We are in the midst of a fundamental change in how we find out about and buy products. Mobile advertising now accounts for over one-third of all advertising spend and mobile ecommerce is over half of all ecommerce. That is unbelievable. A channel that did not exist 10 years ago is taking over. What we think of as traditional marketing has, in the last couple of years, transformed out of all recognition.
These changes are driven by smartphone access and a new and very different level of insight into the individual consumer made possible by cloud based analytics. How companies position products and reach customers has evolved from a mass-market approach measured by the number of eyeballs, to a personalized, one-to-one communication tailored for each individual. Millennials, some say, will be the last generation who are “marketed” to. It’s a fundamental shift. Because companies can now reach individuals, they know precisely what to say thanks to analytics, and they have the mechanism to deliver such personalized content to every individual thanks to the smartphone.
That shift is creating a major redirection in advertising spend. In fact, the only category that is growing is mobile/digital. Everything else is flat or shrinking. That creates a big challenge for traditional direct mail – which is neither personalized nor available on a smartphone.
One postal organization – USPS– has taken a radically different approach to addressing this challenge. And it’s reaping the rewards. Each morning I receive an email from USPS. That email contains a scanned image of every piece of post that’s going to be delivered to me that day. I nearly always open it. And I’m not alone. In fact, of the 9 million people making use of this service, more than 70 percent do the same. Every day. By anyone’s standards that’s an astonishingly high open rate. Marketers will tell you that rates of between two and five percent are more likely. What’s more, 90 percent of the service’s customers said that they were likely to continue using it and 80 percent indicated that they were either satisfied or very satisfied with what the service provides.
What we’re seeing here is a product that USPS has developed that creates a digital channel as a complement to its regular business – i.e. delivering physical mail. It’s a way of changing the perception of a postal organization from largely physical and analogue to (at least partly) digital. What’s more, it can enable marketers to direct highly personal relevant offers to consumers, straight to their smartphone. And that achievement makes them relevant in the most important channel – mobile.
One of the key findings from the USPS solution is that the efficacy of direct mail that appears as scanned content in the emails it sends out every day is orders of magnitude higher (between two and ten times greater response rates) than if content were simply delivered in the regular mail. Having this digital channel available for direct mail increases the number of impressions. That, in turn, drives a higher conversion rate which in the end means advertisers using direct mail achieve a higher ROI.
This product is still new and developing – time will tell how successful it will be. What is clear is that USPS has the potential to enter the fastest growing advertising space while potentially driving a material impact on its core mail product. That opportunity and experimentation is the essence of the type of innovation that postal organizations need.
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