Commentary: The Perfect Match – Big Data and Direct Marketing
Using big data to enhance marketing performance is certainly not a new concept, but is often underutilized by both marketers and service providers. In many cases, the customer or marketer is working with a small staff and a limited budget, so robust data collection and analysis isn’t a major part of their efforts. Yet, ironically, data should be one of their most effective tools to reduce costs and increase response, resulting in more profitable marketing campaigns.
In today’s market, there are many new technologies and tools that give marketers the ability to dive deeper into a customer’s underlying behaviors, allowing them to better predict which messages, offers, and images will move interest to action. This is done through a combination of data analytics, applied demographics, and audience segmentation, which facilitates the creation of targeted messages, offers, and calls to action by the recipient.
Today, every digital platform, from Google to Pinterest, is tracking our activity and feeding it to an analytics engine, capturing data. This is data is then sliced and diced into information used to create a digital profile for each of us. This profile contains our interests, our shopping habits, who we are friends with, and where we go. The ability to access this data for marketing purposes is easier than ever. Once this data is acquired, you can create interest-rich marketing messages that drive higher response rates using techniques such as cookie pooling, IP targeting, retargeting, remarketing, and direct response retargeting.
Applying data to enhance a marketing campaign is just the first step. Direct mail remains one the most effective vehicles to drive response. The DMA says that household response rates for direct mail average 5.1% with a median household ROI of 29%. According to Canon Solutions America, personalization of a direct mail piece, which includes a name, color, and application of sophisticated data to improve message segmentation, can increase response rates by 500%.
More importantly, we need to recognize that print is no longer constrained by static content; instead, a piece of paper is now essentially a blank digital canvas. The response rates should only go higher with increasingly more sophisticated personalization techniques such as Augmented Reality (AR) or a personalized URL (pURL). Suddenly, a piece of mail can become the gateway to a digital experience.
Using direct mail as a foundation, savvy marketers can combine multiple channels to capture and convert a potential prospect. While utilizing multiple touch points can further enhance a marketing campaign’s effectiveness and broaden the customer’s experience, it’s important to remember that the average American is exposed to between 4,000-10,000 ads a day (Forbes, 8.25.17, "Finding Brand Success in the Digital World"). This is due to the wide variety of channels available to direct marketers today, such as digital display advertising, email, text (SMS), social media marketing (SMM), and search engine marketing (SEM), to name a few.
This brings us back to the use of well-developed data to ensure the accuracy of the target and the relevance of the message. Merkle reports that combining direct mail with at least one other digital media will result in an increased response of 118% versus direct mail by itself. Direct mail supported by digital display ads, for example, can see response rate improvements ranging from 25-65%. The bottom line is the more ways you deliver your message, and the closer to 1:1 that message is, the higher the response rates will go.
Remember they call it big data for a reason ... it’s the complex process of examining large and varied data sets to uncover hidden patterns, unknown correlations, market trends, and customer preferences to drive better marketing decisions. Understanding and leveraging this information to enhance your marketing communications is the key to improving results.
“The goal is to turn data into information, and information into insight.”
— Carly Fiorina, former executive, president, and chair of Hewlett-Packard Co.
Dave Johannes is the Executive Vice President, Strategic Initiatives, at Moore DM Group, Tulsa, Okla. Johannes is a veteran of the industry with a passion for digital technology. He is also a recipient of the Graphic Communications Association Innovator Award. Johannes' personal business philosophy is: "Success depends on a shared understanding of both the opportunity and the risk for all parties, followed by collaboration to achieve the shared goals."