To the 2006 ROI Award winner: Your trophy is in the mail

This year, ROI (return on investment) has become a battle cry for marketers in every industry. On this, the last day of the year, I’d like to present a Digital Solid award to the marketing medium that has shown the best overall ROI in 2006.

And the award goes to … the envelope please? [sound of ripping paper] Well, no surprise here. Once again it’s that marketing workhorse, direct mail.

Yes, with all of the marketing technology tactics going — including those with incremental costs in the pennies (e.g., email marketing) and precision targeting that is a direct marketer’s dream (e.g., search engine marketing) — the trophy goes to the grand dad of them all.

Direct mail marketing continues to generate returns averaging between 13 and 16 times original investments, as measured by Direct Marketing Association research. This is as reported by The Winterberry Group, in its December, 2006, white paper on vertical marketing trends in direct mail. Professional associations have been known to puff up their numbers, but these don’t particularly surprise me.

I have several friends who manage multi-million dollar annual direct mail budgets. Each is in a different business category. None of them likes what they have to spend on the medium (postage, printing and lists are all going up faster than inflation), but they all report results that far, far outpace this spending.

What does this tell us about the future of marketing technology? Do we abandon online and mobile techniques and begin (or resume) pouring resources into direct mail? No way. The same Winterberry study emphasizes diversification of techniques and their careful integration. I and my friends agree with this recommendation: Direct mail yields the best ROI when complemented and supported by other media.

It’s also no accident that direct mail marketing is the most mature of measurable marketing technologies.

As other techniques “grow up,” we’ll see them morph and focus, just as direct mail has. Guided by smart marketers and the feedback loop of a well-designed CRM database, other media will evolve to be as effective as direct mail. With lower incremental costs, other media will quickly surpass direct mail in terms of ROI.

Watch this blog in 2007 for up-to-the-minute news on how other media are faring in their progress at delivering improved ROI. It will be an exciting race to the 2007 award, with many promising contenders.