Direct-Mail Spending Down in 2008 and Still Falling

By Michael Bush

NEW YORK, March 3, 2009, (Advertising Age) — Rising postage rates and fewer solicitations from banks and credit-card companies have conspired to drive down direct mail in 2008.

A new white paper from the Winterberry Group, a strategic-consulting firm, found that direct-mail spending dropped 3% last year, and the falloff will accelerate to 9% in 2009. The drop is even steeper in key categories: Winterberry, citing data from Mintel Comperemedia, said mail volume slid 12.1% last year in industries including telecommunications, insurance, banking, investments, travel/leisure, automotive, technology, credit cards and mortgage and loans.

The Winterberry white paper, called "A Channel in Transformation: Vertical Market Trends in Direct Mail 2009," attributes the declines to the recession, rising postage rates and an increasing preference among marketers for low-cost digital communications. Jonathan Margulies, director of Winterberry Group, said that while the numbers represent a significant drop-off, no one needs to be making funeral arrangements for the direct-mail industry just yet.

Industry Growth/decline in direct-mail volume
Telecommunications 9.6%
Insurance 4.6%
Banking -1.3%
Investments -4.2%
Travel/Leisure -4.7%
Automotive -9.4%
Technology -16.6%
Credit Cards -21.8%
Mortgage and Loans -38.8%
Source: Mintel Comperemedia

Changing, not dying
"Direct mail is not dead or even dying," said Mr. Margulies. "The nature of how people use it is changing fundamentally. And over the long term the dollars and volumes may never come back to the levels we had over the last few years, but there will be sustained and increased marketer attention in the things direct-mail media can do."

As more and more people stop spending and the economic situation worsens, Mr. Margulies believes direct-marketing tactics will and should be the avenues marketers turn to. Generally, direct marketing is seen as very accountable, affording good return on investment. So while direct mail is softening, other direct-marketing avenues, such as data analytics, CRM and e-mail, are expected to remain strong.