Direct Mail Usage Not At Risk From Web-Based Marketing, Survey Finds

Just 7 per cent of companies say they have directly replaced direct mail with Web-based marketing. Other media replaced include magazines (5 per cent), inserts, national press and trade press (4 per cent each), sales promotion and local press (2 per cent). Other media have only been affected among 2 per cent of advertisers.

These are among the findings from a major survey carried out by the Direct Mail Information Service among 100 top UK advertisers covering a wide range of sectors. The companies have an average advertising budget of £5.3 million and are committed direct mail users, spending an average of £517,000 per year on the medium. The survey looked into the marketing uses of company Web sites and the impact this is having on the marketing mix.

Direct mail will remain unaffected over the next two years, according to 61 per cent of companies. The next two years will see a definite rise in direct mail expenditure in 7 per cent of companies while 20 per cent will see a rise in the next three years.

A further one in six advertisers (16 per cent) say they will probably see an increase in direct mail activity both in the next two years and in the longer term. Very few companies expect to see a decrease - 11 per cent say it will probably go down in the next 3 years while just 3 per cent say it will definitely fall in the long term.

The overall impact on direct mail of Web-based marketing in the next two years is likely to be a small net rise. This will be the result of 21 per cent of companies using more mailings against 17 per cent using fewer. E-mail is also likely to reduce direct mail among 16 per cent of companies.

The reasons for this continued strength of direct mail in the marketing mix are both strategic and tactical. Three out of ten companies who expect to increase their use of direct mail say this is because they need to maintain an integrated strategy. One quarter (26 per cent) see a likely growth in direct mail in general, while 23 per cent say they need to maintain a mix of media.

Direct mail also offers advantages which Web-based marketing can not provide. The most important of these is personalisation, according to 48 per cent of companies, while 39 per cent recognise that mailings can be used to target consumers who are not on-line. The tangibility of a physical marketing communication is valued by 28 per cent, while 22 per cent appreciate the ability to read direct mail wherever the consumers wants.

The relative lack of impact by Web sites on direct mail activity seems to be the result of low levels of integration of digital activity into the marketing mix. Most Web sites have been developed for generic reasons, such as providing product and service information.

Asked for the primary purpose of their Web sites, only 3 per cent of advertisers said it was an additional marketing tool, although 40 per cent said this was a secondary purpose. Another 3 per cent said the Web was primarily an alternative route to market, while 30 per cent gave this as a secondary role. Cost is not a driver of media substitution either, even though e-mail has a substantially lower cost base than direct mail. Asked to give a score out of ten to the statement, "we use it because it is a cheap advertising medium," UK advertisers gave a mark of just 3.59.

So far, Web sites are not being heavily funded out of marketing budgets, meaning there is little conflict between existing marketing media and new channels. Just over six out of ten companies say they are putting less than 10 per cent of their marketing budget into the Web site, while 11 per cent assign between 11 and 20 per cent.

Where budget is coming from the marketing department, only 8 per cent say it has been drawn from below the line, 3 per cent from between the line and 1 per cent from through the line spend. Nearly half (47 per cent) say that Web site costs are met from the general advertising or marketing budget. This proves that on-line marketing is not being widely used as an alternative to existing methods, but rather as a support tool.

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