Diving into “Terra Incognita” : The Direct Mail

www.grp.beGRP SYMPOSIUM « iNTO TRANSiTiON » 01/04/10

Diving into “Terra Incognita” : The Direct Mail

Frédéric JadinonDM Media Expert


Direct Mail…..


• Measuring the “total picture”:IPC Survey

• Zoom into the Direct Mail investments: “the DM pige”

• Standard measure of the impact of DM: “the DM Barometer”


What is the real “share of wallet” ?

www.grp.beGRP SYMPOSIUM « iNTO TRANSiTiON » 01/04/10 5

IPC ran extensive international study to beter understand the media ‘usage’

5

1,027 interviews in companies with a turnover of more than 0.25m € per year

Senior executives with Marketing & Communication expenditure responsibility, managing directors or business owners

IPSOS, 2008 Results weighted and extrapolated to represent total universe of companies

in Belgium

OBJECTIVES

What is the media spending in Belgium and the media usage rate ? How are the different media perceived by advertisers

METHODOLOGY


Media Channels covered: a way to consider the 360°

Direct Marketing

Online Marketing Classic Media with Response

E-Mail Marketing Internet Site Banner Advertising Paid Search

Events Promotional

Campaigns Loyalty

Magazines Fax

Advertising

Print with response

Insert with response

Outdoor with response

TV with response Radio with

response Cinema with

response

Print Insert Outdoor TV Radio Cinema

Other Media

Classic MediaTraditional

Direct Marketing

Addressed Mailings

Unaddressed mail Outbound

Telemarketing Inbound

Telemarketing Mobile Marketing


Direct Marketing : Internet Site

Direct Mail

E-Mail

Unaddressed mail

Banner advertising

Telemarketing

Inbound telemarketingOutbound telemarketingPaid-search

Mobile Marketing

Classic Advertising (with/without response) :

Print advertisingInserts

Outdoor

Radio

TV

Other Advertising :Trade fairsCustomer magazines

Promotional camp.

Couponing

Fax advertising

Data: All values in %Base: All companies with a turnover of at least 0.25 m €/year; N=128,376 companies (n=1,027)

37

13

9

9

4

70

34

32

17

14

11

9

6

4

2

OverallWith response mechanisms

Internet has the highest usage rate, followed by print advertising, trade fairs & Direct mail

Media penetration (%)

1 2

3

4


Data:All values in € bn - those costs include both external and internal costsBase:All companies with a turnover of at least € 0.25m /year: Universe: 128,376 companies (n=1,027)

Source: IPC survey – 2008 – 1027 interviewed companies (IPSOS)

Direct Marketing represents 39 % of total media investments

€ 2.86 bn.

€ 3.18 bn.

€ 1.35 bn.

Other; 18%

Classic media; 43% Clasic media with response mechanism;

7%

Telemarketing; 6%

Unaddresssed mail; 6%

Online (e-mail; internet; paid search) ;

8%

Direct Mail; 12%

Total Marketing & Communication Expenditure (full costing) - Belgium 2007: € 7.40 billion

8

Direct Marketing accounts for 39% of all advertising expenditure


Only 21% of Belgian advertisers are “cross media”

User Share of Cross-Media Campaigns

User of cross-media campaigns Non-User of cross-media campaigns

Number of campaigns:

112,393 campaigns

Ø number of campaigns per company:

4.9 campaigns/ year

2 media

3 media

4 media or more

Often 2 media, very few with 3 or more medias in their campaigns

Data: All values in %Base: All companies with a turnover of at least €0.25 m /year and which are doing direct marketing; Universe:108,595 companies (n=913)


Only 21% of Belgian advertisers are “cross media”

User Share of Cross-Media Campaigns

User of cross-media campaigns Non-User of cross-media campaigns

Often 2 media, very few with 3 or more medias in their campaigns

DM + WebDM + PrintDM + Email

7%7%6%

Internet + Print 9%

Among them, when DM involved, …

Internet + Email 6%Print + TV 4%

Data: All values in %Base: All companies with a turnover of at least €0.25 m /year and which are doing direct marketing; Universe:108,595 companies (n=913)


Advertisers consider DM as most efficient mainly for short-term sales and retention

Data:All values in %Base: All companies using the specific medium

Source: IPC Direct Marketing Intelligence 2008 – IPSOS 1027 belgian companies

11






Before 2009, lot of questions without answers …

MDB (Mediaxim)

Highly detailed analysis on media investments

Weight of Direct Mail in my mix ???

Evolution of Direct Mail pressure in my sector ???


The Post, in collaboration with BDMA, initiated a survey project to measure Direct Mail pressure

Survey objectives are: To track gross expenditures of Addressed Direct Mail To develop a trustworthy and recognised tool which builds information

similar to other media (Cim-MDB)

Project developped based on feedback from the market: Different work – information meeting with BDMA and UBA Official support of UBA

Preference for Mediaxim as operator: Expertise Willingness to be complementary to CIM-MDB, not to build another standard


How to build a strong “tool” without reinventing the wheel


Starting with the DM universe: which direct mail does it cover ?

• Addressed paper mails using the ‘direct mail’ tariff of the Belgian post:• No international DM• No advertising mail using another tariff• > 500 pieces

• Using a ‘deposit’ in one of the 26 sorting Center (ie 97% of DM value)

• With a proven “advertising” purpose (Mediaxim check)


The key steps of this project

Information collection

Information Treatment

Valorisation

Access


Step 1All material is sent to Mediaxim



Valorisation

Access

Transactional information needed to calculated gross

value

+

Daily transfer

All DM Specimen

Unique key

(deposit identifyer)

+

Regular transfer from 27 sorting centre


Step 2Mediaxim identifies sector and sender



Valorisation

Access

DM specimen arriving at Mediaxim DM scan

Visual IdentificationSorting:Economical group – Sector – Sub sector

AdvertiserGroup - Advertiser – Brand


Step 3Valorization is based on official tariff grid



Valorisation

Access

274 different prices in function of volume, sorting type, format, weight: from 0.383 to 2.727 (1 to 7)Revision currently in discussion


Step 4Information is made accessible



Valorisation

Access

Subscription through Mediaxim

In a separate environment


Diving into some results


In addition to mass media (Cim), Direct Mail represents about 10% of gross media investments

Gross Media investments 2009(in mio eur)

Sources: DM pige-Mediaxim (Direct Mail); Cim-MDB, Mediaxim (other media)

TV; 39,3%

Dailies; 23,0%

Radio; 11,3%

Postering; 8,9%

Free Press; 4,8%

Internet; 4,0%

Magazines; 7,8%

Cinema; 0,8%

Mass Media(CIM MDB)

Direct Mail(Pige DM)

9,9%3169

349,1

3169


In a “turbulent” communication market, Direct Mail hold relatively a good position

345

1204,8

736,7

377,2

299,9

249,5

150,4

119,1

26,8

1246

349,1

1246,8

730,3

357,7

281,7

247,5

152,2

128,1

24,6

1240,0

Direct Mail

TV

Dailies

Radio

Magazines

Postering

Free Press

Internet

Cinema

Total

20082009

Gross Investments evolution per mediaJan-dec 2009 vs. Jan-dec 2008

- 6,1%

+1,2%

+ 1,2%

+ 7,5%

- 0,8%

- 0,9%

- 5,2%

+ 3,5%

In millions eur

DM Pige

CIM-MDB

- 8,2%

3.168,93.164,4 + 0,1%

- 12,1%

-7,6%

+ 6%

- 5,7%

- 11,7%

-2,0%

+ 9,2%

- 9,8%

-1%



75% of gross investments are concentrated in 5 sectors

103,1

98,4

32,9

8,7

8,3

6,7

5,9

5,5

5,2

5,2

4,9

4,0

3,5

3,1

42,5

11,3

POINT DE VENTE

VENTE A DISTANCE

BANQUES - CREDITS - ASSURANCES

OPERATEURS

INDUSTRIE AUTOMOBILE

ASBL - INITIATIVES PUBLIQUES

MEDIA

SERVICES TOURISME LOISIRS

SYNDICATS - PARTIS - MUTUALITES

ENSEIGNEMENT

EDITIONS

ENERGIE

MANIFESTATIONS SPECTACLES

FEDERATIONS - ASSOCIATIONS

PRODUITS DE SOINS

Autres

Direct Mail Gross investments, 2009Direct Mail Gross investments, 2009

29,5%

28,2%

9,4%

3,2%

2,5%

2,4%

1,9%

1,7%

1,6%

1,5%

1,5%

1,4%

1,1%

1,0%

0,9%

12,2%

Source: DM Pige Mediaxim-Post

In millions eur in %


Most key sectors grew, except Finance – Car

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

POINT DE VENTE

VENTE A DISTANCE

BANQUES - CREDITS - ASSURANCES

OPERATEURS

INDUSTRIE AUTOMOBILE

ASBL - INITIATIVES PUBLIQUES

MEDIA

SERVICES TOURISME LOISIRS

SYNDICATS - PARTIS - MUTUALITES

ENSEIGNEMENT

EDITIONS

ENERGIE

MANIFESTATIONS SPECTACLES

FEDERATIONS - ASSOCIATIONS

PRODUITS DE SOINS

+0,9%

+1,2%

-8,8%

+21,9%

-2,7%

+7,1%

-1,3%

+10,9%

-10,4%

+2,9%

+14,1%

+23,3%

+2,5%

+3%%

+35,1%

Source: DM Pige Mediaxim-Post

0,9

1,1

-3,2

-0,2

0,5

-0,1

0,6

-0,6

0,1

0,6

0,9

0,1

0,1

0,8

2,0

Variation of Direct Mail Gross investments vs. 2008(Jan-Dec 2009 vs. 2008, in key sectors representing about 85% total inv.)

Variation of Direct Mail Gross investments vs. 2008(Jan-Dec 2009 vs. 2008, in key sectors representing about 85% total inv.)

In millions eur in %


But for those 2 key declining sectors, DM increased its weight

8,78,9

2008 2009

32,836,0

2008 2008

AutomotiveAutomotive

Banking - FinanceBanking - Finance

-3% -9%

DM Gross Investments

DM Gross Investments

3,4%3,2%

2008 2009

+6%

DM index comparedto Cim-MDB

DM index comparedto Cim-MDB

15,2%14,4%

2008 2009

+5%

307,5300,1

2008 2008

All other sectorsAll other sectors

+2,5%

10,1%10,1%

2008 2009

-

Sources (03/02/2010): CIM-MDB, Mediaxim (Mass Media); DM Pige Mediaxim-Post (Direct Mail)


This tool reveals also that penetration of DM varies strongly across sectors

Gross ATL media & DM investments in Top mass-media sectors(in mio eur gross, Total 2009)


349

271245

183 174 168

10979

57 50

12

103

7 933

4 11 5 6 0 0

98

Retailer Media Automotive Bank &Finance

Leisure,events,

entertaining

TelecomPublishingTourism Care Soft drinksMail order

Mass Media (source: Cim-MDB, Mediaxim) Direct Mail (source: DM pige-Mediaxim)






A ‘quest’ for a kind of ‘beta’ for Direct Mail:The « DM Barometer »

Standardised post-test surveys(5 days after drop date, during 3 days)

Key measures– Recall campaign and content– Behaviour: opening and reading rate– Campaign evaluation– Intention of purchase / action

30


Our 44 DM barometer show a high recall rate for Direct Mail

31* Conversion rate average is an average of different conversion rates and doesn't correspond to conversion rate between average

Recall having received it

Opened it Recall content(content or message)

Intent to act

“Do you remember receiving a DM?”

“What did you do with the DM?”

“Can you describe the DM?” “Do you have intention to react?”

Read it

AverageN= 44 cases 69 41 37 2446

Conversion rate(AVG)*N= 44 cases

65 8988 61

DM B2C

High recall content when opened

High reading rate


Scores are strongly lower for unaddressed mail

32

Recall having received it

Opened it Recall content(content or message)

Intent to act

“Do you remember receiving a DM?”

“What did you do with the DM?”

“Can you describe the DM?” “Do you have intention to react?”

Read it

AverageN= 19 cases 36 14 9 219**

Conversion rate(AVG)*N= 19 cases

47 6255 22

Distripost door to door folders

* Conversion rate average is an average of different conversion rates and doesn't correspond to conversion rate between average

** Opening vs recall rate calculated on 7 D2D cases with envelope


The Post has run extensive research with > 45.000 interviews (BtoB – BtoC)

Generic media surveys (e.g., Mail moment, E loves P, How direct are women?)

20 Multi-media surveys

>80 DM impact surveys

> 330 response rates - benchmark data base

33


Transition implies a broadening of our understanding of the media landscape

• Transition into an ‘helicopter view’ of total “out of pocket”:– Direct Marketing accounts for about 40%– How do ALL (?) Touchpoints work together

• Transition towards broader possibilities of Media Mix analysis: DM pige is a step in this direction

• Transition with media specific but complementary impact standards– Eg DM ‘beta’ to be defined, combining recall (69%) and recall content

(37%)– DM opening rate (post-test based: 65%; diary based: 78%)


Transition


Thank you

Presentation available on www. DMPlaza .be

[email protected]

0479 429 159


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Diving into “Terra Incognita” : The Direct Mail