It's a waste of trees anyway
A report from research firm Borrell Associates finds direct mail is being negatively affected by online efforts, specifically email.
"Direct mail has begun spiraling into what we believe is a precipitous decline from which it will never fully recover," stated Borrell, which projects a 39% decline in direct mail efforts over the next five years: $49.7 billion in annual ad spend in '08, to $29.8 billion by the end of '13.
This would relegate direct mail from the primary beneficiary of ad revenue to the fourth, falling behind internet, broadcast TV and newspapers.
Email is the primary driver behind the internet's aggressive stance against direct mail. "[Last year, email advertising quietly moved to the No. 1 online ad category spot, surpassing all other forms of interactive advertising," Borrell wrote. In '08, advertisers spent $12.1 billion on email marketing — more than what they spent on search ads or display/banner ads, MediaPost reports.
Valassis, one of the largest direct mail firms in the nation, began to register the decline in its business over the first quarter of 2009, when its "shared mail" revenue plummeted 12.7% year over year. Meanwhile, other direct mailers, IWCO Direct and Transcontinental USA, are conducting layoffs and shutting down brick-and-mortar locations.
"We're expecting local e-mail advertising to grow from $848 million in 2008, to $2 billion in 2013, as more small businesses abandon direct mail couponing and promotional orders and turn to a more measurable and less costly medium, e-mail."
But while email is a relatively inexpensive market to step into, Borrell cautions against leaping into the pool without preparation. "Managing large e-mail marketing campaigns require database marketing expertise, a savvy sales force, adequate e-mail management software, familiarity with the rules and regulations and a lot of patience."
Online coupons were also credited with expediting email's demise. A report by PriceGrabber noted 53% of online Americans say the recession compels them to spend more time on the internet, where they research purchases to suppress impulse buying and shopping for deals that do not include shipping fees or sales tax.
According to Platform-A and Information retailers, 90 million US consumers (78% of retail shoppers) currently use newspaper coupons, and 40 million (40% of shoppers) say they are likely to use coupons accessed online.
The youngest market segments are the most receptive to online coupon offers, with 51% of 18-24-year-old shoppers indicating they would be very likely to use coupons presented to them online.
8% of US adults now claim to use coupons delivered via email or the 'net at large, Borrell observes.
