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Forecasting US Direct Mail Spend in 2010
Date: February, 2010 --
Recently published research by the noted Winterberry Group projects direct mail ad spend in 2010 will be flat at $43.7 billion. Interestingly, this remains still the largest amount spent in the direct and digital ad field, with teleservices at $39.5 billion being second largest. Surprisingly, insert media is projected to increase by 2.4% to $0.8 billion, broadcast direct response will increase 3.8% to $23.6 billion and digital marketing will increase 8.3% to $28.7 billion. Note that even with that 8.3% increase, digital marketing still lags direct mail by nearly $15 billion of annual spend.
As many of us in this industry know well, 2009 saw significant decreases in direct mail spend due to the combination of ill-timed postage rate increases, enormous recessionary pressures, and a shift in choice of marketing channels and reduction ad spend by major mailers, in the financial, automobile, and tech industry.
In 2010, Winterberry predicts that acquisition mailings will start to recover, while client retention mailings will decline. That decline in recovery in upsell and cross sell efforts is, of course, due to migration to the lower-cost alternative of e-mail. Once you have permission to e-mail, the urge is too great to resist. What is not proven, of course, is that customers like it, or will respond, over the long term. Email boxes are packed, and familiarity in the email inbox can breed contempt.
As the recession begins to slowly stabilize and hopefully recede, one can expect that the financial services industry will also begin to rebound accompanied or slightly followed by retail and automobile ad efforts.
As the Winterberry group noted in its review of the state of the direct mail industry in 2008, there has been significant implementation and wider practice of analytics and more sophisticated database management and hygiene, all of which together have permitted more efficient targeting, reductions in undeliverable as addressed mail and has acted as a restraint on volume growth. This change and the implementation of these practices will continue improvement in response rates and ROI's. This, in turn, will draw more and more companies to use this powerful marketing tool.
Lastly, the postal rate freeze promised by the US Postal Service for 2010 will conceivably 'buy back' some volume.
It is true that all of these influences and points say little about consumer behavior and response in 2010. Whether your mail will elicit the response you want will depend on your targeting, creative presentation, and the value proposition you offer. Data Services can help take care of the rest, making sure your data is as clean as possible and your messages cleanly and properly addressed outside and inside.