Remember Direct Mail? It’s About to Become A Disruptive Marketing Tool
Lewis just published an article in Total Retail on the power of Direct Mail as a marketing tool.
Remember Direct Mail? It’s About to Become A Disruptive Marketing Tool
Maybe you’ve heard Megan Brennan, the 74th Postmaster General of the U.S. Postal Service, discuss the agency’s efforts to modernize and meet the challenges of the 21st century. If you haven’t — and let’s face it, postal mail flies well below today’s tech-targeted radar — you might be surprised to learn that the Postal Service partnered with Amazon.com to deliver groceries in San Francisco, built an augmented reality app to enhance what’s in your mailbox, and created an online hub that allows customers to give their carrier specific delivery instructions. In other words, neither rain, nor sleet nor technological disruption will interfere with the mail, and that’s good news because as Brennan put it, direct mail is “the most direct pipeline to the consumer.”
The question is: What can retailers do to make sure they’re capitalizing on this new, tech-spirited innovation at the Postal Service and lead the charge to marry digital technology with direct mail?
This year, 60.7% of marketers will increase their spending on email marketing, 48.9% will increase their spending on social, and 38.3% will increase their spending on Search1. Yet response rates for these marketing techniques continue to languish in the region of less than 1% on average. These channels are crowded and it’s becoming more difficult for marketers to cut through the clutter. Even though you can now easily retarget a person who abandoned your site, you have almost no guarantee that they’ll see your ad or email plea to return to the site and buy.
Using a simplified version of the Google AdWords pricing algorithm makes it easy to illustrate the need for a better marketing mix:
Ad Position = Quality Score x Bid
which can be rewritten as:
True Price of Attention = Cost of Quality x Cost of Media
As all marketers continue to invest in content marketing, creative optimization, email composition, and social media outreach, every marketer’s Cost of Quality, i.e., cost of being relevant, will rise (understanding that Google also included a measure of intent in their Quality Score and some of my examples may not). Eventually, the only way to reach the same qualified consumer is to start drastically increasing the Cost of Media.
Savvy digital marketers are now looking to other channels to break out of this digital marketing arms race. Fanduel buys TV ads, Harry’s buys billboards at bus stops, Casper is all over the NYC Subway, Gilt Groupe sends mail, and there are countless other examples of digital marketers expanding their horizons. To optimize the Media Mix to include mail alongside search, email, and social, a new technology was needed to offer the same insights and accountability that marketing leaders have come to expect from digital media.
Mail Is Still A Powerful Tool In The Arsenal
Direct marketers love direct mail. Companies like L.L.Bean, Macy’s, J.Crew, Lands End, American Express, Chase, Comcast, AT&T, ASPCA, Crate & Barrel, Athleta, and countless other marketing juggernauts have achieved great success with mail over the years2. The new guard – those who cut their teeth on digital marketing – have also built their businesses off mail. New household names like Bonobos, Warby Parker, Google, and Yelp have used mail to great effect.
Digital and direct marketers at these companies are in a constant struggle to manage communications, and attribution, across digital and physical marketing channels. Catalog drops and direct mail campaigns naturally drive people online. 44% of people visit a brand’s website after receiving mail, and 34% use search3. At PebblePost, we have built technology to bring mail into the “clickstream” for the first time ever. This allows marketers to capture consumers who spend time on the site, effectively raising their hand and showing their interest in the product they viewed, and note those that do not complete the transaction. Programmatic direct mail captures that intent and places it back in the consumer’s hand to incent them to go back and finish the purchase.
Mail Is Effective, And It Can Be So Much More Relevant
Consumers already respond to mail, or save it for future use. And marketers do want and need variety in their Media Mix. The most successful marketers have stayed with mail all along, to the tune of $46 billion spent annually in the U.S. alone. But much of that remains bulk mail that is pre-sorted, targeted primarily by geography or zip code, and provides general messaging or promotions.
Mail needs modernization. By launching Programmatic Direct Mail, we’re focused on bringing the efficiency and insight of digital to the efficacy of direct mail. There has never been a better time to reinvent the medium and the technology is now there to do it. By applying programmatic concepts to the direct mail business, we make mail a viable real-time medium. We’ll go into detail on how we do that in an upcoming post.
If you have any questions about PebblePost’s approach to remarketing using mail, our technical undertaking, or are interested in joining our Engineering or Product Management organization, please reach out at [email protected].
It never hurts to get a few big brands to help a startup navigate the product/market fit, especially for the startup’s CMO. Last week the PebblePost team had the chance to test the story of PebblePost in front of some very large CPG, auto, travel and retail brand marketers, both at Shop.org’s Digital Summit and at Brand Fusion, a more intimate event hosted by The Brandery in Cincinnati. It was great to meet leaders of marketing, eCommerce, and Innovation at a wide range of big companies, and get direct feedback about how programmatic direct mail can be additive to their marketing mix.
What we came away with was some fascinating insight. Brand managers, eCommerce leaders, and print-dependent mailers in the financial and insurance sector made it clear how connecting digital activity to direct mail in real time would help them. Digital marketers take a few minutes to think it through, then see the tight connection to a physical “impression.” A few clear themes emerged:
Capture customers that show intent but pass on the “buy” button. When customers visit a site, they don’t always raise their hand to say “please market to me”. And in our new, more sensitized ad blocking environment, retargeting ads using display only cause more angst with consumers. But brands don’t want to lose customers, and like the idea that a highly relevant and high quality piece of mail could land at the home of a prospect without the overt messaging that a poorly placed retargeting ad might deliver.
Recapture existing customers that are hard to engage online. Another brand, this one in financial services, was trying to figure out how to engage people with low digital activity, but currently come with a high cost of print mailings. With mail sent based on a login to the site or a call to the call center rather than in bulk, this print-heavy marketer could reduce or even eliminate in-house print production, and deliver a relevant and timely message to the customer to drive engagement.
Reinforce purchases with additional value. Mail sent based on customer behavior can also be done as a result of a completed transaction. A company that has business partners (say, a travel site with its car and hotel affiliates) could send an offer once a trip is booked that reminds and cajoles the customer to book with partners. The cruise industry is a natural for this, as many of the profitable add-ons are sold well after the cruise is booked.
Use digital activity to create a personal, and physical, impression. Just because a brand has deep data on each customer doesn’t mean they have to make it obvious. Grocers, for example, have a ton of very specific product and SKU-level purchase data for each of their loyalty card holders. But if, like with the coupons one gets at checkout, an offer is sent in the mail a few days after checkout, that provides a new way for shopper marketers to engage online and in-store shoppers with some added incentive. And it doesn’t need to explicitly call out the item or price in order to be effective at recapturing the consumer’s attention.
There are many case studies and uses that we anticipate learning about as we engage customers and take them through the programmatic direct mail story. But these early ideas, the enthusiasm with which we engaged with digital and traditional leaders was a great sign of customers to come.
PebblePost™ Invents Programmatic Direct Mail and Opens Platform To All Marketers
Company Completes $3M Seed Round of Funding To Accelerate its Growth
New York, NY – October 6, 2015 -- PebblePost, the inventor of programmatic direct mail, today announced the general release of its offering and the successful completion of its seed round of funding, a $3M raise that the company will use to open up their offering to the general marketplace of digital and direct marketers, and release additional products and features. Tribeca Venture Partners and ff Venture Capital led the round with additional seed funds and strategic angels participating.
Well-known serial entrepreneur and founder of Metamorphic Ventures Lewis Gersh, and former Google and DoubleClick executive Robert Victor, respectively serve as the company’s CEO and CTO. To date, the company has enabled a limited 20 e-commerce, Catalogers and Digital and Direct Marketing Agencies in private beta with the ability to use its platform to transform their real-time online activity into personalized direct mail that is sent to the customer in under 24 hours.
Stated Gersh, “PebblePost invented Programmatic Direct Mail. We recognize that marketers need to combine the efficiency of digital with the effectiveness of direct mail to retain their loyal customers and grow their business. Marketers currently spend over $150 billion on direct mail and data services, yet have seen little innovation over the past two decades. The raise accelerates our ability to give marketers what they need to activate their data assets in this great medium.”
Agencies like PM Digital recognize that the advantage of the platform is that it fills a gap between digital activity and direct mail, powering the ability to drive cross-channel consumer response as quickly, intelligently and efficiently as possible. During PebblePost’s pilot, marketers reported exceptional campaign ROI, as much as 10 times their traditional direct mail response and conversion rates, and another order of magnitude higher than digital.
PM Digital Founder and CEO Chris Paradysz said, ”The ROI of initial campaigns proves that Programmatic Direct Mail far exceeds pure digital or pure direct mail alone. PebblePost is proving to be the ultimate digital to direct clutter buster, response lifter and revenue driver, far exceeding other cross-channel conversion rates.”
According to Rob Victor, PebblePost’s founder and CTO, “For the first time, direct mail response path activity can be seen in real time analytics, putting direct mail into the click stream for attribution. Further, daily response and conversion activity is used to optimize tomorrow’s direct mail, every day. Digital marketers can now experience 100 percent fraud free advertising with complete 1:1 transparency and ad blocker immunity. The combination empowers digital advertising efficiency with direct mail efficacy producing a new level of performance metrics.”
Leading data marketing providers like Acxiom are also expecting marketers to benefit from this approach. Todd Parsons, General Manager Marketing Services at Acxiom, declares, "Every day we help our customers put their data to use to make intelligent decisions on how to interact with consumers. PebblePost represents a unique and powerful way to put that data to use in real time, connecting intent expressed online to power personalized offers sent by direct mail to their home."
Additional investors supporting the seed round included Alpine Meridian Ventures, Mantella Ventures, and Kickstart Seed Fund, and industry angels Are Traasdahl (TAPAD), Oren Michels (Mashery), Yen Lee (Rakuten), David Rodnitzky (3Q Digital), Sanjay Chadda (Petsky Prunier), Geoff Judge (24/7 Media), Erik Matlick (Bombora), Slava Rubin (Indiegogo), Frank Barbieri (YuMe), Michael Liou (Anvil Capital Advisors), and Bob Ellis (serial angel).
For more information about PebblePost, please visit www.pebblepost.com.
About PebblePost (www.pebblepost.com)
PebblePost invented programmatic direct mail to dynamically transform real-time online activity, send mail, and optimize daily messages and creative based on real-time results. PebblePost’s programmatic direct mail platform includes the world’s first tools for real-time segmentation, workflow, analytics, and optimization. PebblePost solves the most difficult digital-to-direct remarketing challenges by combining the efficiency of intent data with the effectiveness of direct mail. PebblePost is a venture-backed company based in NYC.
Programmatic Direct Mail: Direct Mail With Digital Control
Digital Marketing is celebrating a major milestone this year – it turns 20 years old. While there were some fits and starts in the early years, it has grown into a measurable, substantial medium that gets itself into trouble as any young adult does. But it had some great educators to learn from: TV, print, and most notably direct mail provided the fundamentals of advertising that groomed this broad and substantial newcomer.
These have always been great media. If you want to reach a mass audience, nothing works better than TV ads for efficiency. If you want emotion and design, print is the best route. If you want desk-space in the home office, direct mail is golden with the highest response rate next to telemarketing. Now the time has come for digital lessons to be taught to the teachers, bringing these traditional media into the 21st century.
PebblePost is driving that effort to bring direct mail into the digital age. Like TV, direct mail has never been perceived as a real-time medium that can be executed, measured, and optimized in real time. That’s why PebblePost is proud to announce the invention of Programmatic Direct Mail, which applies digital thinking to direct mail to help marketers drive great results. For example:
Website activity feeds direct mail segments. Though a simple tag, PebblePost identifies the best segment and offer for the visitor. This digital data kicks off the printing and sending of a mail piece, which arrives at the consumer’s door in three days.
Attribution of mail closes the digital loop. With a known recipient of the mail, marketers can track the funnel of return visits, overall conversions, and redemption of promotions when an offer is included. This connects visits to transactions, with results that are an order of magnitude greater than what marketers experience with digital marketing vehicles.
Optimization happens daily. Unlike a typical direct campaign, which takes weeks to set up, mail, and track for results, PebblePost allows marketers to identify success, adjust messaging, test creative, and improve performance on a daily basis for the next day’s sends.
Digital mysteries do not need to be solved. Bots, fraud, ad blockers, and spam are issues for the digital bad boys. Direct mail is 100% fraud-free, transparent, and guaranteed to be delivered.
How Direct Mail Becomes Programmatic
According to John Nardone, former CEO of x+1 and now CEO of Flashtalking (a UK-based ad server), “The best programmatic marketing recognizes the consumer as he moves between channels and touch points, so that each interaction informs the next.” (see full context here)
When applied to digital media, it means better targeting, better pricing, faster execution, and improved results. When applied to direct mail, programmatic means faster time to market, spending only based on actual customer actions, lower waste from over-serving an audience, and capturing and acting on attribution data more efficiently.
Faster. Direct mail campaigns commonly take from 12-24 weeks to implement and analyze, and they take place entirely in the physical world. With PebblePost, direct mail to an interested customer gets into the postal stream in 12-24 hours.
Smarter. By using clickstream data, CRM insights, and third-party data, direct mail can be sent that is relevant, actionable, and impactful.
More measurable. With the combination of custom offer codes, site tags, viewership data, and the use of real addresses, it is now possible to determine the impact of direct mail on an individual sale. This ultimate measure of ROI is only possible when mail is sent based on real-time intent data.
More profitable. Better attribution determines the optimal creative, offer, or call to action. The end result: more sales, with a higher average order value. Programmatic Direct Mail has delivered results as high as 10x the typical mail response rate, and a five times greater return on ad spend.
Programmatic Direct Mail Brings Direct Mail Back Into The Limelight
In the world of direct mail – in the world of direct marketing – there’s never been anything as immediately game-changing as Programmatic Direct Mail from PebblePost. Programmatic direct mail takes the elements of direct mail that work so well and marries them with the big-data insights and real-time efficiencies of today’s digital marketing ecosystem, giving this high-performing medium a modern twist.
