Torin Douglas: Can direct mail see out the Internet challenge?

The growth in the Internet and e-mail have challenged direct mail’s unique ability to target. Nonetheless, the Royal Mail remains confident.

A captain of industry handed me a card lined with pink fur the other day. He’d got it through the post and was (not to put too fine a point on it) tickled pink.

You may have had the same mailing. It was promoting the Financial Times’ new Creative Business section, and was brilliantly simple, effective and impossible to ignore – even if it did end up in your bin. The copy line said it all: “Please remove… your preconceptions.”

Its impact was only slightly dented by the arrival of a piece of scarlet fur a few days later from a creative placement firm, which came with the far less witty copy line “Are your design and production projects getting a little hairy”?

The FT mailing could have been designed to complement the Royal Mail’s current One Letterbox campaign, which capitalises on the escalating problem of media fragmentation. The campaign has several versions, but the fullest says: “292 UK radio stations; 283 TV channels; 5,369 business magazine titles; 3,026 consumer magazine titles; 13 national daily newspapers; 12 national Sunday newspapers; 1,543 regional newspapers; 2,790 cinema screens; 30,000 new books published every year; 2 million websites… Only one letterbox.”

It’s a powerful message – but it needs to be, for direct mail faces a huge challenge in the digital age. Having helped establish precision targeting and relationship marketing as key weapons in the marketing director’s armoury, it now finds there is a faster, far more immediate way for companies to communicate directly with their customers – the Internet.

Aside from newspaper classified advertising, it is hard to find a marketing business sector under greater threat from e-commerce than direct mail – the Royal Mail openly acknowledges this in its report Media Fragmentation, published this week.

For the report, Euromonitor questioned the heads of sales or marketing in 100 companies – including Barclays, British Airways, Cadbury-Schweppes, Fujitsu, Philips, Samsung, Telewest and Whitbread – about how they were coping with media fragmentation and how it would change their marketing strategies.

“The greatest threat to direct mail is the e-mail shot,” said one respondent in the telecoms and electronics sector. “We use it sparingly because of the invasion of privacy issue, but it has become a very powerful tool.”

“Direct mail will become less attractive as more people access the Internet,” said a head of marketing in the financial services sector. “Using e-media will be a lot cheaper than stuffing things into envelopes.”

Euromonitor concludes: “E-mail tech nology is becoming far more sophisticated and there is also the facility to insert hyperlinks into e-mails which can direct consumers to more detailed information on a website. This is something direct mail cannot do and, in an age of convenience with cash-rich and time-poor consumers, could be considered to be an important advantage.”

As a consumer who regards himself as time-poor, but not especially cash-rich, I’m not sure I find this prospect encouraging. Though I have “only one letterbox”, I still get a great many letters, many of which end up straight in the bin. And though I open most of them, many waste my time. I now get dozens of e-mails a week too, and this will only increase.

But how does the Royal Mail feel about the Internet? Does it foresee its &£2bn a year direct mail revenue being severely damaged by e-media? Of course not, or it would have sat on the report’s findings. But it doesn’t dismiss the online threat. How could it? It has pop-up ads on MediaGuardian.co.uk, and a website that rams home the One Letterbox message.

Rather, it sees the arrival of e-commerce as a challenge to which it must adapt, but also one that offers great opportunities. “The research shows that companies want media to be more accountable and to build one-to-one contact with customers,” says Royal Mail distance selling director Derek Fairhurst. “That’s good news for direct mail. The new media techniques are those which have been developed by direct mail. We think the two will complement each other very well.”

Fairhurst points to the Advertising Association spending forecast, which suggests direct mail’s share of the market will rise from 12 to 13 per cent in the next five years. “Far from taking a hit, direct marketing is growing because people have been subconsciously learning direct mail techniques” he says.

Ironically, it may be growing because so many e-commerce companies use mailshots to kickstart their business, as the postal bombardment from Internet banks illustrates.

Fairhurst also takes comfort from the US experience, where direct mail has weathered the storm well. There are growing consumer concerns about the Internet such as “spamming”, (the sending of unsolicited e-mails); privacy issues and fear of viruses, which leads many not to open unsolicited e-mails. In the UK, there are two additional problems: most people still don’t spend very long on the Internet because of cost; and household penetration remains comparatively low.

Above all, you still can’t send pieces of pink fur by e-mail – or not yet, anyway.

Torin Douglas is media correspondent for BBC News

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