At the millennium, personalised targeted direct mail was by no means unknown, but it was certainly a minority activity. Variable enclosure had taken off by this stage, trying to capitalise on the targeting and segmentation possible at the database level. High quality, personalised colour print, where text, images and whole sections of content can be varied according to the recipient’s profile, was only being used by a handful of pioneers and early adopters. Now the whole scene has changed.

In order to try and put some broad metrics on the use of variable colour print in targeted direct mail, GI Direct commissioned independent research into the subject. In brief, the findings were as follows. Firstly, response rates to targeted direct mail using variable colour have remained consistent, despite a major upturn in the usage of variable colour. Campaigns using variable colour on average experience 32.6% response uplift, compared with a 33.4% uplift two years ago. Secondly, this uplift has been maintained, despite the fact that variable colour usage has grown very strongly over the period, from just over 30% two years ago, to almost 40% of direct mail today. Specifically in the Retail sector — which accounts for around 10% of the nation’s direct mail output - targeted variable colour now accounts for 49% of that output.

So why is this growth happening.

Budgets have been steadily flowing from above-the-line advertising into the direct marketing techniques, but at the same time the typical size of a direct mail campaign has fallen. It is virtually inconceivable that marketers would choose to downsize their campaign volumes if they were not getting at least the same (preferably improved) response and conversion from each campaign. Pressure on marketing directors to produce measurable contribution to the business bottom line have certainly not slackened in the last few years, and in most firms have become far more stringent.

Much public comment tends to be focused on the meteoric rise of online advertising. Yet growth in this sphere is inevitable. It is still a new medium, and much of the spend represents companies’ early, experimental forays into digital advertising. Therefore, we need to recognise that significant element of online that is being pumped into pure experimentation which, if it does not produce commercial returns, will be dropped as quickly as it was picked up. Continued growth in direct marketing budgets, on the other hand, and the overall growth in direct mail volumes (bar a temporary hiatus two years ago), is much more impressive, denoting a fundamental improvement in the return on investment delivered by traditional direct marketing media.

Of course, the truth is that marketers are seeing an increasing symbiosis between the different measurable marketing techniques. Direct mail has been used very successfully by online organisations to recruit and keep customers. At the same time, online customers of higher value are often singled out to receive glossy printed communications that will make them feel that extra bit special. The immediacy of online is now frequently combined with the near-universal reach of direct mail. We have to remember that only 57% of UK households have a home internet connection, and EU legislation restricts cold emailing to prospects. Moreover, the sheer availability of direct mailing lists on the commercial market is such that prospect and customer targeting can be far ore powerful through the medium of mail — even if subsequent ‘permission’ communications may switch to a combination of email, mail and web.

In psychological terms, the report’s findings are interesting, firstly regarding the extent to which consumers appreciate effective personalisation and relevance, and secondly as a reminder that impact can be preserved when using discrete media such as direct mail.

The fact that increased usage of variable colour in DM has not suppressed response rates implies that we are all much more receptive to targeted communications. Moreover, this would appear to be an appreciation that is not relative — in that the more personalised communications we get, the more delighted we are — at least in the current state of play of DM. It would be naïve to think that personalised marketing will not reach a point where it is so universal that response rates may fall somewhat. However, it would appear that, at present, we are very far from that point, and that consumers are simply enjoying the more relevant and tailored marketing offers they are receiving.

It would also seem that the discrete nature of direct mail helps to preserve responsiveness and prevent consumer ennui with a creative idea. Above-the-line cannot be beaten for immediate and universal impact, but that initial impact tends to be short-lived, and to require expensive maintenance. Direct marketing, on the other hand, addresses individuals individually, and as such, is far less susceptible to mass switch-off, or indeed to mass failure of a creative concept, because of the added value that targeting adds. This may extend the life of response uplift for variable colour much longer than would be the case with an above-the-line innovation.

GI Direct