Many people narrowly define direct marketing as direct mail, email or DRTV. The truth of the matter is that direct marketing is, as Jessie Kernan, EVP applied data and...
For many advertisers, the Holiday season is the time of the year that will make or break sales for the entire year. Afterall, everyone is a Holiday Shopper. What are some of the trends of the past and the future that are impacting this season? How can direct mail impact shoppers not only during the holiday season, but year-round? In this episode of Two Gals and Some Data, join Lori and her special guest as they discuss their experiences from marketing throughout decades of Holiday seasons.
Lori: Hi, everyone, and welcome to our second installment of Two Gals and Some Data. And just to keep you all on your toes, today's special guest is not a gal at all, but industry veteran Doug Oldfield.
Doug has spent 20 years in direct marketing with nearly 15 years at Abacus Epsilon working with domestic and international brands on their marketing programs. So given that background, it will come as no surprise to our listeners that today we won't just talk about data. We'll talk about how data can be used to help you make more money.
Doug, thanks for joining me today.
Doug Oldfield: Hello, everyone.
Lori: Doug, you're a long time industry veteran. Can you start by sharing a little bit about how you've seen marketing and specifically changes in marketing really impact the holiday season?
Doug Oldfield: Sure. And I have been doing this for quite a while, Lori. Thanks for noticing.
While I have seen a lot of changes to the holiday season in the last 20 years or so, the one thing that has remained consistent is how vitally important the holiday season is to a marketer. Even a non-holiday marketer knows that without a successful holiday season, all their hard work throughout the rest of the year will be lost if holiday sales don't meet or exceed their plan.
Planning for the holiday seems to start earlier and earlier every single year. Whether you're talking about budgeting, ordering product or forecasting, every aspect of a marketer's business seems to start earlier each year when it comes to holiday.
I've also seen a substantially higher percentage of marketing budget being allocated each subsequent year to making the holiday plan. Most times this means marketers are having to move budget away from other parts of the year, which, depending on the seasonality of their business, can really be a hindrance to other shopping-heavy times of the year.
Lori: You know, I actually think that's a really good point that you make. And it's not just a hindrance to the other heavy shopping times of the year. When you cut back on your marketing in the non-peak seasons, you're also going to have an impact on your holiday season as well. Marketers need to be acquiring customers all year long. Think about if you can acquire a new customer in an off season, what could they spend with you during that peak season? So when you're shifting those dollars around, you're not just impacting the off season, you actually are impacting the holiday season as well.
Doug Oldfield: Sure, sure. Another recent development are what I call manufactured shopping holidays. And that really affects the holiday and the marketer's ability to spend as they need to for the holiday season season.
For instance, Singles Day last year, through Alibaba, produced $30 billion in sales. And Prime Day brought in over $4.2 billion. And in fact, Prime this year, in 2019, two days of Prime actually out-produced in sales Black Friday and Cyber Monday previously.
Doug Oldfield: So it's becoming a big, big deal. In fact, during the Prime Days this year, 58% of all Amazon shoppers are going to make a purchase on one of those two days. So with this much online traffic and activity, marketers are having to move budget to coincide with these so-called holidays, effectively taking dollars away from what can be spent during that all-important holiday season.
Lastly, the buying season itself has been dramatically, drastically shortened over the years. As consumers see they can order their holiday gifts later and later and still have that guaranteed delivery, shopping and actual spending had been pushed into early and even mid-December from what was traditionally mid to late November. The problem here is this gives the marketers less and less time to make that needed change to their strategy if they don't see the sales and the sales trends going the way they want them to.
Lori: Yeah, that's a great point. I know, speaking for myself, I do my shopping later and later and later. And I'm always amazed that things make it there on time.
You know, it's interesting when we see that the duration of the holiday purchasing season is shrinking, we are still continuing to see that sales for that season are increasing, so more sales happening in a condensed period of time.
So trivia question for you, Doug. Retail sales growth for 2019 is projected to increase another 4% this year to $3.8 trillion. How many years of consecutive growth will this make?
Doug Oldfield: Oh, that's a good question. You know what, I'm going to go back to the recession and when the recovery of the recession started, which I think was 2009, so I'm going to guess 10 years.
Lori: Yeah, you are absolutely right. One thing that I just also found interesting about that, you know, just continued growth year over year over year for the past 10 years, and holiday sales overall still representing more than a third of all annual sales. So just to the points you've made earlier, it is this all important time of year for advertisers.
How have you seen the role of data play a part in marketing during the holiday season and how have you seen that change over time?
Doug Oldfield: You know, well, data has always been important to the traditional marketers for the holiday season. I mean, those who mailed a catalog to their customers and prospects relied heavily on having the right data to make sure that their offer got into the right hands at the right time.
Now, with data being everywhere, all marketers need to find the right data partner to make sure their holiday season is a success. The old saying that everybody is a holiday shopper is still accurate, but in what channel do they buy? And what channel do they consume information? Or what device do I need to communicate with my prospects and customers? And what channel are they most influenced to make that purchase? There's just so many more options than there used to be when I first got into this business.
If we all agree that everybody is a holiday shopper, then we need to think about what data is most likely to affect the most purchasing decisions.
Lori: You know, I do agree with your point that everyone is a holiday shopper. I can remember when we were working with advertisers and when Q3/Q4 hit ... I mean, every single customer that we worked with was focused on their marketing plans in Q1 or Q2. We had mailers that were seasonal. But as soon as Q3 hit and people were planning, it seemed like every single customer virus was going to be in that season, really suggesting everyone is a holiday shopper regardless of category.
Doug Oldfield: Absolutely. I mean, in the past, marketers would order their data for holiday mailings in August, September, October. And while that hasn't changed much, technology has allowed us to collect, process and understand data in a much quicker manner. And what this leads us to is the issue of data relevancy. If you can understand a consumer's activity preferences and how those things change the closer we get to the actual holiday, frankly, the better job you can do at communicating the right message to the right person in the right channel, on the right device, at the right time, et cetera, et cetera. So as consumers put off making their holiday purchases until later and later in the holiday season, marketers are still procuring that data for those campaigns months in advance.
And the issue of data relevancy comes into play more and more every single year. I mean, how relevant is the data you received 60 days ago? Probably a lot less relevant than it was 10 to 20 years ago. And what I mean by that is that data 10 or 20 years ago, it didn't change all that much. And the data that we get today, there's so many more different data sources. And technology allows us to collect so much more data quicker that the relevancy can change a lot quicker. However, you can also say, how relevant is the data from 10 days ago? Same thing, right? The data is not as relevant as it was because we able to collect so much data so much quicker and process it so much quicker.
So another thing for marketers to consider as they obtain their marketing data months in advance of their campaign is the mobility rate. Current mobility rates are and have been consistently in the 1.5% per month range. That means that if you order data, say, in September, by the time the consumer sees your messages for holiday, it's possible that five, six, seven, eight percent of your entire audience has moved. And while the USPS and other organizations really do a great job of trying to keep as up-to-date as possible with that data, every single message that is delivered to the wrong person or the wrong household is a missed opportunity to a sale. So, by finding a way to get more relevant data that isn't going to age out, marketers can improve their results in their holiday marketing campaigns.
Lori: Such a good point, Doug. I started my career in direct mail when direct mail was the marketing program that was used to drive holiday sales. But as you mentioned, timing is so critical. And I think digital marketing programs have become so important in addressing the time crunch that marketers feel during that season, it's hard to beat that timeliness of digital advertising.
But I got a softball for you. How do you see direct mail with its historic longer lead times able to impact holiday in today's marketing environment?
Doug Oldfield: Well, earlier we talked about the relevancy of data and how vital that data is. So imagine if you could identify an anonymous website browser and then send them a customized direct mail piece within 24 to 48 hours of them being on your site. That'd be huge.
Doug Oldfield: Remember how amazing it was when digital retargeting first appeared on the scene? Today, a marketer wouldn't imagine not having a line item in their marketing budgets specifically for digital retargeting. Why? Because at some point, it worked well and well enough for a marketer to need it over and over and over again as a new sales channel.
Today, the same process can be done using the direct mail channel. Digital retargeting, just like any other channel, has started to decline in its efficiency. Consumers just don't pay attention like they used to. They become numb to the channel. And there are new technical technological advances that allow the consumers to even avoid having these messages in front of them, which ultimately hurts the performance of this channel.
However, web-powered direct mail is still new to most consumers. It's interesting and it's novel. It's delivering direct mail at the speed of digital. And consumers are responding to that personalized message that they're receiving their mailbox the next day after they were just online shopping.
Lori: I love how you talked about digital retargeting coming on to the scene and being that new sales channel that advertisers just could not do without. And when you talk about web-powered direct mail, I really think about that as the newest channel out there for marketing and quickly becoming a channel that advertisers cannot do without.
Doug Oldfield: Sure, yeah. I mean, attention spans have shrunk and really continue to do so. We've all seen that stat that says a goldfish has an eight-second attention span and the average consumer has a seven-second attention span. We are, and we have been for a long time, being bombarded every day with more and more and more marketing messages. By some accounts, consumers are seeing over 4,000 advertising messages a day. And at some point we just become numb to it.
However, direct mail, especially those pieces that are customized to what interests the consumer, delivered directly into their mailbox a day or two after they're doing their online shopping, can allow that consumer to take in those messages in their downtime. They can choose when they want to read their mail and when they want to receive that marketer's message, when a marketer has their full attention. This is how web-powered direct mail can cut through the clutter, get the consumer's attention and result in a sale for the marketer.
Lori: I actually love and hate the comparison that you made to the average consumer's attention span, but I totally get it. We joke about it, but our attention spans are really small. Being exposed to as many as 4,000 ads per day, many of which we only see for a few seconds, the recall rate for those types of ads are very low.
Direct mail has that staying power because you can hold on to it. You can stick it to the refrigerator. You can reference it later. It's not something that just blasts in front of you and then is just as quickly gone.
I recently read an article about the most important components of a direct marketing program. Any guesses what they are and what you think is the most important?
Doug Oldfield: I love that question. That's a great question. I'll tell you a little story. So very, very early on in my career, I had the opportunity to work for John Lambert, who was one of the founders/pioneers in the direct marketing world, when I worked for Acton International. And I remember one of the very first things he ever told me was if you've got the right data, you can have the right creative, you can have the right message, but if you've got the right data, the right audience, you will be successful. So my guess would be the right data.
Lori: Okay. I will tell you that it does align with what we hear marketers say about putting the right offer in the right hands of the right person at the right time. But the top six most important criteria for a successful direct marketing program are creative, offer, call to action, channel, timing, and then, no surprise, the number one was targeted list. And I think that's so important for us all to remember today, because it's getting harder and harder to find new targeted lists. There just doesn't seem to be enough prospects out there for us to be communicating with.
Doug Oldfield: No, you're right. You're exactly right. And I would say during my career, I've had the chance literally to work with thousands of marketers who use direct mail as one of their major sales channels. And one of the biggest complaints that I've always heard, and especially during the holiday season, was the duplication rate between all the different data sources a marketer would use.
On average, a marketer might be able to net out about a 60% of their data that they bought for a campaign. Leaves a lot of waste on the cutting-room floor and ultimately increases the effective list costs for all those rented lists, making it ultimately harder and harder for a marketer to see success from using all those data sources.
But by using web-powered direct mail to create your audiences, not only is the data more relevant and timely, but the duplication rate between this form of data and all other outside list sources is less than 10%. I mean, that's a huge win for marketers. Now, they don't have to spend a ton of their marketing budget paying for the same name over and over and over again.
Lori: You know, Doug, I cannot think of a better way to end the podcast with that point about the power of web-powered direct mail. So let me just thank you. I really can't thank you enough for being part of this episode of Two Gals and Some Data and for being our honorary gal joining me today.
If you want to read more from us, check out our blog at navistone.com/blog. And if you enjoy today's show, head over to iTunes and leave us a five-star review. Thanks for listening.