STUDY: Direct Mail Spending in '08 Falls 3 Percent

Spending to decline another 8 or 9 percent in '09, according to Winterberry Group.

By Chandra Johnson-Greene
Monday, March 2, 2009

Total U.S. direct mail spending declined by 3 percent to $56.7 million in 2008 and is expected to fall another 8 or 9 percent in 2009, according to a whitepaper released today by strategic consulting firm Winterberry Group.

In “A Channel in Transformation: Vertical Market Trends in Direct Mail 2009",” Winterberry’s fifth annual study of trends in direct mail media, the decline in direct mail spending was also accompanied by a significant cutback in mail volume based on feedback from both mailers and service providers who support direct mail campaigns.

The whitepaper illustrated six developments that have impacted direct mailers across all sectors. According to the chart, publishers have been affected by all six trends:

A rapid drop-off in financial services mail activity (brought on by the crisis in the banking and mortgage sectors) fueled the overall decline in mail spending, according to the whitepaper. Further decay in mail activity is expected to continue through the course of the recession, at which point the direct mail channel will likely emerge as a medium used more for precise targeting than “saturation mailing” as it has been over the last decade.

“A wide variety of new mail applications will continue to emerge,” the report states. “Based largely on deep data and technology underpinnings—and structured to take advantage of direct mail’s unique ability to enable customer acquisition and integrate with other media—these applications have been incubating for several years. The events of the past 18 months have moved them to the forefront, and both marketers and service providers alike would be wise to follow.”

The white paper also outlined three trends that are expected to continue defining the role of direct mail in 2009:

• While direct mail volumes traditionally bounce back after a period of economic stagnation, the magnitude and timing of the current recession are expected to affect the direct mail channel in a long-term, systemic way—effectively ending the prevalence of untargeted, high-volume campaigns.
• The accelerating shift from “mass” to “targeted” direct mail programs has been enabled by an increasingly powerful array of marketing automation technologies, many of which are making their way into the toolsets of marketers both large and small.
• Independent of the effects of the recession, rising postage rates, declining volumes, an increasingly complex array of postal regulations and other threats to delivery efficiency may compromise the viability of the Postal Service as the principal mail delivery channel.