Most marketers are now focusing their tactics on digital channels. Mobile, social media and paid search are increasing in prominence, and that means strategies are shifting online as well.
Digital has taken the lead in large part because of both its low cost and its perceived immediate and wide-reaching impact. However, the latest Direct Marketing Association Response Rate Report has shed new light on ROI and CPA benchmarks, and what’s become clear is that cost-per-acquisition shouldn’t be the sole metric that defines where your spending goes (DMA). A good marketing mix is just that, a mix of approaches that encompasses the entire audience you’re trying to reach.
For instance, email was found to deliver the highest ROI, coming in at 21-23% compared to social media advertising at 15-17%, which puts it on par with direct mail. The CPA for email is the lowest at $11-15, with social media coming in at $16-18, and direct mail at $19. Using prospect lists increases the cost to $71 (Marketing Charts). Yet, if these are the only numbers you’re looking at, you’re almost certainly not engaging with all of your potential audience, primarily because these numbers don’t factor in response rates..
Direct mail still has one of the best response rates, 3.7% (using a house list, 1.0% for a prospect list), compared to 0.1% for both social media advertising and email — an almost 600% difference (IWCO Connect). With the rise of ad blockers, the idea of unlimited digital reach is at an end, and email lists may not include the entirety of a particular market (AdWeek). Direct mail has other advantages. A recent ethnographic study on the visibility of physical mail done by Canada Post has shown that direct mail is much more likely to be noticed, inspire, persist, and persuade (Canada Post).
Don’t leave any money on the table. Digital marketing should remain an important part of your marketing mix, but you may only be capturing half your market if you rely on it solely. Combining your efforts under a multi-channel marketing mix provides access to the full market. Using this approach allows companies to more fully realize the potential of these markets as well as establish more credibility as a brand with their audience.