they have bigger budgets to work with? Maybe.

Perhaps it’s their clientele? Good guess, but many local agencies also work with large companies too (albeit, with local branches).

Here’s the reason I suspect… it’s you. You’re the problem. But, it’s also me too, and it’s a lot of local propaganda as well. First we’ll deal with you… I hope you don’t mind. 

It’s You

It’s you for 2 reasons: 

  1. You need to market where your audience is, not necessarily where you are – You may not love the Internet, but nearly 80% of the country does and uses it to find products and services like yours. Over the last 10 years, I’ve seen business owners go from completely opposed about the notion of a website, to understanding it’s necessity (marketing it however continues to be another story). I can recall situation after situation where I tried to sell people on a nicely designed, well optimized, properly digitally marketed website only to have the idea shot down. The excuses were never ending (in fact I continue to hear much of the following)… my audience isn’t online, this is a referral business – I’ll never get a single lead online. Many of those businesses have now dissolved.
  2. You must do a better job of analyzing your marketing dollars spent –  Many of the companies we’ve worked with over the last 10 years don’t do a great job of tracking their client and customer acquisition process, making clear analysis of just WHERE THEY CAME FROM, difficult at best and impossible at worst.

It’s Me

The problem is me too. As someone in the industry, intimately familiar with the technology, but even more importantly what that technology can do for a business (drive sales, make business efficient, etc.) I need to do a better job of communicating to you, and educating you on, what’s out there, what works, what doesn’t and I guess… be a better sales person (or is it marketing?).

It’s the Industry

Finally, and perhaps most importantly is local industry. I have friends all across the state working in marketing positions and sales positions for newspapers, ad agencies, and many other related fields who continue to say the same thing. Despite the change of the landscape, these companies (namely media companies) have been slow to move, and continue to peddle yesterday’s wears as if they actually work – and they don’t. Unfortunately, this problem isn’t so easily fixed, it means restructuring newspapers, magazines, tv and radio, laying off or shifting the skillset of tens of thousands of sales people throughout these industries.

It means changing, fundamentally, the way these businesses have been run, and received revenue, since their inception (hello HULU), but it must be done and it must be done fast.

Because today’s business owner doesn’t have the time or the budget to waste on conventional media that doesn’t provide a positive measurable return!

Zach Katkin
Zach Katkin
Zach Katkin is the co-founder & CEO of Atilus. He is a Certified Google Professional, author, and lover of technology. He helps Atilus stay out ahead of online marketing trends and loves driving results for Atilus' clients.

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