Direct mail is playing an ever-larger role in promotion. Whether for coupons or sample distribution, building buzz for product discounts or driving consumers to the Web to try online sweeps, direct marketing is the name of the game.
In fact, U.S. spending on direct mail is projected to grow 16% from $51.4 billion last year to $59.6 billion in 2007. Spending on consumers will reach $35.1 billion, up 17.4% from $30.5 billion; expenditures to reach businesses will jump 15.1% to $24.5 billion from $20.9 billion, according to the Direct Marketing Association.
Of all the tactics listed in PROMO's 2005 Industry Trends Report, marketers most often cited direct mail (37.5%) as a top spending priority last year.
And it works for a broad assortment of brand categories. Direct mail is a critical component of Harrah's Entertainment's marketing strategy and drives most of its revenues, largely tracked back to mailings to members of its loyalty program, Total Rewards.
The casino hotel operator mails about 150 pieces per year to its millions of members with offers that include hotel discounts, coupons to redeem for $10 cash, invitations to special events and other promotions.
The mail pieces are “highly customized” based on Harrah's rich customer database.
For example, last year Harrah's replayed a successful promotion where winners dig in the Las Vegas desert to find $1 million. About $20 million was spent on advertising the event ncluding direct mail to all of its active customers.
“Our customers really appreciate that we recognize where they are in the life cycle and can recognize that relationship and talk to them in a very specific manner giving them offers that are relevant,” says David Norton, senior VP-relationship marketing for Harrah's Entertainment, Las Vegas.
Sales generated by direct mail totaled $747.6 billion in 2004 and are expected to rise to $954.7 billion in 2007. B-to-C sales reached $457.3 billion last year and B-to-B sales totaled $290.3 billion, the DMA found.
Response rates to direct mail lifted slightly to 2.73% in 2004 from 2.54%. A few industries — wholesale trade (7.5%), entertainment and recreation (5.29%) and eating and drinking establishments (4.50%) reported the highest response rates, but based on very small samples. The industries that used direct mail to the greatest advantage were nonprofit fundraisers (4.42%), consumer packaged goods (3.11%) and retail stores (3.03%), the DMA said.
Last year, the American Institute of CPAs took first place in the 2004 PRO Awards in the direct marketing category for its Catch Me if You Can promotion, part of a $25 million five-year multi-media push to generate interest and excitement among high school and college students for considering a career in accounting.
At startheregoplaces.com, the hub of the campaign, the online gaming contest, Catch Me if You Can, let students solve 12 forensic accounting mysteries to vie for cash prizes. Direct marketing targeted professors and 900,000 business, accounting, IT and economics majors driving them to the site. More than 10,000 students registered, three times 2003 participation levels. More than 6,000 opted for more info.
At the time, the judges said: “Very clever work in a boring field.” “It was ‘Revenge of the Nerds’ — it added drama to a dry profession.”
Louise Hraur De Sina, the director of advertising and communications for the American Institute of CPAs, says that direct marketing — including direct mail and e-mail — played a key role in the program.
“It is the engine that drives the campaign,” she says. “It is the vehicle that gets the students to the Web site. It allows us to build the relationship between the CPA profession and the high school and college students.”
To date, the program has generated more than 800,000 respondents and is set to launch its newest element, a custom published magazine, Start Here. SNAPSHOT 2004
Consumer direct mail up 17.4% in 2004, to $35.1 billion in the U.S.
B-to-B direct mail up 15.1% in 2004, to $20.9 billion
37.5% of brand marketers put direct in their top three spending tier
Sales via direct to reach near $955 billion by 2007
