telco sector deck (private life of mail)

MAIL’S EVOLVING ROLE

IN TODAY’S

TELECOMS MARKETPLACE

Date

Audience

WHAT WE WOULD LIKE TO TALK ABOUT TODAY

The Telecoms sector and the role for direct mail

The new news about mail

Why use mail now

Our products and services

2

TELECOMS

AND THE ROLE OF DIRECT MARKETING

3

THE TELECOMS MARKET IS PREDICTED TO CONTINUE

GROWING IN VOLUME TERMS BUT IS STARTING TO

SEE FLATTENING OF REVENUE GROWTH

(m)

7.9

Best case (m)

20.5

Worst case (m)12.2

Mintel forecast (m)16.3

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Mark

et

vo

lum

e (

m)

95%

Confidence intervals

90%

70%

50%

Actual Forecast

Est.

0

Total operator-reported telecoms revenues

fell by £0.6bn (1.7%) to £38.6bn during

2013

Mainly as a result of declining retail mobile

revenues (down £0.3bn) and fixed voice

revenues (down £0.1bn)

These falls were partially offset by a £0.3bn

increase in revenues from fixed internet

services during the year

Growth opportunity will continue in

bundling fixed telephony and broadband

with TV and mobile

Source: Ofgem Technology Tracker, Ofgem, August 2014 4

0%

20%

40%

60%

80%

100%

Total Male Female 16-24 25-34 35-54 55+ AB C1 C2 DE

BT Sky Virgin Media

Talk Talk/Carphone Warehouse Orange Plusnet

THE MARKET IS DOMINATED BY THREE MAIN

PLAYERS BUT NEWER ENTRANTS ARE STARTING

TO HAVE AN IMPACT

Question - Which supplier do you use for bundled services?

Source: Ofcom Technology Tracking Survey, nVision, 2014

Base: 2,253 respondents with a bundle service, who receive any of these services as part of an overall deal or package aged 16+, UK

BT, Sky and Virgin Media control 80% of the

total telecommunications bundle market place

However the market place has become much

more competitive with many new entrants in

the last few year like the PO, Tesco and

Plusnet

TalkTalk has captured a good market share in

the last 2 years and is catching-up on the big 3

BT has a strong uptake in older affluent

audiences with Sky more appealing to the

younger more mass market

5

THE BUNDLED MARKET CONTINUES TO GROW

WITH OVER 63% OF HOUSEHOLDS HAVING AT

LEAST TWO SERVICES FROM THE SAME PROVIDER

Just over 63% of households bought at least two of

their communications services together in a bundle

in Q1 2014, a slight increase on the previous year’s

figure (60%)

A dual-play package of landline and broadband was

the most popular, taken by 28% of households,

followed by a triple-play package of landline,

broadband and TV, taken by 23% of households

Take-up of bundles varied by socio-economic group,

with 78% of those in AB households having at least

one bundle (up from 70% in Q1 2013), compared to

48% of those in DE households

28% of adults state bundles as being the most

important consideration when choosing a supplier


WE ARE NOW LIVING IN MULTI DEVICE HOUSEHOLDS

WHICH OPENS UP NEW OPPORTUNITIES FOR

TELECOMS SECTOR

Take-up of communications/AV devices: 2003-2014

Source: Ofcom Residential Postal Tracker Q2 2013-Q1 2014, Ofcom, 2014

With the digital switchover now complete, most households

now have digital TV and 34% of households now have high

speed fibre optic broadband

Multi-screening within households is having a big impact on

usage with over a quarter of adults (27%) now having

access to four screens at home. We are seeing the biggest

increase in smartphone and tablet devices – both of which

require internet connections.

Nearly six in ten (57%) said they personally used their

mobile phone to access the internet

Almost all UK adults who have mobile phone internet

access also have access via fixed broadband

There is an opportunity for highly targeted communications

to specific users and multi-screen households to cross and

upsell multi household licences and go anywhere services

7

BUNDLES ARE IMPORTANT TO PEOPLE’S

LIVES, CUSTOMERS ARE LOYAL TO A PROVIDER

WITH ONLY 14% SWITCHING LAST YEAR

Less than £10 a month

5%

£11-20 a month 19%

£21-30 a month 24%

£31-40 a month

16%

£41-50 a month 12%

More than £51 a month

16%

I don’t know

8%

Most households pay over £20 a month for

their telecommunications bundle. With a

growing proportion now spending over £40 a

month.

Most households now see having

broadband and TV packages as a necessity

and could not live without a broadband

connection

Even though there are many offers and

incentives in the market place, only 14% of

households switched supplier last year

Clearly an opportunity exists to build and

reward loyalty with existing customers

How much do you pay for your bundle

service/package each month?

Source: GMI / Mintel, Bundles

Communications Services, January

2014

8

% of people who have switched landline

0% 2% 4% 6% 8% 10% 12%

Overall

16-24

25-44

45-64

65-74

75+

AB

C1

C2

DE

Source: Ofcom Switching Tracker, Ofcom, 14th July to 16th August 2014

MOST HOUSEHOLDS ARE LOOKING FOR

INCREASED FLEXIBILITY FROM PROVIDERS

People are increasingly looking for more flexibility from providers – so they can change packages to reflect their

consumption changes e.g. switching services on and off

People are becoming more confused with what bundles mean and are looking for simplicity and clarity

There is a feeling that no one provider really stands out from the others

There is an opportunity with a medium like mail to tell more of a story and explain products and services in

more simple terms


MOST HOUSEHOLDS ARE LOOKING FOR

INCREASED FLEXIBILITY FROM PROVIDERS

Attitudes to Bundled Communications, November 2013

37

29

29

26

26

16

13

12

12

11

7

14

0 5 10 15 20 25 30 35 40

I dislike paying for line rental when I hardly use my landline phone^

I do not think that any one provider has a standout offering

I do not have a bundle package as I like to get the best prices from differentsuppliers^^

I would only be interested in having superfast/fibre internet instead of having thetraditional broadband

I would be interested in a bundle that allowed me to ‘switch off’ individual services month to month

I would be interested in a landline service which allows me to use any includedminutes to make free calls from other devices (eg PC, smartphone)

I would be unlikely to purchase/repurchase a TV subscription as part of a futurebundle, since there is so much content available online (eg iPlayer, Netflix)

It is worth paying more for a bundle that allows viewing TV channels on any device atany time

I would be interested in a landline phone that came with similar features to asmartphone (eg apps, the ability to browse the internet)

When choosing an internet package, the amount of data included is more importantto me than speed or price

I picked my bundle specifically because I was attracted to the mobile offeravailable^^^

None of these

%


ADULTS WHO RATE THE IMPORTANCE OF BEING

OFFERED A TELECOMS BUNDLE, RESPOND TO MAIL

Source: TGI, Kantar Media, October 2012 to September 2013

Of 62% of adults who rate the importance of having their telecoms bundled have done something in the last

12 months as a result of the direct mail they’ve received...

Of 72% of adults who rate the importance of bundling as key when deciding which carrier to use always

look out for special offer and…

17% more likely to be heavy mail responders

29% kept it for later use

11% paid more attention to an ad

23% visited a store

15% passed it on

14% tried a new product or service

44% bought or ordered something

14% made an enquiry or asked for more

information

38% used a coupon

11

DIRECT MAIL MAKES UP 13% OF ALL TELECOMS

ADVERTISING SPEND

Telecoms share by media - 1 November 2013 to 31 October 2014 (%)

The top telecoms bundles suppliers sent 182m

direct mail pieces in 2013-14

Virgin Media are the biggest users of mail sending

33.5% of the mail sent in the sector

TalkTalk sends 30% of the door drops in the sector

and Sky use door drops more heavily than mail

Mail volumes by provider - 01 November 2013 to 31 October

2014 (%) Door Drop volumes by provider - 1 November 2013 to 31 October 2014 (%)

Source: Nielsen Ad Dynamix, November 2013 to October 2014

Cinema, 3 Direct Mail, 13

Door Drops, 3

Internet, 4

Outdoor, 13

Press, 25 Radio, 4

TV, 35

Virgin Media, 33.5

BT Ltd, 29.8

TalkTalkGroup, 17.6

British Sky Broadcasting

, 16.3

EE Everything

Everywhere , 1.4

TalkTalkGroup, 30.35

Virgin Media, 29.34

British Sky Broadcasting

Ltd, 18.66

BT Ltd, 18.52

Hutchison 3G Uk

Ltd, 1.65

Vodafone Ltd, 1.15

12

DIRECT CHANNELS HAVE DIFFERENT SEASONAL

PATTERNS AND ARE USED IN DIFFERENT WAYS

Door Drop Volumes – Telecom Sector (Nov 13 to Oct 14)

% of door drops sent in the past year by month

Direct Mail Volumes – Telecom Sector (Nov 13 to Oct 14)

% of DM sent in the past year by month

BY THE MAIN PROVIDERS

Source: Nielsen Ad Dynamix, November 2013 to October 2014

9.8

5.4

9.9

8.3

5.4

8.06.9

9.1 8.7

7.5

10.510.6

4.05.06.07.08.09.0

10.011.0

9.6

5.5

8.69.4

7.0

9.0

7.57.0

9.49.8

8.18.9

5.0

6.0

7.0

8.0

9.0

10.0

11.0

Direct Mail has a much more seasonal pattern

than door drop

Direct Mail peaks in the pre and post Christmas

period when offers and incentives to switch are

most prevalent

Door drop is used as more of a constant,

always on presence for brands especially

TalkTalk, Virgin and Sky

Virgin Media direct marketing and CRM

Director, Chris Bibby says door drops allow

them to target prospective customers in the

specific areas in which they are rolling out

broadband services. He adds: “Door drops can

be an efficient way to communicate with

consumers and a good cost per response rate

is attractive.”

13

NEW TECHNOLOGICAL TRENDS

IN THE SECTOR

14

SOME TECHNOLOGIES LIKE DIGITAL TV ARE AGE

NEUTRAL BUT MANY DIFFER BY AGE

Source: Ofcom Media Tracker, Ofcom, November 2014

The 35-44 age group exhibits very high take-up of

the newer digital devices; they have the highest

take-up of tablets (55%), smart TVs (17%) and

computers (89%), which may reflect both

confidence and available income.

Younger audiences are most likely to use

smartphones and MP3 players

Take-up of most of the services and devices drops

significantly for the 65+ age group; 19% report

using a smartphone and only about half have a

computer or broadband in their household (52%

and 49% respectively).

In fact, latest OFGEM research shows that a

person’s digital confidence peaks at the age of

14-15. With the lowest being in the 75+ age group.

This opens up opportunities for targeted lifestage

marketing offering different products and bundles

15

IN RECENT YEARS THERE HAS BEEN RAPID GROWTH

OF VOD AND GO ANYWHERE SERVICES

Investment in rights & commissioning means a

greater amount of content (both free and paid-for)

is now available to stream or download

BBC iPlayer remains the most popular VOD

service overall, with 38% of viewing

Netflix had the largest increase in Q1 2014 with a

six percentage point increase, making it the most

popular VOD service outside those provided by

Public Service Broadcasters

We have also seen growth in UKTV and Google

Play as well as Virgin and Sky offerings

The reasons for using VOD include missing

programmes and wanting to watch programmes

when it is convenient

Source: Decipher mediabug - Wave 4 report.

Source: Ofcom Media Tracker, Ofcom, November 2014 16

SKY ADSMART OFFERS NEW OPPORTUNITIES

TO TARGET CUSTOMERS THROUGH TV

Sky’s tailored advertising service, AdSmart, is offering

revolutionary targeting on TV for broadcasters and advertisers

alike

The ability to tailor ad breaks based on a household’s profile

and location is right on-message for the trend in marketing to be

inextricably linked to flexible, personalised content

Available in more than one-fifth of UK households at launch,

Sky believes AdSmart has the ability not just to compete with

existing TV budgets but increase the size of the marketplace in

general

It offers a new opportunity to complement targeted 121

communications which can also be highly targeted and

regionalised

Source: Campaignlive , 30th January 2014

17

MESSAGING AND ADVERTISING USED

BY PROVIDERS

18

DIFFERENT ATL APPROACHES TO MAIN

TELECOMS BRANDS

Sky focus on key series, films

and sport programmingBT Focus on broadband speeds and

capacity through Infinity – featuring

characters to tell the story

Virgin Media has a more holistic

approach to the effect of communicating

through broadband phones and devices

– featuring Usain Bolt

19

http://keepup.virginmedia.com/powerofournetwork

http://keepup.virginmedia.com/powerofournetwork

https://www.youtube.com/watch?v=i1dSvaFqMZ4

https://www.youtube.com/watch?v=i1dSvaFqMZ4

ACQUISITION MAIL

Switching incentives Money off bundled packages

Price led

Free programming as part of bundled package

20

RETENTION – CROSS AND UPSELL

21

TRIGGER MESSAGING: TELECOMS CAN TARGET

Data is profiled using top 10 Cameo

clusters

e.g. It can be segmented by ‘affluent

singles, couples and families etc’

PEOPLE MOVING HOME VIA ROYAL MAIL’S HOME

MOVER DATABASE

1.2m records added per annum

Updated weekly

100k approx. records added each month

4 years historical data available

Name, address and exact move date available

Anniversary and Multiuse data available

Includes personalised “moved to” , un-

personalised “moved from” and Royal Mail Just

Built data22

CASE STUDIES SHOWING HOW

EFFECTIVE MAIL IS FOR TELECOMS

23

VIRGIN USED MAIL AS PART OF A MULTI-MEDIA

CAMPAIGN TO BRING THEIR FASTEST BROADBAND

Background:

Whether you have 10Mb or 50Mb, fast broadband is just fast broadband

until you demonstrate the tangible benefits.

Solution:

When Ofcom said that Virgin’s broadband was twice as fast as everyone

else's, Virgin knew they had a story to drive sales and upgrades. They

used an integrated campaign with mail as an integral part to illustrate that

Virgin Media fast broadband is really fast!

Results:

The campaign achieved three times as many customers for their top level

XXL Broadband as previous campaigns and sales increased 14% year

on year. New customers taking mid or higher tier broadband increased

by 150%.

TO LIFE

Source: DMA, Gold Winner, 2011

24

ORANGE REACHED YOUNGER FAMILY

MEMBERS VIA THE DOORMAT

Background:

Orange wanted to sell the benefits of pre-packed phone deals to

parents of young children who may now have phones of their own.

Solution:

Data profiling helped to unpick the characteristics of parents of 8-16

year olds and from this a highly targeted mail pack was created. The

creative was a scratched vinyl record entitled “can you top-up my

phone Mum/Dad” and offering a pre-packaged phone deal.

Results:

“Excellent” results and evidence showed that the mail piece was

retained. The campaign also won a DMA Gold Award.


25

O2 COMBINED MAIL AND TELEMARKETING

FOLLOW-UPS FOR B2B ACQUISITION

Background:

O2 wanted to drive sign-up from Councils for its Local Government

Future Fund.

Solution:

A key audience for O2 is local government, and knowing that this

audience are facing stringent budget cuts, they wanted to portray the O2

Fund. An integrated campaign including mail and email built awareness

around the Fund.

Result:

41 councils applied – over 10% of the UK Local Government sector.

62 additional meetings were booked for O2 sales managers. The

campaign also won a DMA Bronze Award.

Source: DMA, Bronze Winner, 2012

26

SKY INTEGRATED DOOR DROP ACTIVITY WITH ATL

ADVERTISING TO MAKE EVERYTHING WORK HARDER

Background:

Sky wanted to offset the alienation that sport-specific advertising can

create, by reinforcing and driving deeper engagement with specific target

audiences.

Solution:

A door drop ran simultaneously to the TV advertising during the launch of

the Sky Sports football season. Data modelling revealed three key groups

to target – sports viewers, family groups, and regional sports areas.

Imagery and messaging on the door drop was adapted to suit each

audience.

Result:

“Stunning results”, response outperformed its target by 20%. The

campaign also won a DMA Bronze Award.

Source: DMA, Bronze Winner, 2012

27

DOOR DROPS HAVE THE LOWEST CPA FOR

TALKTALK

Background:

TalkTalk were looking for better CPA in all their media channels and so

decided to test door drops as part of their media mix.

Solution:

Door drop was identified as being the most cost-effective channel. A postcode

sector ranking model was developed incorporating three key attributes:

Proximity to TalkTalk exchanges

Competitor presence

Strength at live exchanges and geo-demographics

Results:

Door drops now have the lowest cost per acquisition of any channel.

Investment has increased from 1.5m to circa 6m packs every month. TalkTalk head of direct marketing,

Michele Lockwood says that for

companies with a broad appeal, it

offers an “economically efficient way

to geo-demographically target

products and messages.”

Source: DMA, Silver Winner, 2010

28

CARPHONE WAREHOUSE REVOLUTIONISED THEIR

BUSINESS WITH CRM USING RELEVANT MESSAGING

Background:

A campaign was needed to persuade customers to come to

Carphone Warehouse rather than go to the network provider for

upgrades.

Solution:

Research showed that customers were more likely to come back if

Carphone Warehouse talked to them at exactly the right time.

They mapped out the customer journey of owning a new handset

through to upgrade and devised relevant messages throughout

that journey.

Results:

Results showed a doubling in response rates at renewal.

ACROSS THE CUSTOMER JOURNEY

Robert Kent, CRM programme manager at Carphone

Warehouse commented on the effects of the CRM

programme:

“Sales on some marketing campaigns have doubled the

response and beyond revenue customers now

experience a higher level of service. With better data we

can target communications more effectively ”.

Source: A Connected Life, Marketing Agencies Association Case Study 215

29

Background:

EE had multiple business challenges at launch: to launch a new brand; to launch a new

technology (4G); to differentiate against four established brands; and to acquire new

customers, in a category where customers are typically locked into contracts for 18+

months.

Solution:

The core product feature; “4G the fastest mobile internet in the UK" made it relevant to

what people actually want to do with their mobiles. This campaign worked across every

channel. Everything from Direct Mail to retail experiences enabled the audience to

interact with EE and 4G.One of the important tasks was to talk to the existing 27 million

customers (Orange and T-Mobile), focusing on business customers as well as

consumers. The mail piece used augmented reality so existing customers could bring

the 4G EE message to life themselves.

Results:

Consideration figures showed appeal to a much wider audience than EE customers. In

fact, by week five considerations were at the same level as T-Mobile. By month three,

EE had drawn level with Vodafone in second place for communications awareness and

won a DMA Gold award.

EE USED MAIL TO LAUNCH 4G


AND NEW BRANDING

30

It’s been proven to be the most emotionally engaging media

People still enjoy receiving it

It has increasing standout in a digital world

It is highly valued by people

It is omnipresent in people houses

It helps uplift other channels and create value

NEW NEWS ABOUT MAIL

31

THE PRIVATE LIFE OF MAIL

MAIL IN THE HOME,

HEART AND HEAD

12 Ethnography households

14 Focus groups

99 Depth interviews

213 Neuroscience / biometric participants

401 BrandScience’s ‘Results Vault’ cases

416 IPA Effectiveness Databank cases

1,000+ Academic articles reviewed

9,504 Respondents across our telephone and online quantitative surveys

18 MONTHS OF RESEARCH

34

DEVELOPED IN 8 STRANDS

Ethnography

Post ethnography survey

Multisensory Communications: review of academic literature

Tactility

Values: Best Mail

Mail and Digital 1 & 2

Neuroscience

ROI/Effectiveness metrics

35

MAIL IN THE HOME

LIFE BEYOND THE LETTERBOX

36

MAIL GETS OPENED – AT HIGH RATES

Statement, bill or information update

Brochure from a company they have ordered from before

Letter – promotion or special offer

Letter – about a product/service they don’t have

Leaflet without an address about a product/service

Leaflet without an address about a promotion/offer

Brochure from a company not ordered from before

83%

71%

69%

60%

59%

54%

54%

OPEN

Source: Royal Mail MarketReach, Ethnographic Quant, Trinity McQueen, 2014 38

MAIL’S JOURNEY ISN’T OVER WHEN

Adults read their mail on average for 22 minutes a day.

IT HITS THE DOORMAT

1.15PM: Collects mail and brings it into the

home with other bags and belongings

1.30PM: Opens mail whilst doing other jobs

2.15PM: Opens parcel

2.30PM: Uses laptop to get details on a piece

of mail received

5.30PM: Uses laptop again to get further

details on the piece of mail from earlier

8.30PM: Brings catalogue into lounge to read

Source: IPA Touchpoints 5 (Data based on Monday – Saturday morning); Royal Mail MarketReach, Media Moments, Trinity McQueen, 2013 39

PEOPLE GIVE MAIL TIME

Mail is kept for extended periods, creating a constant presence in the home.

17 daysfor mail

38 daysfor door drops

45 daysfor bills and statements


AND SPACE

80% of adults kept some mail that

companies had sent them in the last four

weeks.

‘The Holding area’ where it is kept

before being dealt with

‘The Pile’ for mail that has been read

and will be revisited

‘The Display area’ for useful or

important items (local information,

time limited offers)

Display Area

Pile

Holding area

Source: TGI, Kantar Media, 2014; Royal Mail MarketReach, Media Moments, Trinity McQueen, 2013 41

MAIL GETS DISPLAYED

39% of people have a dedicated display area for mail in the home


MAIL IS SHARED

An average of 23% of mail is shared within a household.

Brochure from a company I have ordered from before

Statement, bill or information update

Letter – about a product/service they don’t have

Brochure from a company not ordered from before

Leaflet without an address about a promotion/offer

Letter – promotion or special offer

29%

24%

25%

23%

22%

21%

SHARE

Average of 23% of mail shared

within a household


MAIL OFFERS A LESS CLUTTERED

ENVIRONMENT THAN DIGITAL

70%

“I feel that I

receive too

many

emails”*

*Source: Royal Mail MarketReach, Mail and

Digital Part 1, Quadrangle, 2013

**Source: Litmus Email Analytics, 2013

Source: Royal Mail MarketReach, Mail and Digital Part 1, Quadrangle, 2013

Mail stands out due to the proliferation

of digital messages

3%

3%

22%

72%

48%

18%

19%

15%

0% 20% 40% 60% 80%

More than 10

7 to 10

4 to 6

1 to 3

How many items do you receive in a day?

Email

Mail

51%

of emails are

deleted within

two

seconds**

44

INCREASINGLY MAIL IS DRIVING PEOPLE’S

43%download

something

54%engaged in

social media

87%influenced to

make online

purchases

92%driven to online

or digital activity

86%connected with

business

Royal Mail MarketReach, Mail and Digital Part 2, Quadrangle, 2014

Question asked(S4Q1): How often have you done each of the following online as a direct

result of receiving mail from a business or organisation. Base: All (n=2,375)

DIGITAL BEHAVIOUR

As a direct

result of

receiving

mail

45

MAIL IN THE HEART

CREATING AN EMOTIONAL

RESPONSE

46

TOUCH CREATES A POWERFUL

When people can both see and

touch something, they value it

24% more highly than if they

can only see it.

Over a third of people say that

the physical properties of mail

influence how they feel about

the sender.

EMOTIONAL RESPONSE

+22% +24%

2.75 2.73

3.36 3.38

0

1

2

3

4

5

Psychological ownership Valuation

VISION ONLY VISION AND TOUCH

Participants were asked to subjectively grade ownership and value on a 7 point scale.

Source: Peck, Joann, and Suzanne B. Shu. The Effect of Mere Touch on Perceived Ownership. Journal of Consumer Research, 2009

IPA Touchpoints 5, 2014 49

PEOPLE FEEL VALUED AND HAVE A

BETTER IMPRESSION OF THE BRAND

The emotional impact of mail versus email

I am more likely to take it seriously

It gives me a better impression of that company

It makes me feel more valued

63%

57%

55%

18%

17%

25%

(% True of Mail vs. True of Email)

MAIL EMAIL

Source: Royal Mail MarketReach, Mail and Digital Part 1, Quadrangle, 2013 50

MAIL IN THE HEAD

HOW MAIL IMPACTS THE BRAIN

51

THE BRAIN RESPONDS MORE STRONGLY

Mail had a much more powerful overall impact on the key measures of the

neuroscience study than email or TV.

TO MAIL THAN TO TV OR EMAIL

Source: Royal Mail MarketReach, Neuro-Insight, 2013

168

202

172

127

165

130

105113

100

0

50

100

150

200

250

Engagement Emotional Intensity Long-term Memory Encoding

Ind

ex v

s.

'No

rma

l' r

es

tin

g b

rain

MAIL EMAIL TV

54

IN A MULTI MEDIA CAMPAIGN

SEQUENCING MAIL LAST MAXIMISES IMPACT

Source: Royal Mail MarketReach, Neuro-Insight, 2013

Mail after TV and email

100 100 100

112

101

106

126

121

110

80

90

100

110

120

130

140

Engagment Emotional Intensity Long-term MemoryEncoding

Ind

ex v

s.

resp

on

se

fro

m first e

xp

osu

re

MAIL SEEN FIRST MAIL SEEN SECOND MAIL SEEN THIRD

Engagement

55

MAIL IN THE WALLET

HOW MAIL MAKES MONEY

56

MAIL DELIVERS ROI

Mail ROI showed a strong channel performance in BrandScience cases

Revenue Return on Investment of clients using direct mailSource: Royal Mail MarketReach BrandScience, 2014

0

2

4

6

8

£

RROI (Revenue ROI)

57

Total ROI increased 12% when mail was included in the mix.

MEDIA MULTIPLIER EFFECT

MAIL CREATES A MEASURABLE

Source: Royal Mail MarketReach, BrandScience 2014; advertiser cases including mail versus cases without mail.

4.22

4.63

5…

4.734.93

6.31

1

2

3

4

5

6

7

Total Comms TV Print

RR

OI

RROI-NO MAIL RROI-WITH MAIL

58

MAIL DELIVERS NEW AUDIENCES

Adding mail to the mix opens up new responsive audiences. When mail is

added to the schedule

versus email on its own

Source: Royal Mail MarketReach, Mail and Digital Part 1, Quadrangle, 2013 59

INCLUDING MAIL DELIVERED TOP-RANKING

Campaigns that included mail

were:

27% more likely to deliver top-

ranking sales performance

40% more likely to deliver top-

ranking acquisition levels

SALES AND ACQUISITION PERFORMANCE

Source: Royal Mail MarketReach, IPA Databank Meta-Analysis, Peter Field, 2013

+27% +40%

45%

30%

57%

42%

0%

10%

20%

30%

40%

50%

60%

Sale Acquisition

% C

lien

ts l

isti

ng

to

p p

erf

orm

ing

im

pro

vem

en

ts

RROI - NO MAIL RROI - WITH MAIL

60

WITH MAIL IN THE MIX, MARKET

SHARE GREW 3x MORE EFFICIENTLY

Mail included in multi-channel campaigns drove market share growth with

3x the efficiency versus non-mail advertisers.

2.9xMarket share growth

for all clients

3.4x Market share growth

for service sector

Comparing market share growth per 10 Extra Share of Voice points (ESOV) shows the increase in efficiency of advertising plans including mail.

Source: Royal Mail MarketReach, IPA Databank Meta-Analysis, Peter Field, 2013 61

MAIL IN ACTION

EDF

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EDF USED TARGETING AND CHARM TO

MAKE CONSUMERS FEEL ZINGY ABOUT ENERGY

Background:

EDF Energy was facing many challenges. Operating in a low interest commodity

category, the industry had the lowest amount of switching since records began. When

EDF Energy stopped face to face selling, they lost their largest acquisition channel. They

therefore needed to maximise the potential of other channels.

Solution:

EDF wanted to reach people who had not switched from their competitors and shake

them up. But a new angle was required to engage the audiences.

EDF had launched a new ATL brand positioning ‘Feel Better Energy’ with the brand

character ‘Zingy’. This offered the perfect opportunity for a radical change in direct

marketing.

Launching its biggest ever direct campaign, EDF used Zingy to persuade people to open

and engage with the new brand messages. Direct mail , door drops, inserts and direct

response print were deployed to convert awareness into action.

Sources: AIS London, IPA Effectiveness

Bronze Award 2014, Marketing Week

Engage Award Gold 2013,

63

EDF REACHED KEY AUDIENCES AND

Results:

This was the most successful campaign EDF Energy had ever run, giving

them a new route to a previously unresponsive audience.

EDF reached their 2012 year-end sales objective three months early. The

campaign achieved a record breaking 43,000 calls and19,500 direct sales,

exceeding sales targets by 30%.

Short term incremental gross profit showed that every £1 spent on the

campaign generated £2.36. Cost of sale was 23% lower than target,

making direct marketing a feasible acquisition channel for the first time.

EDF won c.25% of all market switchers making EDF the fastest growing

B2C energy supplier in the UK. 55% of sales came from customers who

had never switched before. 73% of consumers who responded to the

direct campaign said they wouldn’t have switched if they hadn’t received

the direct marketing.

The long life of mail was proved by the fact the it was still generating calls

three months later.

CHANGED BEHAVIOUR

Sources: AIS London, IPA Effectiveness

Bronze Award 2014, Marketing Week

Engage Award Gold 2013,

64

IN SUMMARY

Mail brings a brand into the home where it is kept, displayed, and/or shared

Its tactile qualities have powerful emotional and rational impact that can be identified

and proven

Mail makes your message more memorable

Mail drives successful return on investment

When used in integrated campaigns, it can provide a measurable media multiplier effect

Mail delivers top-ranking sales and acquisition growth and efficient market share growth

The newly transformed Royal Mail is a credible, motivated and connected partner to you and your

marketing agencies.

Media and Data

Planning

Bespoke Research

and Insight

Data Provision

Distribution

65

BIG DATA IS DRIVING MORE 121 DIRECT

Data is driving more 121 and personalised interactions.

Trigger based communications based on actual and future behaviour change.

There is a strong role for highly targeted personals mail in this space.

Less short termism and more longer term ROI.

COMMUNICATION

67

ADVANCES IN TECHNOLOGY MEANS

USB film content

Augmented Reality: Online / offline

integration

VideoPaks

Sensory Mailings: Taste & smell

increases tangibility

Interactive print

Digital templating: cheaper, faster

& more personalised

QUICKER, CHEAPER & MORE IMMERSIVE MAILINGS

68

http://www.youtube.com/user/PromoMee

http://www.youtube.com/user/PromoMee

NEW DEVELOPMENTS FOR MAIL

Barcode

A new barcode standard for machine readable Business, Advertising and Publishing Mail

Technology

Sorting machines that read the new barcode and collect mail data

Reporting

Mail Analytics that reports on volume, compliance, predicted delivery and overall performance

Ultimately generating more efficiency, greater transparency and

measurement for your mail campaigns

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WHAT WE COULD DO FOR YOU

Work with you to increase the performance of your DR channels

• Best case for mail

• Test matrix

• ROI

• Contextualise within

the media mix

• Addressed/

unaddressed mail

1. Review your

competitive set.

2. Understand the key

dynamics of your

sector,

3. Unearth powerful

insights in relation to

Mail and how Mail can

address your business

issues.

• Acquisition

• Loyalty

• Retention

Understand the key

issue

Sector experts gather

insight Recommendation

70

Royal Mail, the cruciform and all marks indicated with ® are registered trade marks of Royal Mail Group Ltd.

Royal Mail Group Ltd 2014. Registered Office: 100 Victoria Embankment, London EC4Y 0HQ.© Royal Mail Group Ltd 2014. All rights reserved.

THANK YOU

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