Email has retained its title as the top direct-marketing advertising medium. But it is slipping a bit.
Of all direct marketers, 82% use email, according to Response Rate Report 2021: Performance and Cost Metrics Across Direct Media, a study released Monday by the ANA. Social media comes in second, at 74%.
But email has lost 6% since the last Response Rate Report in 2018, while social has grown by 17%.
Perhaps worse, the study says direct mail produces the highest ROI — a surprise, given that direct mail postal and printing costs would seem to be prohibitive. Indeed, email comes in third, with ROI of 93%, while SMS is second with 102%.
That seems like big news — until you scroll down. That high direct mail ROI reflects mailings to prospect lists for the purposes of acquisition.
Prospect email blasts may be more expensive here because of list costs. But it’s not a fair comparison, given that email marketers are constantly being urged not to prospect — at least unless the lists being used are permission-based, not least by the ANA.
It could be that direct mail produces a higher conversion rate, but that was unclear in the announcement.
That’s not stopping marketers. Of those polled by the ANA, 52% use a mix of house and prospect lists. Another 32% use house lists only, while 9% use prospect lists with third-party data and 7% use prospect-house lists of potential customers.
Brands email to house lists to communicate with current customers (39%) and to generate revenue (34%), increase brand awareness (22%), communicate with former customers (13) and for other purposes (4%).
Surprisingly, the respondents also hope to make money from prospect emails. Their main goals in prospect campaigns are to engage potential customers, generate revenue (33%), increase brand awareness (24%) and for other purposes (4%).
The prospecting acquisition cost rose from $40.26 in 2019 to $44.10 in 2020, and for house file mailings it increased from $30.17 in 2019 to $30.97 in 2020.
B2B companies were most likely to use prospect mailings to generate revenue (42%) and mixed B2B-B2C companies were most likely to use them to increase brand awareness (31%) and to engage potential customers (47%).
Open rates for house lists averaged 37% in 2020, up from 32% in 2018. For prospect lists the average was 32%, compared to 29% in 2018. Of course, this was before Apple implemented its Mail Privacy Protection.
Overall, the biggest users of email are technology and communications firms (88%), financial services/insurance providers (82%) and retailers (82%). Among direct mailers, 41% use a mix of house and prospect lists, 33% utilize mostly house lists and 26% prospect or potential customers, sometimes using third-party data, a majority of the time.
Letter-size envelope mailings to prospect lists have a CPM of $331, a CPR of $63.21 and the fabled 112% ROI. Mailings to house files have a CPM of $427, ROI of 88% and CRP of $45.70.
The ANA did not respond to a request for comment at deadline.
Direct mail works best when postcards are sent to house lists — the ROI is 92%. Dimensional and oversized envelopes each topped 90% ROI.
Don’t fear for email — it comes out on top (barely) when the respondents are asked what they plan to do over the next 12 months. Fifty-three percent will increase their email use, while 52% will increase their paid search, 50% will rev up social media and 50% will do more SMS.
“This important study demonstrates that traditional forms of direct marketing continue to be powerful engines for accelerating brand growth,” said ANA CEO Bob Liodice.
The ANA surveyed 581 marketers from February through July 2021. Of those polled, 56% are from firms with annual revenue of $25 million or less, 24% are from those with $26 million and $500 million, and 20% are from firms with over $500 million.