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Direct Mail Marketing vs. Social Media: Which Brings a Better ROI?

June 2nd, 2016 by Joseph Merritt Company

Social media icons 'versus' a direct mail envelope icon.Businesses these days are facing a brave new world when it comes to their marketing tactics. In addition to more traditional media like print, radio, out-of-home advertising, and others, there are “new media” marketing channels like search marketing and email to consider.

Unfortunately both traditional and new tactics can be costly and time-consuming, and some businesses might not have the resources for both (even if they know that marketing is a must). If this sounds like you, you need to decide which makes more sense for your company – and the best way to do that will be to figure out which delivers the better return on investment (ROI).

Which brings in the better ROI – traditional media or new? That’s too big a question for a single blog post to answer, but we can certainly get the ball rolling by looking at an example of each. Let’s say, direct mail marketing (traditional) and social media marketing (new). Which will be more likely to deliver the better bang for your marketing buck?

Calculating Social Media Marketing’s Return on Investment

Fundamentally, determining the ROI of a social media marketing campaign will be the same as for anything else. Return on investment equals return (dollars in) minus investment (dollars out). Simple! But for social media the “dollars in” can sometimes be tricky to determine.  

Until quite recently, many gauged the success of a social media marketing campaign in its own terms: with numbers of new likes, post engagements, shares, clicks, et cetera. But raw engagement might not always translate directly into more revenue.  

Increasingly sophisticated analytics, however, have made this less of a problem. Let’s say that a given social media campaign nets you 100 post engagements and 1 mailing list signup (1% of engagement). Let’s also say that a typical member of your mailing list has a lifetime value of about $50. With those metrics, every post engagement had a value of about $0.50. Using this benchmark, you can determine ROI based on the amount of money that a campaign needs to spend per post engagement. Other factors could be e-commerce sales attributed to social media referrals, and others depending on the specifics of your business. (Kevan Lee has a good post on the subject over at the Buffer blog.)

The problem with this, of course, is that it relies on detailed analysis of past campaigns for the metrics needed to accurately determine ROI. There really is no “average social media marketing ROI.” This could be a problem if you’re just getting started with social media marketing.

Direct Mail Marketing Offers a More Concrete ROI

A cartoon man carrying an enormous envelope.Unlike social media marketing, direct mail has been around for long enough that there is a good amount of industry-wide data to draw on. According to a piece cited in Direct Marketing News, the response rate for direct mail is 4.4%, with 79% of consumers acting immediately on direct mail and 40% of consumers claiming to try a new business based on a direct mailer.

These stats account for another widely-cited number from the Direct Marketing Association: direct mail marketing has been shown to bring in on average a whopping 13-to-1 return on investment, among other benefits. In terms of bringing in raw returns on investment, direct mail is one of the undisputed masters.

Direct mail marketing can even improve the performance of digital campaigns by using cross media and variable data printing to channel more potential customers online by using personalized URLs (PURLs) and custom QR codes.  

Conclusion: Social Media or Direct Mail?

Ultimately, the best strategy for any business is to utilize multiple tactics and channels. But if your budget or other circumstances force you to choose just one for the time being, it seems clear that direct mail is a better choice than social media in terms of bringing in the best immediate return on investment.

If you’re interested in launching a new direct mail marketing campaign, the team at Merritt Graphics Print Solutions can help with everything from planning and design to printing, fulfillment, campaign management, and more. Get in touch by calling 800-344-4477 or sending an email to printsolutions@merrittgraphics.com today. 

Posted in the category Marketing.

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