Research Shows Increased Interest In Advanced Addressable Direct Mail For Leading Brands
A new report from Matterkind and MAGNA shows increased ROI for brands that use Advanced Addressable Direct Mail
Interpublic Group’s Matterkind and MAGNA revealed ROI to Sender, a new report that lists the best practices for running a direct mail campaign and explores the value of new product developments like Advanced Addressable Direct Mail (AADM). The report highlights the fact that direct mail still remains an integral component of everyday life and brands are continuing to find innovative ways to reach their customers. The report also analyzes key trends and examines how to incorporate direct mail in a media mix.
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ROI to Sender reveals how direct mail, one of the original forms of advertising, is now a $16 billion industry with a core group of loyal users that continue to invest in innovative new product developments like AADM each year. AADM is the latest product advancement that accounted for $150 million last year and is a burgeoning solution that matches a user’s digital profile to their physical location. This solution allows marketers to retarget online website visitors with offline direct mail. This means that brands can re-engage customers using their first-party Customer Relationship Management databases or prospect for new clients by tying digital third-party data to terrestrial household addresses. It’s a targeted digital-to-direct mail solution that lets marketers cut waste and reach only the audience that they want to reach with mail.
According to the report, MAGNA expects the AADM market to grow to more than $500 million by 2025, an average growth rate of +30% per year. This growth opens several new data-driven opportunities for brands to merge direct mail with their addressable media strategy in a familiar way that people expect.
“This new ability to leverage rich, addressable tactics for direct mail is really exciting and something that we’ve seen marketers needing, and wanting, for some time,” said Chris Karpenko, Executive Director of Brand Marketing at the United States Postal Service. “We’ve had great results with direct mail and digital working together within a holistic omni-channel mix. Bringing these channels even closer together, further bridging the online and physical worlds, is crucial to successful marketing.”
“Direct mail and addressability have historically been synonymous as direct mail has traditionally been regarded as a new customer acquisition or traffic-driving strategy for local businesses,” said David Tucker, Senior Vice President Managing Director of US Strategy at MAGNA. “With the rise of advanced addressable direct mail, linking the physical mailer to online activity, many advertisers have also discovered mail’s strength further down the funnel, finding it a cost-effective way to retarget, especially coming off a period where more touchpoints were digital than brick and mortar.”
“With third-party cookies eroding, and CTV screens filled with logged-in streaming users, more of the marketing mix than ever before is anchored around robust, first-party data,” said Marcus Witte, Executive Vice President of Advisory Services at Matterkind. “When using Matterkind’s AADM offering, we have seen ROI increase for brands when direct mail is tied into a holistic campaign based on a person’s digital identity and physical address.”
Key findings from ROI to Sender include:
- Direct mail is the third largest media channel in the US, after digital media and national television, and is slightly larger than local television.
- By the end of 2020 direct mail was a $16 billion market.
- Interest in mail is high, and more people are realizing the importance of it.
- According to a USPS survey run by Summit Research in late 2020, 60% of millennials viewed mail as more important to them in 2020 than they did three years ago, while 54% of Gen X note that mail was more important to them in the same time period.
- An incredible 80% of people said that they looked forward to seeing what was in their mailbox.
- People spend more time reading their mail than in past years.
- On average, people spent more than 8 minutes opening and reading mail in 2020.
- In 2021, programmatic techniques enable direct mail to be an effective part of the media mix across the funnel.
- The top 10 adapters account for 30% of direct mail spend and grew their combined spend by 1% in 2020.
- The growth of Advanced Addressable Direct Mail is part of a larger trend toward automated direct mail platforms.
- The advanced addressable direct mail market will grow by nearly +50% in 2021 and will surpass $500 million by 2025.
In 2021, programmatic techniques enable direct mail to be an effective part of the media mix across the funnel and represent an ideal time to bring AADM into the media mix. With audience modeling, smaller batches of mail, shortened production timelines, and creative advances, direct mail can be a strong contributor to results across the customer journey.