1. Lifting the lid on communication channels in the Digital Age: the real story.

2. A completely new way of looking at mail New independent research reveals how to reach customers and influence them to consider a purchase, and to actually purchase. Produces insights into which communication channels are actually most effective. Debunks a common view that email and SMS might work better than ‘old hat’ paper-based communications Personally addressed, paper-based communications by mail remains among the most effective tools available to reach and influence customers and the outcomes business wants.

3. Research Methodology Qualitative 32 in-depth interviews with senders of communications 8 focus groups with personal and business communication receivers Quantitative  1,550 computer-aided telephone (CATI) interviews  Australia wide  4 respondent groups –personal receivers –business receivers –senders to personal –senders to business

4. Media Channels Studied We included 11 key media channels in the research that represent most marketing communication activity and spending in Australia: PaperElectronic & Telephony Mass/ Traditional Media Other – Personally Addressed Mail – Generic “To the Householder” Addressed Mail – Catalogue / Brochure – Email – Telephone – SMS – Television – Radio – Newspaper – Magazine – Door-to-Door

5. Channel Attributes Easy to reject Enjoyable Trustworthy Informative Communication channels were compared on the basis of the following attributes Convenient Acceptable Entertaining Reliable Appropriate Objectionable Annoying Time consuming Difficult to ignore Disruptive

6. Two Perspectives  Spoke with both Receivers and Senders of Marketing Communications − Consumer segment − Business segment  Are there mismatches between what receivers prefer and what senders think receivers might prefer?

7. Perceptual Map of Communication Channels and Their Attributes – Receivers in the Consumer Segment ▲easy to reject

8. Perceptual Map of Communication Channels and Their Attributes - Senders in the Consumer Segment ▲ easy to reject

9. Perceptual Map of Communication Channels and Their Attributes - Business Receivers

10. Perceptual Map of Communication Channels and Their Attributes - Business Senders

11. Part Two: A Designed Experiment Why - to assess the relative effectiveness of media channels for: Promotional offers Transactional communications How - created two credible hypothetical sales propositions, both of which might reasonably be promoted through any or all eleven media under consideration Who Current customer (25%) Current non-customer (75%)

12. Designed Experiment – Consumer Scenarios Scenario 1: Superannuation Promotion (50%) Scenario 2: TV Product Information (50%) Scenario 3: Mobile Phone Bill (100%)

13. Designed Experiment (cont…) Scenario 1: Superannuation Promotion (50%) Imagine that a superannuation provider wants to communicate to you a promotion where new members of a particular fund are charged no fees for the first 12 months. Over the last ten years, the fund has returned an average of 7.5% per annum. Scenario 2: TV Product Information (50%) Imagine that a department store wants to communicate to you information about a new wide-screen plasma TV. The TV is not expensive, 42 inches (105cm) wide and capable of displaying high-definition images.

14. Designed Experiment – Business Scenarios Scenario 1: Temp Agency Promotion (50%) Scenario 2: Portable Projector Information (50%) Scenario 3: Catering Invoice (100%)

15. Attitudes Welcome, Pleasant Purchase Intention Act on the offer Interest Consider, Investigate Outcomes for hypothetical scenarios

16. Personal Receivers –Enjoyable –Entertaining –Reliable –Appropriate –Not objectionable Purchase Consider purchase Pay bill on time Attributes that increase business results when sending to PERSONAL RECEIVERS

17. Purchase Intentions of Receivers and Senders by Channel – Personal Receivers -1.5 -0.5 0 0.5 1 Newspaper DM mediaMass Media Phone Email SMS Regression Coefficient ReceiversSenders

18. Channel Matrices – Personal Receivers *Channels highlighted in blue are paper-based channels Most EffectiveLess EffectiveLeast Effective Seek further information - Radio - Magazine Ad - Newspaper Ad - Catalogue / Brochure -Personally addressed letter - Television - Door-to-door - Generic addressed letter - Email - Telephone call at home - SMS Consider as a purchase option… - Newspaper - Radio - Magazine - Catalogue / Brochure -Personally addressed letter - Television - Generic addressed letter - Email - Door-to-door - Telephone call at home - SMS Purchase… - Radio - Newspaper - Magazine - Catalogue / Brochure -Personally addressed letter - Television - Generic addressed letter - Email - Door-to-door - Telephone call at home - SMS Pay bill by the due date… - Personally addressed letter- Email- SMS

19. Business Receivers Convenient Acceptable Appropriate Not disruptive Attributes that increase business results when sending to BUSINESS RECEIVERS Purchase Consider purchase Pay bill on time

20. Purchase Intentions of Receivers and Senders by Channel - Business Receivers -2 -1.5 -0.5 0 0.5 1 MagazinesNewspaper DM mediaMass Media Phone Email SMS Regression Coefficient ReceiversSenders

21. Channel Matrices – Business Receivers *Channels highlighted in blue are paper-based channels Most EffectiveLess EffectiveLeast Effective Seek further information… - Radio - Magazine - Personally addressed letter - Brochure - Television - Newspaper - Generic addressed letter - Door-to-doorl - Email - Telephone call at work - SMS Consider as a purchase option… - Brochure - Personally addressed letter - Radio - Television - Magazine - Newspaper -Door-to-door - Email - Telephone call at work - Generic addressed letter - SMS Purchase… - Radio - Personally addressed letter - Television - Magazine - Newspaper - Generic addressed letter - Door-to-door - Telephone call at work - Email - SMS Pay bill by the due date… - Personally addressed letter - Email - SMS

22. Major findings It cannot be assumed that a communication channel is more effective because it is used more. Age is no barrier - regardless of age, mass media, personally addressed letters, catalogues / brochures and generically addressed letters outperform email and SMS. Disruption or ‘cut through’ does not influence business outcomes in this study

23. Understanding the Effect of Disruption Case Study: A respondent explained that he had recently defected from a mobile service provider to an alternate supplier. As the end of his mobile phone contract neared, the mobile service provider sent him an SMS message to encourage contract renewal. Sometime later and without a reply, another SMS message was sent with a similar message. These messages continued intermittently as the contract neared its end. Despite being a satisfied customer of the provider, the respondent decided not to renew his contract because he had been “annoyed” by the SMS messages.

24. Senders beliefs of which channels are best for different communications Senders to ConsumersSenders to Business Promotional Comms Branding Comms Operational Comms – bills/invoices Promotional Comms Branding Comms Operational Comms – bills/invoices Mail 29 15 7535 17 69 Phone200401 Email1642017528 Web534321 TV20 41 014 34 0 Catalogue420330 SMS200000 Radio450230 Newspaper91807170 Magazine260580 Door-to-door410831 Other561371

25. Effectiveness of Paper Paper-based communication: is the preferred channel for transactional communications - far ahead of SMS and email. produces very positive outcomes for senders to both personal and business receivers, be they marketing or transactional communications. Payment of a bill on time more likely Product / service purchase more likely Personally / generically addressed letters outperformed email for all business outcomes

26. Summary of Outcomes SMS / email Lags behind paper via mail on delivering business outcomes Email unable to match paper’s reliability, trustworthiness, tangibility SMS rated unfavourable against paper on all dimensions Produces lower purchase intentions Mass Media Performs very well against SMS, email, telephone Generally equivalent to paper-based media Paper-based via mail Performs very well against SMS, email, telephone Receiver is “in control” Paper is tangible, trustworthy, reliable Delivers superior business results compared with digital channels

27. Questions