Which direct response media generate the highest ROI? It turns out that sending letter-sized envelopes to prospect lists is a valuable tool, according to the latest Response Rate Report from the Association of National Advertisers (ANA) and Demand Metric.
Before looking at the analysis, it’s worth noting that, per ANA, some media types had a low number of respondents. Rather than omit them, disclaimers are added in these cases (and noted within this text). Moreover, with some skew apparent (as well as outliers) such that the data was in many cases not normally distributed, the study most commonly uses a median average rather than a mean average.
Some 8 in 10 (82%) of the 265 respondents who responded to the question report using email in their direct marketing campaigns. Email has been the top media type used by marketers for some time, with the share who use it dipping only slightly since 2018. B2B marketers (88%) are more likely than B2C (72%) or B2B/B2C (81%) marketers to use email.
On the other hand, B2C (75%) and B2B/B2C (84%) are much more likely than B2B (67%) respondents to use social media advertising. On the whole, about three-quarters (74%) of respondents use social advertising. By comparison, amid a 5% year-over-year lift in direct mail volume in 2021, fewer than 4 in 10 (38%) respondents say they use direct mail for direct marketing campaigns. Furthermore, fewer than 1 in 5 (18%) say they are using SMS. (These smaller numbers may be contributing to their high median average campaign ROI figures as seen below.)
In the next 12 months, almost all media are set to see increased use, with about half of marketers saying they will increase their use of email (53%), paid search (52%), social ads (50%), SMS (50%) and direct mail (46%). Some 4 in 10 (39%) intend to increase their use of display, with the majority (51%) saying their use of display will stay the same.
Average Campaign ROI
With usage numbers in mind, ANA’s analysis indicates that those respondents who used direct mail — specifically letter-sized envelopes sent to prospect lists — saw an average ROI of 112% for these campaigns. Likewise, SMS, which is used by the smallest percentage of respondents, has an average ROI of 102%.
Respondents using more popular media types such as email (to prospect lists), paid search (generic keywords) and social media advertising report average ROI of 93%, 88% and 81%, respectively.
The following provides some quick highlights from select direct media covered in the report.
Social Media Ads
For the most part, marketers are using social media advertisements for brand awareness, with 44% of B2B, 48% of B2C and 44% of B2B/B2C respondents (N=110) saying this is their primary purpose of social ads. Indeed, on a whole, 45% of those who use social ads use it for this purpose, compared to 24% who use it to generate leads.
As a large portion of digital minutes are spent on mobile and social media apps are considered some of the most necessary, marketers are also seeing good results for social media ads on mobile. A majority of respondents report that CTR, CPC and conversion rates are the same or higher than on mobile than on desktop.
More than half (54%) of respondents (N=87) say their primary purpose of paid search is to generate leads, with a majority (63%) using a combination of both brand keywords and generic keywords in their paid search campaigns. Although only a small percentage of respondents shared response rate averages, those who did are seeing a higher ROI from generic keywords (88%) than from branded keywords (78.2%).
About three-quarters of respondents report that CTR (76%) and conversion rates (75%) on mobile is about the same or higher than on desktop.
Some 6 in 10 (59% of) respondents (N=148) use online tracking to track direct mail response rates. This is by far the most used tracking method, with fewer than half as many using codes or coupons (29%), call center or telephone (25%) and matchback (25%).
Once again, very few marketers shared response rate averages. Those that did report that letter-sized envelopes sent from a prospect list had a higher ROI than that of oversized envelopes (92.2%), dimensional (92.3%) and postcards (85%) sent from a prospect list.
The full report can be found here.
About the Data: Findings are based on an online survey fielded between February and July 2021 and included a total of 581 marketing industry respondents (149 complete and 431 partials). Some 42% of respondents reported most frequently running B2B campaigns, while 31% reported most frequently running B2C campaigns, with the remaining 27% split between B2B and B2C.