Partially addressed mail

This guide will tell you all you need to know about aligning your partially addressed mail (PAM) campaigns to benefit from word-of-mouth using Herdify targeting.

The targets

The Herdify targets for partially addressed mail are provided as a list of postcodes, with scores if required. These can be downloaded from the Herdify platform. Only postcodes where word-of-mouth activity has been detected are included.

The Herdify score measures the prevalence of word-of-mouth activity in a postcode sector. If everyone in a postcode sector is exposed to word-of-mouth, then the score is 100. If no one is exposed to word-of-mouth, then the score is 0.

Areas with detected word-of-mouth typically outperform those without, with most brands finding that higher-scored postcodes deliver better campaign performance than lower-scored. This varies though: some brands see diminishing returns in postcode sectors where word-of-mouth is widespread and brand awareness is already high.

Opportunity filtering

The Herdify model identifies areas of word-of-mouth activity but does not include an opportunity filter. If you routinely apply opportunity filtering to your PAM campaigns — for example by suppressing postcodes based on the proportion of existing customers — you should continue to apply this in the way you usually would, on top of Herdify targeting.

In practice, this means using the list of Herdify postcodes to prioritise initial selection, then applying your opportunity filter as a second step. The two methods complement each other; combining them will give you the benefit of word-of-mouth targeting while ensuring you get value for money from your campaigns.

Postcode selection

Partially addressed mail targets households at full postcode level, typically around 15 households per postcode. The Herdify platform provides postcode-level targeting data, which can be used to prioritise the postcodes included in your PAM campaign.

You or your PAM provider may use geo-demographic or other targeting to identify the most relevant postcodes for your audience. We recommend using the Herdify scores in combination with your existing targeting methods to achieve the best results.

Building a campaign

To build your PAM campaign using Herdify targeting:

1. Download the Herdify postcode targets from the portal. This will be your starting point for postcode selection.
2. Apply any geo-demographic targeting or opportunity filtering you usually would, to refine the selection to the most relevant postcodes for your brand.
3. If the volume of postcodes remaining after additional filtering is more than required for the campaign, prioritise those with the highest Herdify scores.

On the rare occasion that the volume of Herdify postcodes is less than the desired volume for the campaign, select all Herdify postcodes first and use geo-demographic targeting to select the remainder.

The first time you follow this process it is beneficial for the person doing the selection to go through the process with your Herdify Customer Success Manager. This could be someone from your team or an agency.

Extensions

The process above is the starting point for using Herdify in your PAM campaigns. Most users will start with these, as they incorporate the benefits of targeting word-of-mouth while sticking closely to what they have done before.

Once comfortable, you can explore additional ways to benefit from word-of-mouth targeting:

• Testing postcodes that would be excluded by geo-demographic targeting alone, but which have high Herdify scores. Word-of-mouth activity can drive strong response rates in postcodes that would not ordinarily be prioritised by a demographic model, and including these in future campaigns may improve overall performance.
• Analysing campaign performance across both geo-demographic scores and Herdify scores at the same time, to identify the combinations that perform best. For example, you may uncover that postcodes with Herdify scores above a certain threshold perform consistently well, regardless of their geo-demographic profile.
• Using targeted messaging in the creative that is relevant to the local area, such as referencing the area by name, or asking recipients if they know anyone already using the brand.

Testing

Many users want to set up a test in their first PAM campaign to measure the benefit of targeting word-of-mouth. Doing so can help identify how this targeting can combine with existing methods like geo-demographic targeting to have the largest impact and will help you report the value of Herdify now and in the future.

We recommend that testing follow some simple guidelines:

1. Limit the test to two targeting groups:

   • Group a: one selected using the existing method
   • Group b: the other selected using the existing method combined with Herdify

   There may be postcodes with Herdify scores in group a, as they can be selected by the existing method. Including these ensures it is a fair test of the benefits of specific word-of-mouth targeting over the existing method. To prevent bias, you should ensure the highest ranking postcodes from the existing model are not reserved for group a. The best way to do this is to allocate postcodes alternately to each group:

   1. Rank all postcodes using the existing method.
   2. Allocate the highest ranked postcode to group a.
   3. Allocate the highest remaining postcode with a Herdify score to group b.
   4. Allocate the next highest remaining postcode to group a.
   5. Continue alternating steps 3 and 4 until enough postcodes have been selected.

2. Split budget 50/50 between the two methods. If this isn't possible then whichever group has the smaller budget should have enough to target 300 responses. The test could be conducted over multiple campaigns if necessary to reach this figure.

3. If there are other tests running at the same time, split these evenly between the test groups. For example, if you are testing 2 creatives with a 50/50 split across the whole campaign then the distribution for each targeting group should also be split 50/50 between the creatives.

4. Include a measurement of the halo effect in the post campaign analysis. This is necessary to measure the full impact of word-of-mouth on the campaign, as it includes people who were not targeted directly but who had the message passed to them by someone else. Herdify can provide this analysis for you.

5. Conduct additional analysis of the performance of postcodes based on their scores in any existing model and the Herdify model. This will enable you to identify the biggest opportunities for optimising future campaigns. Herdify can provide this analysis for you.