February 23, 2023
By David Foy, CEO Junction59
The future of direct marketing is an exciting and rapidly changing space. It is a field that is constantly evolving as technology advances, consumer habits change, and new strategies are developed. With that in mind, I want to explore the current trends and opportunities in direct marketing, discuss the challenges that direct marketers may face in the future, and provide strategies for staying ahead of the curve.
Let’s begin by defining what we call direct marketing and go on a little journey of how we got to where we are today.
Simply put, direct marketing is any activity that, as its name suggests, communicates directly with a potential consumer with the purpose of encouraging them to act in a way that can be tracked, recorded, analyzed, and stored in a database for further use.
How does direct marketing present itself in today’s world?
When we look at today’s digital creative work, we see many of the same creative approaches used in direct mail, such as the all-important call-to-action, a strong offer, and the use of storytelling. Direct marketers have always been great storytellers with a gift for creating compelling work that supports the brand. Nowadays, our direct and digital marketing worlds are morphing into one. Where we really see this overlap is how digital marketers have begun to measure results using the same methods traditional direct response tracking have been for decades.
The principles and practices of direct marketing have been put on steroids thanks to the power of the Internet but, the question is, “what is the future of direct marketing”?
What I see now is that direct marketing has simply become marketing. To put it another way, no one’s interested in direct marketing, but they’re very interested in marketing. And, as a result, that’s what we really should focus on: developing today’s modern direct marketing so that it becomes more mainstream.
Let me give you one example of something we’re seeing. When we write, we must think about audiences. We now have three audiences that we write for and when we’re writing a piece of direct mail, email or whatever the medium is, these three audiences are very important to us.
We have consumers/prospects that we put in one bucket. We have influencers in another. And in a third bucket, we have algorithms that we’re writing for. Even direct mail copy is getting searched and recorded somewhere. So, when we write today, we must think about how we write for this market.
Smart marketers know the days of mass mailing a single offer to as large an audience as possible (with fingers crossed) are, literally, history. Evolutions in technology—wireless, and data—have given way to omnichannel marketing that continuously pushes the future of direct mail in new and exciting directions.
Does direct mail still matter?
In reaction to the onset of the global pandemic, marketers went “all in” on digital advertising. In the moment it made perfect sense, what with millions and millions of consumers engaging with their electronic devices at unprecedented rates. However, studies have shown that there is “digital fatigue” at play.*
The good news for marketers is direct mail’s proven ability to drive consumer engagement could be the antidote for this growing challenge. According to a study by SG360 (The future of direct mail: an opportunity for a unified marketing strategy, 2021), 72% of consumer respondents said they “feel positive about receiving direct mail.” The number one reason for these positive feelings? The great deal/offer the mailing provides. In other words, it’s relevant to their needs. On the flipside, the number one reason for “dislike of direct mail” among the remaining consumers? “I don’t find mail useful.”
It’s almost fruitless to discuss the future of direct mail without examining how generations are affected by it. One of the most intriguing revelations to come out of the report highlights the growth in engagement between younger generations and direct mail. It seems the generation born into the digital age, for whom pixels are as easy to navigate as breathing, value the physical world. As a result, they value touching and holding paper, leading to positive feelings about direct mail –– so long as what they are seeing, and feeling, is personally relevant to their wants and needs. Gen Z, Millennials, and Gen X also rank higher than Baby Boomers in actions taken as a result of receiving direct mail, including:
The importance of machine learning and modeling
As I mentioned previously, the future of marketing and direct marketing are intertwined. Today’s data scientists are developing new kinds of modeling. I’ve been reading more about ensemble models, meaning models that are now built out of two, three or more types of models in order to produce one optimal predictive model. This is exciting as it will not only calculate more accurate values but also response rates. In no time, machine learning is going to be mainstream in our business.
We are already seeing the start of Artificial Intelligence (AI) being tested in today’s marketing. Tomorrow, AI is set to revolutionize the way direct marketers interact with customers. AI can help marketers better understand and target their audiences, allowing them to deliver relevant, personalized messages in real-time. AI can also be used to automate the process of creating campaigns, saving time and money. For example, AI-powered marketing automation to quickly deploy campaigns in multiple channels, or AI-enhanced chatbots to engage customers in real-time and help them find the products and services they need. Plus, there will be AI-driven predictive analytics to forecast customer behavior and optimize campaigns which will ultimately lead to AI-driven optimization of ad campaigns to maximize conversion rates.
What will the end of cookies mean for direct marketers?
The elimination of 3rd-party cookie data will also have an impact on online direct marketing in the future. Companies will need to be more creative with their marketing strategies and find other ways to obtain data about their customers. They will need to focus on building relationships with their customers and developing personalized experiences for them, as opposed to relying on 3rd-party data. To achieve this, companies may need to invest in data analytics and AI technologies to better understand their customers’ needs and preferences.
Summary We’ve all known this for some time now, but it bears repeating: the future is digital. In 10 years, direct marketing will look very different from what it is today. Technological advances and changing consumer behaviors will likely drive a shift toward more personalized, data-driven campaigns. Companies will likely use AI and machine learning to better understand their target audiences and deliver more tailored messaging that resonates with them. Additionally, direct marketing campaigns will likely become more interactive, with the use of virtual and augmented reality to create immersive experiences. Finally, with the growth of online shopping, direct marketers will likely focus more on digital channels, such as social media and email marketing, rather than traditional mail.