Analytics is the end game

Do you spend a lot of time on YouTube? If so, you may have already seen this but I was surprised to see the MC Hammer video on YouTube.  Am I the only one surprised to hear the words “behavioral targeting” being spoken by MC Hammer?  Who knew that MC Hammer and I would have something in common.  We both believe that analytics enables you to allocate your marketing dollars effectively.

If you haven’t seen it, watch MC Hammer on Analytics from YouTube.

Three reasons that open rates don’t matter

Clients ask me about e-mail open rates and, honestly, they are not what they used to be.  In fact, they no longer matter for many reasons but here are my top three:

1. False negatives.  An e-mail is considered opened when a tracking image is downloaded.   However, major e-mail clients like gmail disable images by default.   If you read the e-mail with the images disabled, it will never be counted as an open.   And what about text e-mails?  They do not include images and thus do not count as opens unless you click on a link (and even that might be e-mail software dependent).

2.  False positives.  Let’s assume that images are enabled.  E-mails displayed in a preview pane are considered opened because the images were downloaded.  But who always reads the e-mails in their preview pane?  I don’t and I bet you don’t either.   So you have undercounting due to the disablement of images and overcounting due to the use of preview panes.

3.  What really matters is the action taken.  To me, the true success of an e-mail marketing campaign is whether you drove the desired action.  Did you sell more widgets as a result of the e-mail campaign?  If not, the open rate is moot.

US mail volume declines

The United States Postal Service has announced its third quarter results for Fiscal Year 2008.  It reported a 5.5% decrease in mail volume for the same period last year.  Mail volume in the quarter was 48.5 billion pieces.  First-Class Mail and Standard Mail also fell 5.5 percent from the third quarter of FY2007.

Direct mail is not dead

A colleague of mine recently told me, “direct mail is dead.”  I can certainly understand why he would say this.  First, mail volume has been falling.  Unsolicited direct mail by the financial industry has declined due to concerns about the credit markets for example.  Given the continued economic challenges in the United States, mail volumes are expected to continue to fall.  Second, direct mail is viewed as junk mail that quickly goes into the waste bin.  Add to that concerns about the environment and waste.  Sending multiple mailings to the same customers or prospects can alienate them. Third, e-mail is an attractive alternative where e-mail addresses exist, as it is cheaper and offers many of the same advantages of direct mail.

However, as an article in the New York Times yesterday detailed, direct mail is not dead but undergoing a transformation.   The return on investment from direct mail is too high for it to be abandoned.  When direct mail is targeted to the right person at the right time, it can be incredibly effective.  I know because it worked on me.  A few years ago I was involved in a volunteer committee that donated company funds to non-profit organizations.  One of the other volunteers suggested that we give money to Doctors without Borders and in the process educated us about the organization.  Around the same time, I read about their mission and efforts to help individuals in the Middle East in the New York Times.  Thus, when an unsolicited letter requesting a donation arrived in my mailbox shortly thereafter, I gladly gave to the organization. 

Direct marketers are pushing for direct mail processes to be more efficient, for the offers to be more targeted and the pieces themselves to be more environmentally friendly.  The DMA and others are pushing for all sorts of improvements including cleaning or purging purchased and house lists of undeliverable addresses, using soy inks and recycled paper in mail pieces, and recycling waste materials.  It remains to be seen how effective they will be; however, it is in their best interest to develop standards.  They run the risk that future legislation will dictate what they can and cannot mail.

Direct mail is not dead but rather will be used more sparingly and in concert with other channels, especially e-mail.