Back in April of 2021, Apple announced they were restricting the ability to track IP addresses in Apple environments. Since that time, the industry has been waiting to see the impact these changes might have on investment in social media channels that rely heavily on this data to target and measure campaigns marketers run on their platforms.
This recent article from Lara O’Reilly at Insider offers some answers.
“Facebook said this fall that Apple’s privacy changes were causing it to undercount the effectiveness of some advertisers’ campaigns. Facebook also cited Apple’s tracking update as one of the reasons its ad revenue decreased slightly in the third quarter. Many companies have said the changes have made it costlier to acquire new customers using Facebook ads.”
The article references data shared by marketing attribution platform Rockerbox illustrating that, while Facebook still makes up the lion’s share of spend from D2C brands, this increase in cost has accelerated a trend that has seen marketers shifting budgets away from social towards areas like over-the-top TV, video, affiliate marketing and (you guessed it), Programmatic Direct Mail.
This increase in investment is something that we at PebblePost have seen first-hand. PebblePost CEO, Jacob Ross, was featured in the article citing the increased investment from D2C brands — which make up about half of our client base — by about 72% on average year-over-year.
But as for why exactly D2C brands are choosing to invest what is considered by many to be an “old-school” medium, there are several reasons it makes sense in modern times:
The technology powering direct mail advertising is better.
This is the “programmatic” part of “Programmatic Direct Mail.” Much like CTV has reinvented advertising on television, Programmatic Direct Mail has reinvented advertising with direct mail.
Brands can now leverage tactics they associate with digital – workflow automation, lookalike modeling, retargeting, frequency capping, performance-based optimization – making it more relevant, timely, performant and sustainable.
Innovative brands like Mejuri, with a sophisticated omnichannel approach, have leaned in on these capabilities to drive performance at every stage of the funnel.
It reaches people in the home.
With Programmatic Direct Mail, the targeting is household-based, not IP- based or cookie-based, which allows for greater precision at scale. With PebblePost’s platform, marketers can potentially to reach 97% of US households with a tangible piece of media
The home is where 88% of purchase decisions are made. With more people adopting hybrid work environments – a trend accelerated by the pandemic that will only continue to grow in the future – and no concerns regarding fraud, auction manipulation, or questionable content, “home” is increasingly the best place to reach a consumer at any stage of the customer journey.
The pricing is easier to forecast.
As we discussed earlier this year, USPS only changes rates (normally) once a year, and the changes are normally nominal and projected far in advance of implementation. This means there are no unpredictable fluctuations in cost due to oversaturation or seasonality, which makes Programmatic Direct Mail a much easier channel to forecast against, as opposed to some other digital channels that rely on auction dynamics.
Attribution is easier to track for both online and offline conversions.
This is something mention in the article, as well:
“Ad experts said direct mail is inherently trackable — it’s easy to trace if someone who received a catalog went on to buy an item. Plus, physical mailers tend to sit on the dining room table or fridge door for a relatively long period of time.”
This is a point that cannot be overstated. Very few businesses are purely online or offline these days, and even D2C companies inevitably need to have a physical presence in the real world as they mature. Direct mail bridges the gap between online and offline better than any other advertising medium.
As D2C marketers continue to shift budgets away from social, they will require several new channels that provide incremental reach and performance within truly unique mediums. And while no one channel will be able to replace Facebook, it is a safe bet that Programmatic Direct Mail will continue to be one of the core channels in which marketers will turn to scale investment.
Interested in getting started with your own Programmatic Direct Mail marketing program? Learn more here.