Will the Direct Mail industry not follow the same life and death cycle (obsolescence) trajectory its cousins in the Newspaper industry are presently grappling with?
Has print as an advertising medium not peaked?
If a report released today is any indication of future of direct mail marketing – then the answer is: Yes.
Few media if any who have seen their sales contract since the birth of the internet have also been fortunate enough to see their sales reach new highs let alone return to their historical norms after shrinking.
The same will hold true for the Direct Mail industry.
As with newspapers, when marketers’ dollars are ultimately redeployed they will be done so within media that meets marketers ever exacting needs for measurably higher returns on investment.
Absent some type of innovation in buyer audience targeting and delivery – direct mail like its newsprint cousin; as an advertising medium – has officially reached its peak.
Print – albeit the ultimate form of personalized communication – simply has too many inexpensive digital competitors willing to carry the same advertising message for 1/10 the cost.
When marketing dollars do return they will go where they have the greatest probability of earning a return on their investment – online.
According to a new report from the Winterbury Group via eMarketer:
For the first time since direct mail began to be tracked in 1945, figures show that both direct mail spending and volume declined sharply in 2008.
According to “A Channel in Transformation: Vertical Market Trends in Direct Mail 2009,” from the Winterberry Group, US direct mail spending fell nearly 3% last year.
Spending dropped from $58.4 billion in 2007 to $56.7 billion in 2008.
Direct Mail Drop
Winterberry also projects that direct mail spending will fall another 8% to 9% this year.
Additionally, Mintel Comperemedia found that the volume of direct mail among the leading vertical industries fell an average of 12.1% in 2008.
Direct Mail Growth
From Mintel Comperemedia:
“Direct mail volumes declined dramatically—even more precipitously than the falloff in spending, in fact—as mailers sought to integrate more precise targeting methodologies, production efficiencies and other value focused initiatives in an attempt to cut costs and preserve the economic return of their mail programs,” Winterberry analysts wrote in the report. “Direct mail has seen its influence as a high-volume, mass-oriented response driver all but vanish.”
Reasons for the drop in direct mail were rising costs in postage, labor and production while the financial services industry crisis also contributed to the contractions in both volume mailed and the amount spent on direct mail.
Increased postage, labor and production costs compared with near frictionless digital delivery and its lower labor and production costs will continue to make digital media marketing and advertising the choice of cost and performance conscious marketers over direct mail.
… which are the reasons why Direct Mail Marketing has peaked.
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