Who’s Got MAIL?

Posted on by Chief Marketer Staff

Though there’s no ranking of direct mailers by volume, the big ones appear to be very traditional DM companies

It’s the perfect question for a bar bet among direct marketers: Which are the biggest direct mailers by volume of mail? Is the list the same as it was 10 years ago, and will it be the same in another 10 years?

Picked your answers? Good. Now try to validate them independently.

As it turns out, the big mailers are the traditional ones – stampsheet companies, catalogers, financial serfices firms and publishers. But our evidence is hardly scientific.

The Direct Marketing Association can’t help you – that’s one set of statistics the DMA doesn’t keep. And the U.S. Postal Service is only of limited help.

However, the USPS does provide a list of the largest direct mailers by volume: Advo, AT&T, Capital One, CTC Distribution Service, Output Technology Solutions, Sears, Time Warner, R.R. Donnelley and Harte-Hanks. But the list doesn’t distinguish between vendors like Donnelley and Harte-Hanks, which mail for their clients, and actual marketing companies like Time Warner.

And the USPS refuses to release the number of pieces each company mailed or even to rank them in order, saying such details are proprietary.

The refusal is all the more curious since the Postal Bulletin – issued every other week by the USPS – includes a Mail Alert, a list of mailings of 1 million pieces or more over the next two or three weeks. The list includes the size of a specific mailing.

For example, Postal Bulletin 22003 (July 29, 1999) lists 17 mailings with requested delivery dates between Aug. 2 and Aug. 26. Service Merchandise planned to mail 6 million Standard A back-to-school flyers nationwide, while Eddie Bauer’s August home remail was poised to send a measly 1 million Standard A catalogs.

Every Mail Alert is organized by mailing date. Each of J.C. Penney’s six mailings gets a separate mention. Individual mailings may range from 1.4 million to 2.7 million, but Penney’s total for that three-week period is a healthy 12.3 million Standard A flats, postcards and catalogs. Even Eddie Bauer came in at a solid 4.1 million pieces, and Sears planned 8.5 million pieces.

But why doesn’t the USPS add up all the Penney mailings, say, if only to figure out who the biggest mailers are?

“The postal service is not well known for knowing who its customers are,” says Gene Del Polito, president of the Advertising Mail Marketing Association. “It does not understand that the mailers are its customers.”

According to Del Polito, the total volume of the two forms of mail used by direct mailers – first class and Standard A – was around 198 billion pieces in 1998. Of this, 52% was assumed to be direct marketing of one sort or another, while the 8.2 billion pieces of Standard A mail was probably all DM.

Supplementing those assumptions are the mail-flow diaries kept at home by consumers for the USPS. Like A.C. Nielsen ratings for television, the diaries give a gross sense of the percentages of different types of mail people receive. However, the postal service has not established an analogous mail flow tracking system for business mail.

Del Polito maintains that the big mailers are those one would expect: Advo, American Express, Publishers Clearing House and Time Warner. To that list, he adds insurance and credit card companies in general. AT&T? He’s not sure everything AT&T sends out is direct mail.

But while overall mail volume is going up, paper mail may just be starting to lose some ground to electronic media.

“It’s still going to be a couple of years before the full impact on direct mail is felt,” Del Polito says. “But I see flat mail volume within three years and declining mail volume within five years.”

Mailers like Lands’ End and L.L. Bean already are putting resources into e-commerce, he notes. In addition, more people are paying bills online, and banks are beginning to offer incentives to customers to conduct their banking over the Internet, he continues. Even the U.S. government’s dispensations increasingly are electronic.

“It’s not a stretch,” Del Polito says. “The Atari generation will be the bill payers in a couple of years.

Dan Capell, president of Capell & Associates and publisher of Capell’s Circulation Report, says that Publishers Clearing House and American Family Enterprises each used to send out roughly 200 million pieces a year, but both stampsheet companies have cut back the size of their mailings. Neither company has published numbers for a couple of years, Capell says.

“Mailings soliciting subscriptions are down,” Capell adds. “It’s about 20% of new business now. It was as much as 30% to 35% five years ago.”

However, unlike Del Polito, Capell does not see the Internet replacing direct mail.

“It has not been a significant source for publications at all,” he says. “It may develop into a significant source. But the marketers haven’t arrived. The sites are designed by tech people. The sites need some kind of gimmick or promotional device that has not yet been dreamed of for that to happen.”

Instead, he sees third-party agents replacing some direct mail. And companies like NewSub Services Inc. have gained ground by inserting offers into credit card bills.

And what do list brokers and managers say? Howard Kupfer, senior vice president of Mokrynski & Associates, stresses that “almost all mailings are in the millions. That’s not that big. Hundreds of millions are big.”

Kupfer also points out that the numbers change when the mailings are looked at from the total of the parent company and not the specific division of catalog title.

He cites Victoria’s Secret, J. Jill, Coldwater Creek, J. Crew, Lands’ End, L.L. Bean, Levengers, Lillian Vernon and Foster & Gallagher as the really big mailers among those targeting consumers.

“The big mailers will always be big in relationship to what everyone else is mailing,” Kupfer concludes.

Millard Group president Ben Perez also suggests that, with some exceptions in new segments, the big mailers are the same as they always were.

“I don’t know that it’s changed that dramatically,” Perez says.

And who are the big new mailers? Computer manufacturers and giants like America Online, he claims.

Rosemarie Montroy, business development executive at DMI/ Acxiom, disagrees. “AOL is mailing net files now,” she says. “They’re not as big as they were three years ago.” Stressing that her answers are “relative to how our lists are used,” Montroy suggests Columbia House, Doubleday, Book-of-the-Month Club, Rodale Press, International Masters, Citibank, Reader’s Digest and Time Warner are the big mailers on the consumer side.

Sears, she says, does not send out a lot of direct mail, while Spiegel, which she describes as large and growing, is also more mass market.

On the business side, Montroy says Consolidated Plastic, Skillpath, AMA Paget Thompson, Fred Pryor and Ziff-Davis are big mailers.

She points out that none of the big mailers are mailing as much as they once did.

“A few years ago, the two biggest were American Family Enterprises and Publishers Clearing House,” she says. “They have cut back dramatically due to problems in the sweepstakes market.”

There have been cutbacks in catalog mailings as well, she notes.

“We’ve seen the numbers affected by database marketing with Abacus and SmartBase,” she adds.

Montroy goes on to predict that in the future the impact of the Internet also will reduce the size of mailings.

“Certainly, large mailers like Columbia House, Doubleday and Book-of-the-Month Club are feeling the impact from online businesses like Amazon.com, Barnesandnoble.com and all the other `dot coms,'” she notes.

In contrast, business mailings have not declined as much in Montroy’s experience, although she expects to see falloffs in business mailings soon.

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