Decline in Direct Mail Spending: Silver Lining in a Dark Cloud?

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The Winterberry Group recently published a research study on trends in direct mail. The study found that direct mail spending in the U.S. declined by 3% in 2008 and volumes declined dramatically by about 4.5 overall, 12% in some verticals.

This is unprecedented, after more than 30 years of steadily increasing streams of direct mail. What is more, the study projects that volume will decrease a further 10 – 15% this year. So is this the death knell for direct mail or will growth rates resume once the economy bounces back? The study actually predicts that direct mail will not resume its high growth rates, because the current tough economic conditions have forced direct marketers to innovate by focusing on more targeted approaches, less expensive online channels, etc.

I agree with this. DM may recover enough to have positive rates of growth, but the high rates of growth are a thing of the past. The good news of course, is that some trees will gain a fresh lease on life. Statistical modelers will see increased demand for their services. Consumers will, hopefully, see a higher proportion of messages that are meaningful and relevant to their needs and wants. Online media will benefit. The Postal Service may take a hit in revenues – which will probably qualify them for a bailout. Best of all, direct marketers may be forced to get a little smarter and innovative. Not a bad thing. This economic cloud may have a silver lining, after all!

Seriously, despite the significant advances in customer information technology, data mining, predictive analytics and interactive marketing, too many direct marketers for too long have relied on carpet bombing their prospects in order to elicit ever lower response rates. The financial services industry, credit card companies in particular, have been the worst offenders, notwithstanding armies of modelers in their ranks. Catalogers have been a close second. If this downturn helps them learn more discipline, their shareholders and their customers will thank them.

Naras Eechambadi, Ph.D
Dr. Naras Eechambadi is the founder and CEO of Quaero, a world-class data management and analytics platform empowering enterprises to integrate, discover and democratize their customer data. He is a life-long technologist and entrepreneur with over three decades in the software products and services industry. He has been awarded numerous distinctions as both a marketing executive and entrepreneur. Naras is also the author of a critically acclaimed book, High Performance Marketing: Bringing Method to the Madness of Marketing.

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