Direct Mail Declines for the First Time
According to recent data released by the Winterberry Group and Mintel Compermedia, direct mail spending and volume declined for the first time in 2008 since it was first tracked in 1945.
Spending on direct mail advertising dropped 2.9 percent in 2008 to $56.7 billion from $58.4 billion in 2007, according to the Winterberry Group.
In 2005, spending increased 7.0 percent, in 2006 spending increased 7.5 percent and in 2006 spending increased 5.0 percent.
As for this year, the Winterberry Group forecasts a further drop of between 8 percent to 9 percent in 2009.
Mintel Comperemedia released figures showing that the average decline in direct mail volume was 12.1 percent.
The industry breakdown reflects the overall downturn of the economy. The mortgage and loans industry saw the largest drop, as its direct mail volume shrank 38.8 percent in 2008, while the credit cards industry saw a decline of 21.8 percent.
Direct mail in the technology category dropped 16.6 percent, as the automotive category declined 9.4 percent.
Travel/leisure declined 4.7 percent, investments declined 4.2 percent, and banking declined 1.3 percent, according to Mintel Comperemedia.
The only two industries that saw increases were telecommunications and insurance, which saw modest boosts of 9.6 percent and 4.6 percent in volume, respectively.
As budgets tighten and marketers look for more cost-effective options, online initiatives will continue to attract more spending dollars. The Internet also happens to be the place where more and more consumers are moving their eyes and buying activities, which brings marketers closer to where the real (potential) action is.
Eighty-seven percent of respondents to a Winterberry survey indicated they were observing bigger demand for digital solutions, including e-mail and search. Search advertising, in particular, has seen growing demand in the recession, while display advertising has seen shrinking demand.
This isn’t to say that direct marketing is dead – $56.7 billion is nothing to scoff at.
But it is likely that this economic downturn has set a new reality in motion, one that is quickly pushing reluctant and slow marketers to test the online waters.
Sources:
http://www.emarketer.com/Article.aspx?id=1006955
