New Media/Web 2.0, E-Mail Gaining Response Results (and Budgets): DMA Report

By Brendan B. Read

March 11, 2009, TMCNet.com — Pilots with new media/Web 2.0: including SMS, social networking, podcasts, blogs, RSS feeds, wikis, online video, user-generated content, and virtual worlds have shown more positive than negative results according to a new report from the Direct Marketing Association, the 2009 Response Rate Report.

Perhaps not surprisingly the study reveals growing interest by direct marketers in this channel. Over 32 percent of the report’s respondents are considering running pilot projects in social networking while nearly 26 percent are examining them for blogs, followed by 25 percent for user-generated content.

Results have backed up these plans. Just over 12 percent of marketers have run successful pilots with social networking compared with slightly more than 3 percent that were unhappy with the results. Similar positive spreads occurred for blogs: nearly 12 percent versus almost 5 percent and for user-generated content: approximately 10 percent compared with approaching 3 percent.

There are strong variations in the direct marketing verticals on new media interest and piloting. Education marketers are particularly strong adopters of podcasts, RSS Feeds, and online videos. For example, over 60 percent are either using podcasts or considering using these within the next 12 months. At the same time significantly more financial services marketers than average are skeptical about using new media and have concluded that the channel is simply not appropriate for their markets.

Of all the channels outbound telemarketing had the highest average response rate (4.41 percent for house lists and 2.92 percent for prospect lists), followed closely by catalogs (3.95 percent house lists and 1.85 percent prospect lists) and direct mail (3.65 percent house lists and 1.65 percent prospect lists).

Yet telemarketing’s relative effectiveness in generating response outcome comes as no surprise, said the report. As the highest-cost media, this channel needs high response to justify its high expenses.

E-mail, despite the bad press on spam, seems to be shining through. Statistics for this channel are stabilizing, with open rates in the low to mid teens for house lists, click-through rates in the high single-digits, and conversion rates in the mid single-digits.

Thanks to such numbers e-mail is now 12.6 percent of marketers’ budgets, third only to direct mail and Internet marketing. 57.1 percent of respondents expect increasing their e-mail budgets, while just 8 percent plan to decrease them. The low cost per touch is email’s continued advantage, says the report, when compared to traditional channels.

While 35 percent of direct marketing budgets remain allocated to direct mail, the largest single portion, the reports says the trend is away from print media and towards digital media like e-mail but also including mobile marketing, Internet marketing, and paid search. Fewer respondents expect to increase direct mail spending (27.2 percent) than decrease it (33 percent).

DMA initially created this report to best answer the question: “What is the typical response rate for a direct marketing campaign in my profession, and what channels will yield the best response?” Revamped to reflect today’s rapidly changing landscape, the 2009 Response Rate Report lets marketers compare their own performance with a plethora of data including success metrics for six media: direct mail, catalog, inserts, telephone, e-mail, and for the first time ever paid search. These are broken down for direct order and lead generation campaign objectives; thirteen different segments; and three market types:B ( News - Alert)-to-C, B-to-B, and both.

“This new report includes important information for the success of today’s multichannel marketer including SMS, mobile, and search,” says Michelle Tiletnick, DMA research manager. “Paying special attention to the fact that e-mail has such an impressive ROI, we have further broken it out by open rates, click-through rates, conversion rates, and bounce-back rates. This report is a must-have reference for companies looking to be responsible with their marketing budgets, as it provides a dependable and robust response rate benchmark for a wide range of professions and campaign types.”