We work in the direct mail industry...
80B USPS ads @ $.60 in 2013, flat since 2009.
In 2016, it no longer appears easy or inevitable.
Then find superior results in digital.
We want to transition the Direct Marketing Industry off of paper because it is in the best interest of our clients -- the advertisers.
The truth is that our industry does not care about what channel it uses to contact consumers. It wants something that is universal, cost-effective, reliable, measurable, and fits with the way they think. For large-scale direct marketing organizations, only physical mail fits the bill today. For financial institution, it remains one of the most effective ways to generate new business. Dollar-for-dollar, nothing matches direct mail for generating demand from prospective customers.
Sure, our clients use email when they can. They have to pay for printing and postage so they jump at the chance to use email when it works better. Unfortunately, they can only get good response from email when they have a relationship that gets them past the spam filters. They have no usable way to determine if a specific consumer is more responsive on a digital channel. Even if they knew, direct mail and digital advertising use such different tools and techniques that coordinating messaging and offers is too labor intensive to justify in most cases.
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Before founding Exemplar, our CTO, Joshua Ellinger, helped build a ground-breaking process optimization solution for chemical plants while working at Pavilion Technologies (acquired by Rockwell). After spending a decade working with direct mail, we figured out how to solve an equivalent problem in the advertising space - the Channel Agnostic Optimization problem. Computers are finally fast enough that we can use techniques that were impractial even a few years ago. 'Big Data' is making more information available for us to leverage. Our client have wanted this solution since we started working with them. Nothing like it exists today.
Once we support real optimization, the advertisers can focus on strategy/message/offer and let us find the best delivery channel. It may continue to be physical mail for 80% of the population for the next decade. But it may be email for other 20%. Or it may be mobile, social, your favorite online game, a door hanger, a specific radio channel, or a TV show. It may be that 20% of the population is just not going to respond to anything and 20% is going to always buy.
The key innovation is that the Optimizer finds multiple feasible alternatives near the 'business-as-usual' case based on hints from the domian experts, instead of returning a radical recommendation from a black-box algorithm.
Direct marketers can then focus on marketing instead worrying about causality, performance measurement, and limitations of a specific channel. We preserve the universality and location-based targeting of the direct channel and liberate them from worrying about delivery. Over time, we expect that gradually more and more delivery will naturally shift to digital channels based on consumer behavior.
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If you know our industry, your first reaction should be that this is impossible. That's what we thought at first. But we have figured out how to get rid of paper, not instantly in one magical step but gradually in a way that is actually feasible. A large telco is our starting point. We expect to achieve to redirect 5-10% of their physical mail volume to email within a year of deployment and save them millions of dollars on printing. Within 10 years, we hope to shift 80% of all direct mail into a variety of digital alternatives.
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Check out Xclaim Mobile, a company we spun off in 2016. Their technology provides gives us a destination to destination to send people. As they gain adoption, we will provide the mechnanism to seemlessly find the customer on the medium of their choices rather than shoving paper at them.