The Most Expensive Form of Advertising

The Most Expensive Form of Advertising

Direct mail is the most expensive form of advertising.  As we have seen in my article How Direct Mail Has Changed, when you add up the costs of postage, lists, paper, mailing house fees, art direction and copy, a mailing can be astronomical in cost. 

But in direct mail’s heyday, it was all considered worthwhile, if you had a control package that beat out all your tests packages and pulled in a decent return.  “Decent” could mean anything from 2% to about 10%.  A 2% return on an insurance promotion is considered excellent, but not so good for a magazine promotion.  Because insurance is expensive, pulling a 2% return on that kind of product could mean millions of dollars in profit.  In contrast, a magazine subscription costing only about $20 a year needs a much better return on investment (ROI) in order to make a profit.   

Targeted Mail Means Your Prospect Is Likely to See It

Unlike most other forms of advertising, direct mail is targeted by using carefully selected mailing lists.  These are the most important part of the direct mail process, as companies can select the demographics, geographic neighborhoods and income brackets they most want to reach. 

The mailing list business is a highly specialized field and can mean all the difference between success and failure.  On the other hand, print, radio, TV and email advertising is far less targeted, actually hit-or-miss. While that kind of advertising is less expensive, it is also less effective.  There may be some information about the subscribers to those media but they are not nearly as precise as the statistics about the demographics available from a reputable mailing list firm.    

Who Are the Customers?

A current trend is for list marketing to look beyond the usual demographics.  New data is being recorded, such as hobbies, past purchases and ethnicities.  This information will be included in new lists, and offers enormous marketing and profit potential in 2010 list marketing.

According to the Direct Marketing Association (DMA), 2009 was a tough year for many companies, which had to make do with much smaller budgets.  However, the DMA points out, “Sometimes reduced direct marketing budgets result in greater efficiencies.”   We’ll see if that holds true in 2010.