Mailing Systems Technology - November/December 2009 - (Page 26)

Cost Comparisons By Todd Butler Disc-based mail vs. online advertising — weighing your options T he problem with comparing direct mail costs (including disc-based mail) to online marketing is that a common lexicon for equivalent consumer actions and costs associated with those actions has not been established — until now. There are three primary forms of online advertising: banner ads, Search Engine Marketing (SEM) and email marketing. All three define a response as a “click. A click is registered when a consumer ” seeks more information about an ad by following a provided link. This online consumer activity is equivalent to a person that receives a direct mail piece and opens it, seeking more information. Both mediums are successful when they place an advertisement in front of a consumer and are able to generate a request for more information. A “click” can therefore be used to define this consumer action that is common to both direct mail and online advertising. Simply put, a “click” is opening an ad for more information. The mistake the direct mail industry has made is to allow those selling online ads to equate the traditional direct mail response, generally defined as a purchase, with an online response, defined as a click. The direct mail industry also allows online advertisers to equate direct mail’s production costs with online advertising’s cost per response pricing. These inaccurate comparisons make online advertising appear much more responsive and significantly less expensive than direct mail. With acquisition campaigns, a five percent click rate for email is “considered a very successful campaign. The accepted industry ” response rate (purchase or other significant activity) for direct mail is one percent to three percent. This one percent to three percent response rate is quoted regularly when comparing the superiority of online advertising to the response rate of direct mail. The direct mail response rate that should be used to accurately make comparisons between these two mediums is direct mail’s click rate, which is 82%. NOVEMBER-DECEMBER 2009 a

Table of Contents for the Digital Edition of Mailing Systems Technology - November/December 2009

Mailing Systems Technology - November/December 2009
Editor’s Note
Real-Life Management
Software Byte
Employing Technology
Everything IMB
Ship It
Best Practices
What You Think
From the Source
Mail Managers React to Economic Times
Cost Comparisons
The Intelligent Mail Challenge
Special Product Profile Section
Reality Check
Pushing the Envelope

Mailing Systems Technology - November/December 2009