INTRODUCTION TO DIRECT MAIL

WHAT IS COVERED IN THIS DECK 1 What is direct mail 2 Difference between direct mail and door drops 3 Developments in direct mail 4 UK media market 5 Why direct mail is 3rd largest media 6 Case studies 7 Assignments

WHAT IS DIRECT MAIL?

DIRECT MAIL CONSISTS OF MAIL ITEMS ADDRESSED TO AN INDIVIDUAL AND DELIVERED BY POST Letters, brochures, postcards, samples, catalogues or packages sent to an individual with the purpose of getting a commercial message across. Such marketing messages are addressed directly to: Customers, or Prospects, i.e. those the company thinks would like to become their customers)   Direct mail often drives a specific ‘call to action’, such as: Requesting further information, or Ordering the product or service, or Visiting the company’s website to achieve one or both of these Direct mail is trackable, and responses can be easily measured.

BENEFITS OF DIRECT MAIL Highly targeted. Each campaign can be addressed to a specific audience with a message that is relevant and valuable to those individual customers. Can be personalized, not just with a name but with other information such as renewal dates, purchase history, birthdays etc. This increases customer engagement and responsiveness to messages. Is tangible and tactile. It persists in the home, is memorable and can be shared this increases customer engagement and responsiveness to messages. Research to support stated benefits is provided in subsequent slides that form this deck. The full report ‘The Private Life of Mail is downloadable from this site or www.mailmen.com . Source: The Private Life of Mail

BENEFITS OF DIRECT MAIL It is highly versatile in its marketing application, either in solus or as part of an integrated marketing program e.g. welcome pack, brand builder, subscriptions reminder, recruitment or loyalty program. Direct mail is cost effective and can deliver significant return on investment (ROI). It supports other media and can have a strong multiplier effect within the mix of an integrated campaign. Research to support stated benefits is provided in subsequent slides that form this deck. The full report ‘The Private Life of Mail is downloadable from this site or www.mailmen.com . In an attention poor digital world mail achieves breakthrough Source: The Private Life of Mail

DIFFERENCES BETWEEN DIRECT MAIL AND DOOR DROPS

DISTINCTION BETWEEN DIRECT MAIL AND DOOR DROPS Door drop consists of unaddressed printed items delivered to a group of addresses in a selected geographical area. ‘Unaddressed’ means either no addressee or ‘to the occupier’ Door drops often drives a specific ‘call to action’ such as: Requesting further information, or Ordering the product or service, or Going to the company’s website to achieve one or both of these Typical formats include leaflets, brochures and flyers, but samples or catalogues can be distributed to get the commercial message across. Door drops are trackable and responses can be easily measured. Door drops can be ‘targeted’ to selecting geographical and geo- demographic areas i.e. most typical age or income group resident in the area. Source: GB TGI 2015 Q3 (April 2014 – March 2015) 8

DEVELOPMENTS IN DIRECT MAIL

DEVELOPMENTS IN DIRECT MAIL In the last decade, new technologies have amplified the effectiveness of direct mail by increasing the ability to target audiences and personalise mail. The ability to collect and analyse significant amounts of data has enabled better targeting and the ability to refine messages to increase relevance and therefore responsiveness. The development of printing techniques means that all elements such as imagery, format and messages can be truly personalised The emergence of virtual reality means an interactive, digital experience can be delivered directly into a customer or prospects hands as an integral part of a mail piece. See case studies at end of this deck Personalisation and customisation IKEA, Pet Plan. Data and personalisation- Homebase. Augmented reality Monarch airlines.

UK MEDIA MARKET MARKET

ROYAL MAIL IS THE UK’s THIRD LARGEST MEDIA OWNER 1 2 Advertisers invest £1.1bn in mail each year (excluding production) 3 4 5 Source: Neilsen UK Adspend, 2015.

THE MEDIA MARKET 44% of total spend 24% of total spend Source: Neilsen UK Adspend, Q1 2016

WHY DIRECT MAIL IS THE 3RD LARGEST MEDIA

1. CONSUMERS ENGAGE WITH DIRECT MAIL

THEN AND NOW 1950’s: 50 Messages a day 2016: 20,000 Messages a day

STILL FINITE ATTENTION BRANDS ARE COMPETING FOR

ITS ALL ABOUT ENGAGEMENT To drive results you need to do more than just offer the right product to the right consumer at the right time. You need to make them emotionally motivated to investigate, and ultimately, to buy. That is, it is essential to get them engaged. Average number of advertisement and brand exposures per day per person: 5,000+ Average number of “ads only” exposures per day: 362 Average number of “ads only” noted per day: 153 Average number of “ads only” that we have some awareness of per day: 86 Average number of “ads only” that made an impression (engagement): 12 9/14 Media Dynamics Inc. (USA). Source: 9/14 Media Dynamics Inc. (USA). 16

83% OF THE UK OPEN ALL OR MOST OF ITS MAIL Source: GB TGI 2015 Q3 (April 2014 – March 2015)

ALL TYPES OF MAIL GETS OPENED AT HIGH RATES Source: Royal Mail MarketReach, Ethnographic Quant, Trinity McQueen, 2014

Average length of time spent reading mail each day MAIL GETS ATTENTION 22mins Average length of time spent reading mail each day IPA Touchpoints 5, 2014. Time diary activity 0 all recording ‘looking at post’ as primary activity at a particular point in time. Base of all respondents (51,366). Source: IPA Touchpoints 5, 2014

CONSUMERS LESS ENGAGED WITH EMAIL 21% open acquisition emails 29% open retention emails 51% Emails are deleted within 2 seconds A study of email analytics in 2013 revealed that over 50% of emails are deleted within two seconds of being opened. And the actual open rates were only 21% and 29% for acquisition and retention respectively. There is a strong suggestion that, as more and more content is being consumed on the move (and as people feel they are getting too many emails), the vast majority of emails are not even being opened. And those that are being opened get deleted with little more than a glance. This begs the question, who are you not reaching? Full Report: It’s all about Mail and Email – Working together to create greater 1 to 1 relationships with your customers_ . 2014. 1. DMA National Email Benchmarking Report, 2013 2. Litmus Email Analytics, 2013

75% OF PEOPLE READ/LOOK 1-10 PIECES OF DIRECT MAIL EVERY WEEK Source: GB TGI 2015 Q4 (July 2014-June 2015)

MAIL HAS LONGEVITY. PEOPLE GIVE IT TIME AND KEEP IT IN THEIR HOMES Source: Royal Mail MarketReach, Ethnographic Quant, Trinity McQueen, 2014

MAIL DRIVES ACTION AND IS RETAINED FOR LATER USE AND REFERENCE Source: IPA Touchpoints 6 SuperHub Database – IPA 2015

2. CONSUMER ENGAGEMENT DRIVES ACTION

INCREASINGLY MAIL IS DRIVING PEOPLES DIGITAL BEHAVIOUR Source: Royal Mail MarketReach, Mail and Digital Part 2, Quadrangle, 2014

MAIL CREATES A MEDIA MULTIPLIER EFFECT… Total ROI increased 12% when mail was included in the mix. NB. RROI means Revenue Return on Investment (measure used by BrandScience researchers) it is the same as the vernacular Return on Investment. Mail is driving action to purchase delivering uplift to campaign results and reducing overall cost of sale. Source: Royal Mail MarketReach, BrandScience 2014; advertiser cases including mail versus cases without mail.

…BY DELIVERING RESULTS Campaigns that included mail were: 27% more likely to deliver top-ranking sales performance 40% more likely to deliver top-ranking acquisition levels +27% +40% The BrandScience analysis focused on ROI, but we also wanted to confirm that mail delivered on other commercial measures. Peter Field, an independent marketing effectiveness consultant, analysed the IPA Effectiveness Awards case studies data and compared the metrics between campaigns that used mail and those that did not. The analysis of the IPA Effectiveness Awards databank identified that campaigns that included mail were 27% more likely to deliver top-ranking sales performance and 40% more likely to deliver top-ranking acquisition levels, than campaigns that didn’t.   Source: Royal Mail MarketReach, IPA Databank Meta-Analysis, Peter Field, 2013

CASE STUDIES

VOLKSWAGEN DROVE PROSPECTS INTO DEALERSHIPS AND SALES Background Volkswagen wanted to test their traditional email acquisition model to get customers into showrooms. Solution. A ‘playful and fun’ pack that re-enforced the the ATL campaign proposition of ‘unbeatable value’. The pack included a sheet of VW branded sticking plasters …in case the ‘surprising offers’ made the recipients dizzy with excitement! The pack was mailed to prospects on the VW database, including a group of ‘dormant’ (10 years ago) buyers. Results 4,398 recipients visited their local dealer, with a high proportion purchasing . Delivering an ROI of 3:1.     Assignment to get students thinking about complementarity of media. Using DM to support telly or digital etc. Source: Volkswagen ‘Plaster Pack’, DMA Award (Shortlist), 2014

STREETLIFE USED MAIL AS THE MAIN MEDIUM TO GROW THEIR USER BASE Background Streetlife, a UK social network for neighbours to share practical, local information and advice, make real-world connections and build stronger communities. The goal: to grow user base from 120k to 750k+ in a year, acquiring new users quickly, in a scalable and replicable way as they rolled out to each new area. Solution Streetlife used mail as the primary channel, to target their audience in a precise, personal and impactful way and drive users online. A focused testing approach allowed them to optimize targeting, messaging and creative, hothouse areas and achieve growth before moving on to the next area Background Streetlife, a British social network for neighbours to share practical, local information and advice, make real-world connections and build stronger communities. The goal was to grow user base from 120k to 750k+ in a year, acquiring new users quickly, in a scalable and replicable way as they rolled out to each new area. Solution Streetlife used mail as the primary channel, target their audience in a precise, personal and impactful way to drive users online. A focused testing approach allowed them to optimize targeting, messaging and creative. It also enabled them to hothouse specific areas, to achieve growth and then move to the next area Results Being brave and different worked. Streetlife ‘s number of active users grew by 630% (120k to 880k users), beating their target. 65% of this growth can be attributed solely to mail. Critically, mail recruits have proved more engaged and thus more valuable users. Because mail is shared, it achieved an uplift from multiple occupants at the same address signing up. And because mail was kept, users were still being acquired four months later. The rate of response became predictable and easy to forecast. The testing plan enabled Streetlife to double the mail conversion rate and halve the cost of the campaign over a year. Ultimately Streetlife achieved users at a rate of 5%+ from a cold mailing on an unknown brand. Assignment: To get students thinking about how to build an on-line brand , how do you raise awareness of an online presence. Word of mouth is slow. Consider Go-daddy etc using day time and satalite TV channels etc. What is the USP of mail for this application. Source: Streetlife, 2015

STREETLIFE RESULTS Results Active users grew by 630% (120k to 880k users). 65% of this growth was directly attributable to mail. Critically, mail recruits have proved more engaged and thus more valuable users. The impact of mail was amplified because: It was shared - achieving an uplift from multiple occupants at the same address signing up. It was kept - users were still being acquired four months later. The rate of response became predictable, easy to forecast and plan for. Using a ‘test’n’learn’ approach enabled Streetlife to identify which propositions and creative designs worked best; doubling the conversion rate, and halving the cost of the campaign, over the year. Ultimately Streetlife recruited users at a rate of 5%+ from a cold mailing on an unknown brand. “Some would have said it was counterintuitive to use mail as a primary medium for a social network site. Mail not only delivered -it over delivered.” Nina Whittaker, Head of Marketing at Streetlife Assignment: To get students thinking about how to build an on-line brand , how do you raise awareness of an online presence. Word of mouth is slow. Consider Go-daddy etc using day time and satalite TV channels etc. What is the USP of mail for this application. Source: Streetlife, 2015

IKEA USED DIRECT MAIL TO INSPIRE CUSTOMERS TO REVAMP OUTDOORS Background: IKEA wanted to raise awareness among IKEA FAMILY members of their extensive outdoor range. Solution: Clever use of data identified customers with gardens and created a series of personalised weather forecasts. Using digital printing, weather-responsive, personalised mailers were sent out. Results: Outdoor product transactions increased by 55% and overall sales by 34%. Assignment: to get students thinking about the creative applications for digital print capabilities. How can you use personalisation and customisation to increase the relevance of your message and drive customer engagement. Think too about how that can be used to capitalise on the USP’s of mail in the media mix. Source : DMA, Gold Winner, Ikea, 2013

MONARCH AIRLINES COMBINED MAIL WITH AUGMENTED REALITY TO STAND OUT Background: In the highly competitive ski-holiday market Monarch Airlines couldn't outspend established airlines but needed a way to attract new audiences and engaging them. Analysis of the ‘Ski Club of Great Britain’ database showed Monarch’s routes appealed to independent, adventure skiers, who constantly research destinations, love new experiences and are digitally savvy. Solution: Monarch merged holiday content with technology to satisfy this curiosity, using Mail to create ‘destination inspiration’ in the travel-buying process, and adding rich digital content to give it an extra dimension. The pack used a ‘Maltese cross’ format that unfolded to reveal a mountain range with information on fresh ski routes and resorts served by Monarch. By holding a smartphone over the mailing Augmented Reality (AR) transported them to the resorts, provided destination videos, expert advice and a link to the Monarch website for prices and booking, there and then. Assignment: to get students thinking about creative ways to use augmented reality to increase the recipients engagement with a pack and to allow instant purchase. Personal audio visual messages from sender, rich interactive content delivered into the recipients hands to surprise and delight. Follow the link to watch the video of how this mailing created interaction http://www.royalmail.com/corporate/marketing/showcase/monarch Source: DMA Grand Prix Winner, 2013, WDMP

MONARCH AIRLINES COMBINED MAIL WITH AUGMENTED REALITY TO STAND OUT Results: Monarch achieved 7,201 bookings from this campaign Adding £2.2 million in revenue; which resulted in an average spend increase of 24.5% and an impressive ROI of 18:1. Monarch was the first UK airline to combine mail with AR, breaking new ground for the industry. Their website saw 21.7% of mail recipients visit, with one even tweeting pictures of the pack, thanking Monarch for the great information. Assignment: to get students thinking about creative ways to use augmented reality to increase the recipients engagement with a pack and to allow instant purchase. Personal audio visual messages from sender, rich interactive content delivered into the recipients hands to surprise and delight. Source: DMA Grand Prix Winner, 2013, WDMP

PETS AT HOME CREATED A PET CENTRIC LOYALTY SCHEME Background Pets at Home wanted their loyalty scheme to deliver incremental revenue. Solution: The loyalty programme was highly tailored to deliver relevant content. Audiences were segmented and the mail packs personalised with pet names and tailored content. Results: 88% of members have swiped their VIP card at checkout. Average transaction values are 37% higher than for non-members and the number of customers spending was boosted spending by 20%. Assignment: to get students thinking about the creative applications for digital print capabilities. How can you use personalisation and customisation to increase the relevance of your message and drive customer engagement. Think too about how that can be used to capitalise on the USP’s of mail in the media mix. Source: DMA, Gold Winner, Pets At Home, 2013

HOMEBASE CRM JOINED DATA INSIGHT WITH DIGITAL PRINT TO MAXIMISE SALES Background: Homebase wanted an alternative to store-wide discounting every other weekend to drive DIY sales but home improvement projects are irregular and unpredictable Solution: Data analysis identified ten purchase patterns proven that could lead to future spend if Homebase could communicate close to the opportunity. Personalised direct mail was sent within 6 days of product purchase highlighting relevant messages and offers to drive additional visits and revenue. Results: The programme moved average response rates from 9% to 46%. It delivered 2% of total sales (£30.4m per year) and shifted ROI from 120% to 346%. Assignment: to get students thinking about the kinds of variables/data that could be used to select and audience. Think also about testing the performance of different data selections etc. Source: DMA, Silver Winner, Homebase, 2013

ASSIGNMENTS

VOLKSWAGEN: USING TARGETTING AND FUN Background Volkswagen wanted to test mail versus their traditional email acquisition model to get customers into showrooms A ‘playful and fun’ pack re-enforced the ATL campaign proposition of ‘unbeatable value’. The pack was mailed to prospects on the VW database, including a group of ‘dormant’ (10 years ago) buyers. Exercise Using a current TV campaign, explore how you could use Mail media to engagement with the audience and enhance recall? How might you use segmentation and personalisation? Source: Volkswagen ‘Plaster Pack’, DMA Award (Shortlist), 2014

STREETLIFE 1: BUILDING ONLINE BRANDS Background Streetlife, a UK social network for neighbours to share practical, local information and advice, make real-world connections and build stronger communities. The goal: to grow user base from 120k to 750k+ in a year, acquiring new users quickly, in a scalable and replicable way as they rolled out to each new area. Consider how you might communicate with local communities to raise awareness of the online brand. You need to create chatter and drive your audience to go online Remember – the client wants to test small areas, test concepts, learn what works, improve and then roll-out to new areas What is the USP of mail for this application? Source: Streetlife, 2015

STREETLIFE 2: WHAT THEY DID Solution Streetlife used mail as primary channel, to target the audience in a precise, personal and impactful way to drive users online Using ‘test’n’learn’ approach allowed them to optimize targeting, messaging and creative, hothousing areas to achieve growth before moving on to next area Ultimately, Streetlife recruited users at a rate of 5%+ from a cold mailing for an unknown brand. Results Active users grew by 630% (120k to 880k) 65% of growth directly attributable to mail Mail recruits were more engaged and more valuable users The impact of mail was amplified because: It was shared – multiple occupants at the same address signed up It was kept – new sign ups were acquired up to four months later The response rate became predictable, easy to forecast and plan Ongoing testing enabled Streetlife to: Identify effective propositions and creative designs Double conversion rate Halve recruitment costs over year Source: Streetlife, 2015

IKEA: DATA TO IDENTIFY KEY TARGETS Background: IKEA wanted to raise awareness of their extensive outdoor range among IKEA FAMILY members Clever use of data identified customers with gardens and used digital printing to created a series of personalised weather forecasts. Exercise: How might you use data to build a targetted campaign? What sort of data might you use? How could you use personalised digital print capabilities to customise your campaign? How can you increase the relevance of your message and drive customer engagement? Source : DMA, Gold Winner, Ikea, 2013

MONARCH AIRLINES: USING AUGMENTED REALITY TO CREATE STAND OUT Background: Monarch Airlines merged holiday content with AR technology to create curiosity and ‘destination inspiration’ during the travel-buying process. Exercise Think about a brand of your choice. Consider creative ways to use augmented reality and mail to increase the recipients engagement with a pack How could you use AR to engage with an audience and create an instant purchase? What sort audio visual messages could you use? What type of rich, interactive content could you deliver to the recipients to surprise, intrigue or delight them? Follow the link to watch the video of how this mailing created interaction http://www.royalmail.com/corporate/marketing/showcase/monarch Source: DMA Grand Prix Winner, 2013, WDMP

PETS AT HOME - 1- USING DIGITAL PRINT USE TO PERSONALISE MAILINGS Background Pets at Home wanted their loyalty scheme to deliver incremental revenue Audiences were segmented and mail packs personalised with pet names and tailored content Exercise Digital print techniques enable short run creative designs, personalised, even individualised copy. How can the creative applications for digital print capabilities be used to enhance a campaign? How can you use personalisation and customisation to increase the relevance of your message to drive customer engagement? How can these characteristics be used to enhance a multi media campaign? Source: DMA, Gold Winner, Pets At Home, 2013

HOMEBASE: USING CRM AND PROGRAMATIC Background: Home improvement projects are irregular and unpredictable and Homebase wanted an alternative to store-wide discounting every other weekend to drive DIY sales. Data analysis identified ten purchase patterns proven to lead to future spend which were incorporated into a highly targetted ‘trigger-event’ driven CRM campaign of personalised direct mail, sent within 6 days of to drive additional purchases Exercise: Consider a possible decision making process related to a brand and product that you know What kind of variables and data could be used to select an audience for a complementary mail media campaign? How would you test the performance of different data selections? Source: DMA, Silver Winner, Homebase, 2013