You Ask, I Answer: How Will AI Impact Direct Mail?

In today's episode, Mark asks, you mentioned that direct mail could become more valuable due to artificial intelligence. Could you elaborate on this? How could AI enhance the effectiveness and ROI of things like direct mail and print? So there's two different aspects at work here, two different ways that this can happen. First, in particular for printed items, generative AI, especially diffusers, image generators, these things can create visuals that are incredibly eye-catching, incredibly compelling.

When you look at some of the stuff that comes out of Dolly or Mid-Journey or Stable Diffusion or any of these systems, you look at them and go, that is incredible. There are ideas that you can bring to life that are prohibitively expensive, if not physically impossible to create, right? A moonscape with a science fiction city and spaceships flying by. Like, yeah, you can hire a designer to do all that 3D work and stuff where you can have a machine create that and then put it into a physical publication, into a print publication. You know, you have, think about the time and expense of doing a photo shoot for a cover of a magazine.

And then imagine what it would look like to generate the same thing with today's models. Today's image generation models are they are so difficult to tell apart from reality when you choose to make them photorealistic. Um they have largely solved things like how many fingers does this person have, right? Um the ongoing joke about diffusers is that they just can't get hands and fingers right. They're much, much better now.

Um, even that from six months ago, the the quality they generate is incredible. So we have all these images that we use that, in all honesty, they're kind of stock commodities, right? If you think about the cover of something like Better Homes and Gardens, right? It's a garden. There's a garden there with a chair and some flowers and stuff like that.

Or it's a you know a kitchen with something being, you know, someone cooking something. That is commodity content that can be generated by machine and be just as good as the real thing. And less expensive, less work to do, faster to iterate, and you can again do things that might not be possible or might not be within your budget. If I wanted to have a book cover made for uh you know, an AI book. In fact, I did this recently with my woefully incomplete book of generative AI.

I wanted a pizza box with one slice of pizza left in it because I do a lot of pizza analogies. I use generative AI to make that book cover and it looks good. Um is it perfect? No. Can you tell it's AI made by AI?

Sure can. Um is it good enough? Yes. Is it did I have to stage it and buy a pizza? No, I didn't.

I didn't have to go to all that work. Now, to be clear, we don't necessarily want to rely solely on these technologies and have dramatic negative consequences on the economy, right? But I was for my book cover, I'm not taking work away from anyone. I would have done something myself anyway, so just used AI instead. So I got higher quality and more of what I wanted.

And it didn't change the economics of it. Could I have hired a designer to but to do my book cover? Sure, I could have. Um, did I? Have I?

I've only done that once, and it it didn't really make a big difference. So, in that instance, uh, AI was a great solution. It was fast, it was easy, it was inexpensive, and it made a great piece of art that I could use further for that. So that's the first aspect. The second aspect of how AI can be used to enhance the value of a uh print industry is using classical AI.

So remember, there's three branches of artificial intelligence: regression, classification, and generation. And generation really is a mashup of regression and classification. Regression is, hey, here's a bunch of data and an outcome. What data corresponds to this outcome? Classification is hey, I've got a bunch of data organize it so that I can see what the commonalities are.

And those are those are very common, but we don't pay much attention to them, and we should. Regression algorithms in particular, you see in things like attribution modeling. And in the direct mail and print industry, I am constantly astonished to how many people do not a great job of attribution for their direct mail pieces, right? When you get a piece of direct mail, there's no customization, there's no tracking, there's no there's no thought given to how to measure its effectiveness. When it's not hard to do.ai, I could just put the URL there, or I could put trust insights.ai slash mail23 and set up custom tracking codes in that redirect that send people to the right place, but allow me to track it properly and intelligently.

And again, so many marketers just don't do this. So many marketers just skimp on the tracking, they skimp on the analytics, and they lose out. And then they can't tell what's working. Having that data helps you prove what's working, where your money went. So using regression and classification algorithms with customer data, doing things like assembling cohorts, identifying members of your database, the most likely to convert, the most likely to convert from print, right?

If you know you if you have the data, you know who's going to do what, you can then do the attribution model. Say, this is who converts from print versus who converts from other channels. You've just got to have the data in there. So those are kind of the two main avenues. You can use artificial intelligence to improve the effectiveness and efficiency of your marketing.

Don't send, for example, direct mail, which is costly to send because it requires physical resources compared to email. Don't send high cost, high value messages to people who are not likely to buy. But again, most people don't do that. And second, using the technology to generate new stuff, to make stuff that otherwise would be out of reach, particularly if your brand doesn't have a ton of money. And so anything that gets us results that punch above their weight, right?

Results that look more expensive than they than they actually are, that's a good thing. That's an advantage. That is a strategic advantage for any company, but especially companies that are not as resource-rich as their larger competitors. So that's the answer to the question. Thank you for the question, and uh, I'll talk to you next time.

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