Direct Mail ROI Surpasses Digital Mediums
Direct mail return on investment surpasses top digital mediums, according to findings from the 2022 Association of National Advertisers (ANA) Response Rate Report.
Published January 2023, ANA’s report highlights 2021 benchmark performance and cost data across direct marketing channels including direct mail, paid search, digital display, email, social media, and SMS.
The 2022 ANA Response Rate Report shows direct mail return on investment surpasses digital mediums. © Association of National Advertisers
Key Findings from the 2021 Response Rate Report
Direct Mail Return on Investment
Direct mail ROI is the strongest with letter-size mail, outperforming all other marketing media and reporting the highest ROI of 43% when sent to prospect lists. Email follows with a ROI of 32%, while social media advertising rounds out the top three with a 29% ROI.
Most Used Direct Marketing Media
Direct marketers report email marketing (72%) as the most used media type for all campaigns in 2021, declining 10% since the 2020 study. Social media advertising (54%), paid search (44%), digital display (38%), direct mail (35%), and SMS (20%) top off the most used direct marketing media list.
For many businesses, solo direct mail is the most effective way to grow, whether through customer acquisition, retargeting, or retention. Use our Direct Mail Impact and LTV Calculator to determine if direct mail is the right fit for your brand based on your product/service, revenue model, customer lifetime value, and customer acquisition costs.
Future Marketing Channel Strategy
Nearly 82% of ANA respondents plan to continue or increase the use of direct mail. At least half of those surveyed plan to increase their use of email, paid search, social media advertising, and SMS over the next year. Social media advertising usage is the least likely to decrease. In the future ANA surveys, DTC participants are most interested in learning more about QR codes, chatbots, and live chat technologies usage.
Patrick Carroll, Director of Strategy at SeQuel Response, gave his perspective on the report's findings, “The study demonstrates how more marketers are beginning to recognize the wealth of opportunities that direct mail provides. For another year, direct mail has the highest ROI of any marketing channel. Even though it’s still underutilized, 50% of respondents said that they will increase usage this year. Direct mail is a legacy channel that will continue to grow in popularity as many digital mediums, such as email marketing, begin to plateau.”
Direct Mail Usage
Direct mail marketing accounts for 35% of DTC campaigns, trailing slightly behind digital display advertising (38%) and ahead of SMS (20%). Direct mail ranks third overall in B2B campaigns, at 44%, sitting in front of paid search (29%), digital display advertising (29%), and SMS (6%). Overall, the primary purpose of a direct mail campaign is to make a direct sale (37%).
Online tracking, such as Personalized URLs (PURLs), is the preferred direct mail response rate tracking method by 67% of respondents. Codes or coupons (48%), via a sales transaction linked to direct mail (45%), matchback (42%), and call center or telephone (41%) follow. List coding (25%) and derived or calculated (19%) and are the least used response metrics.
Preferred by more than half of marketers, the postcard is the most used direct mail format for both house and prospect mailings. Postcards are cost effective and earn an average direct mail ROI of 29.5%. Postcards use less material than letter packages, resulting in lower printing and production costs. There is also a postage discount because the USPS now accepts 6" x 9" postcards at the First-Class Postcard rate, which is double the regular 4.25" x 6" size.
Letter-sized envelopes are a close second, with 54% of marketers using the compact format when mailing to house lists and 61% when mailing to prospects. Letter-sized envelopes also prove to deliver the best direct mail ROI at 37%.
Oversized envelopes have an average ROI of 21.5% and dimensional packages have an average a direct mail ROI of 19%. House lists receive oversized envelopes 29% of the time and dimensional packages 12%. When mailing to prospects, dimensional packages (18% of direct mail mailings) are equally likely to be used as oversized envelopes.
Most organizations in the study leveraged multiple media in their direct marketing efforts. When deploying multichannel marketing campaigns, the average number of media types used by study participants was 3.8 (up from 3.1 in the previous study). In comparison to B2C marketers, who used an average of 3.6 channels, split B2B/B2C marketers reported utilizing 3.3 channels.
How DTC marketers are using direct mail
Direct mail is the second most usage channel in DTC specific campaigns. Among DTC marketers, the intent of a direct mail campaign is to make a direct sale (37%), to engage customers (21%), and to engage prospects (16%). Increasing brand awareness (6%), communication (2%) and driving traffic to retail locations are also among top priorities for DTC mailers.
Most DTC direct mail campaigns include a combination of prospect and house lists. 64% of DTC marketers prefer postcards when mailing to prospects. When mailing to house lists, postcards (59%) are also used most frequently.
Want to learn more about direct mail’s return on investment and performance?
- Find results from past ANA Response Rate Reports
- Download our FREE Direct Mail Industry Benchmark Report
- Optimize your direct mail ROI with a modern testing approach
- Contact a SeQuel marketing strategist today