Which Costs More: Video or Direct Mail?

What are the economics of producing and distributing a direct marketing video? And, how does it line up with costs for direct mail? If you’re a traditional direct marketer who has lived and breathed marketing costs, then running the numbers should come naturally. For this discussion, we’ll use direct mail as the comparison because historically it’s the distribution channel of choice

What are the economics of producing and distributing a direct marketing video? And, how does it line up with costs for direct mail? If you’re a traditional direct marketer who has lived and breathed marketing costs, then running the numbers should come naturally. For this discussion, we’ll use direct mail as the comparison because historically it’s the distribution channel of choice for direct marketers.

We’ve created a “Video Budget Checklist” that helps you itemize cost comparisons of creative, production and distribution between video and direct mail. If you’d like a copy, email me using the link in the left column. It’s free for our readers.

(If the video isn’t just above this line, click here to view it)

Direct mail can come in all sorts of configurations. Low-cost postcards. A simple package of a letter and flyer inside an envelope. Or more expensive with multiple enclosures such as a letter, fold-out four-color brochure, lift note, order form, reply envelope and outer envelope. Sometimes the outer envelope is a custom size or has an oversize window, or there are expensive die-cuts on cards or tip-on elements that are outside of typical print configuration.

The fixed costs to create each of these packages by employees, agencies or freelance creative teams are pretty broad, from several hundred dollars to well into the five-figures when using proven, top-flight direct response creative professionals.

A wide range of configurations can apply to video production, just as it can to direct mail.

You can pop out a 45-second video using your Webcam or flip-camera and post it on YouTube. You just have to ask yourself if the poorly lit, distracting background, muffled or echoey sound of that presentation exemplifies your organization. Alternatively, the video could be purely voice-over with words scrolling along on the screen. Or you can make it visually more alive with photography images or stock video footage. At a more costly level, you might shoot testimonials or interviews in a studio or shoot on location to demonstrate your product. Of course, length impacts cost (just as the number of components impacts cost in direct mail). There are a lot of variables that go into video production, just as there are for direct mail.

The point is this: Start with a budget you’re comfortable with, talk with writers (ideally writers experienced in both direct response print, online and video), develop a video script and storyboard, and work with a skilled video editor. Don’t just be wowed by special effects on someone’s demo reel. Dig in and learn what results were produced from some samples or case studies. You might just want voice-over with images on screen. (See our last blog post for an example of a 3-minute video and details of how we adapted it from a direct mail package.)

If your personality is a draw, you can record yourself on a small camera that can fit in a pocket with a lav microphone for under $200, total. Make sure you have good lighting and background. Or spring $500 or so and get a green screen and lights. That’s the equipment we use to shoot our video for this blog. Be aware, assembling the right equipment and editing software is the easy part. Knowing how to use it all to your best advantage comes from training and practice—or hiring a pro.

Distribution Costs
For direct mail, you have list costs if you’re renting names, data processing, printing, lettershop and postage. The cost can range widely. If you’re testing in small quantities, you’ll pay more per piece.

Knowing the volume of prospects or prior customers to mail, the marketer calculates how many responses are needed to make a specific profit (or break-even) objective. Translate that number into a required response rate to meet your objectives—your allowable marketing cost—and presto, you can use the test of reasonableness to see if the numbers pan out.

For video, your distribution cost is driving viewers to your landing page. You might email your customer file, or rent a list, and give the reader a compelling reason to click to your landing page to watch the video, possibly opt-in for more information, or attempt to convert to a buyer then. You will need to include the cost to set-up the landing page and related items.

We suggest you begin with a budget where your objective is to create a video for the amount of money it would cost to produce a moderate to elaborate direct mail package (although video production on the cheap is possible—and might work).

Then compare the cost to print and mail a direct mail package versus that of emailing (whether it’s to customers at a low cost to email, or rent an email list at a higher cost). And add in the cost for developing your landing page. Chances are your cost per contact will be less for email and the landing page, but as we all know, it all comes down to the cost per sale or lead so bring your focus back to this metric.

One example worth mentioning is that of the Dollar Shave Club. Perhaps you’ve read about it. A big success for a 1:34 video that reportedly cost $4,500 and after a few days generated over 12,000 orders. The video has now been viewed over 4.6 million times.

Bottom line: just as you’d run the numbers to see if it makes financial sense to use direct mail, you need to run the numbers for video, too. And you just might be surprised how favorable the numbers look to reach out and explore video.

P.S.: Just out: comScore has released its April 2012 online video rankings data with a few notable metrics:

  1. 181 million U.S. Internet users watched nearly 37 billion online content videos in April.
  2. 85.5 percent of U.S. Internet audience viewed online video.
  3. The duration of the average online content video was 6.4 minutes.

How to Convert a Direct Mail Package to Online Video

Today we demonstrate how to convert a successful direct mail package into an online video. You’ll see how copy style translates and morphs from print to the spoken word, and how to integrate aspects of the original print design features in this video. Our criteria for this instructional video included these three

Today we demonstrate how to convert a successful direct mail package into an online video. You’ll see how copy style translates and morphs from print to the spoken word, and how to integrate aspects of the original print design features in this video. Our criteria for this instructional video included these three elements: A package we had originally written and designed, multiple enclosures (letter, sales sheet, lift note and order form) and a proven response generator.

When it was first tested, this direct mail package lifted response 35 percent over the control. On that strength, it became the new control and was mailed every month for three years, ultimately sent to over 21 million consumers.

This instructional video explains our process to convert this direct mail package to a short, but fully produced promotional video (under three minutes), scripting, voice-over persona, design elements, along with commentary about specific choices and plans we made while developing the video.

So while we’re light on words for you to read, you can digest this post in this in-depth video.

(If the video isn’t just above this line, click here to view it.)

12 Reasons to Fuse Direct Marketing and Video Marketing Now (Part 2)

Direct marketing formulas applied to video sell products, generate leads and raise money for non-profits. The leap to online video is exploding, and if you keep up with what’s hot today, you know it’s video. But too often, the video effort doesn’t bring in responders because of the lack of structure and call-to-actions

Direct marketing formulas applied to video sell products, generate leads and raise money for non-profits. The leap to online video is exploding, and if you keep up with what’s hot today, you know it’s video. But too often, the video effort doesn’t bring in responders because of the lack of structure and call-to-actions that a disciplined direct marketer includes. That’s why, if you’re a direct marketer, video can be profitable for you because you’re not afraid to sell, you know how to test, and you track the analytics.

12 Reasons to Integrate DM and Online Video (Part 2 in a 2-Part Series)
In our last blog post, we outlined the first of six reasons to fuse direct marketing techniques with the reach of online video marketing. We continue today with the final six reasons on the list:

7. Video can go viral. But don’t count on it. Your chances of a video going viral are about like that of getting struck by lightening. A recent example of a successful new product launch for what we as direct marketers would consider a classic DM continuity program is the Dollar Shave Club. You’ve probably heard about it. Thousands of orders, small start-up cost, everything you admire if you’re a marketer. But consider this: a few years ago it was impossible to make money selling a $1 a month (plus S&H) continuity program. The marketing cost was too high. The Deep Dive: With effective online marketing, marketing costs are slashed and you can make money selling a commodity product via a continuity program using a low price point.

8. Use a short video on your website to convince someone to opt-in to the rest of the story in another, more in-depth video delivered immediately. You can set up an intriguing premise, reveal a little of the story, and importantly, you bring people into your sales funnel when you capture an email address. The Deep Dive: if selling your product doesn’t typically happen on impulse, and you must first build trust, you can tell your story over short, strategically sequenced video clips, delivered via email autoresponders over time.

9. You can bring a complicated story to life. Imagine trying to describe the inner workings of your artery and heart using video footage! Suddenly, what was difficult to show in print can be brought to life in a video and the viewer is engaged. Using the opt-in strategy as identified in #8, over a few doses of video, you engage the viewer more so that they salivate at the idea of getting your product. This is a good strategy for selling products that require more explanation. The Deep Dive: Video can shortcut the visualization-and engagement-of a complex concept that words on a page can’t accomplish quickly enough before the reader loses interest. The willing suspension of disbelief can magically transform your viewer to a place unachievable with still photos and words.

10. Video can describe products that appear in a catalog. Catalog-browsing apps on mobile devices are now commonplace, but soon that could be replaced with short videos that can be watched on a tablet. By 2014, it’s predicted that more Internet content will be viewed on mobile devices than desktop/laptops. The Deep Dive: Watch the mobile space and video closely. Convergence of technologies will enable consumers to be entertained while using a mobile device, giving you opportunity to prompt intrigue and build a relationship.

11. Non-profits can save an enormous amount of fundraising cost by moving online and creating compelling video for constituents. Interview people you’ve touched. State your case. Engage. You bring your non-profit to life online and at a fraction of the cost of other media. The Deep Dive: If you’re a non-profit, get your advocates and supporters on video and let them tell your story for you. It’s more credible, and it builds community.

12. Integrate social media with online video and encourage comments, recommendations, and shares. It’s easy to add the feature for people to post their comments and share your video with Facebook plug-ins. Its costs you virtually nothing and is the most powerful way to get your word out. The Deep Dive: you can no longer afford a silo approach to marketing. You must integrate outbound, inbound, social media, search, text, video, desktop, mobile, and so on.

In a future blog, we’re going to illustrate how to convert a successful direct mail letter that has been mailed to millions of consumers, could be converted into a direct marketing video. When that blog appears, you’ll see how using direct response copywriting techniques in video script writing can work. In the meantime, comment below and tell us your video marketing successes or what you’d like to read in future blog posts.

12 Reasons to Fuse Direct Marketing and Video Marketing Now

Tried and true direct marketing formulas + online video = your next powerful marketing opportunity. Blending direct marketing sales approaches with online video, where 40 billion videos are watched monthly, can showcase your products and services, build trust, close deals, and raise money. Here are reasons to fuse

Tried and true direct marketing formulas + online video = your next powerful marketing opportunity. Blending direct marketing sales approaches with online video, where 40 billion videos are watched monthly, can showcase your products and services, build trust, close deals, and raise money. Here are reasons to fuse together the power of direct marketing with online video. Today we begin with the first 6 reasons.

1. Now is the early stage for the blending of DM disciplines and online video. While DM and video have been around for years, many marketers have yet to blend the methodologies together. The Deep Dive: Early adopters have been using video with streaming words and voice-over, interviews and product demonstrations. But the next stage of successful video uses proven direct marketing copywriting techniques and call-to-action in video script writing, and uses DM design techniques that will move production values to a higher level.

2. Online video use and views are exploding.

  • In just one recent month, 181 million U.S. Internet users watched 43.5 billion videos averaging over 22 hours per viewer.
  • Over 84% of internet users watched an online video.
  • Americans watched over 5.6 billion online video ads. In fact, online video ads are 38% more memorable than TV ads.

The Deep Dive: According to comScore.com, a global source of digital market intelligence, online video viewing was up 43% from Dec. 2010 to Dec. 2011 This video is a summary of comScore’s findings about the explosive increases in online video viewing during the past year. (By the way, we’ll show you, in an upcoming post, how you can drastically improve upon their really distracting audio quality for about $30.)

If you’re not incorporating video in your marketing strategy, you’re out-of-date.

3. Consumers’ attention span is shorter than ever, and it’s not likely to increase. People will give you a few seconds to watch a video. Engage them quickly, and they’ll stick with you long enough to get your message across and prompt enough curiosity to check you out more. The Deep Dive: Does this strategy sound a lot like using a compelling teaser on an outer envelope, or a strong subject line in an email? Of course it does! So, set up your video strategy properly by getting the viewer to opt-in to watch more of your future videos.

4. Websites with video are perceived as having higher importance. When you add videos, you attract more in-linking domains than with plain text. The Deep Dive: Video inclusion on your social media or blog posts has been shown to triple inbound linking. The following chart is from a well-respected seomoz.org blog post that goes more deeply into this topic. http://www.seomoz.org/blog/what-makes-a-link-worthy-post-part-1.

5. An inbound marketing strategy may be a challenge for a traditional direct marketer to accept, but video has the power to draw prospective customers to you. The Deep Dive: Video on blogs and posted YouTube can be shared on social media and will draw traffic to you. This is a far more powerful-and less costly-marketing strategy than pushing your unsolicited message using outbound marketing strategies.

6. Online video analytics are amazing. Post your video on YouTube and over time you’ll see not only how many times your video was viewed, but second-by-second you’ll see retention levels and discover at what point you lost your viewer. You’ll see demographic information. You’ll be smarter so much faster that your head will spin. The Deep Dive: If you’re a traditional direct marketer, you surely love numbers. With video, you get a lot of data to crunch that will make you smarter and your selling more effective.

In our next post, we’ll reveal six more reasons why you should fuse direct marketing and video marketing now. In the meantime, comment below and tell us your video marketing successes or what you’d like to read in future blog posts.