Direct Mail Marketers Predict Few 2010 Bright Spots
By the time 2009 ends, spending on direct mail marketing will total $43.7 billion. That dollar amount marks a 16.8% decline from 2008 levels and the third year of steady drops in the industry. The good news is that direct mail spending should stabilize and remain at $43.7 billion in 2010.
Direct mail is one component of the larger direct marketing industry which expects to see spending of $149.9 billion in 2009. The Winterberry Group predicts industry revenues to climb to $152.6 billion in 2010 and to break out as follows (The expected 2009 spending appears in parentheses. All figures are in billions):
- Insert media $0.8 ($0.8)
- Direct response print $15.0 ($15.6)
- Direct TV broadcast $23.6 ($22.8)
- Digital $27.4 ($25.2)
- Direct mail $43.7 ($43.7)
- Teleservices $39.4 ($39.4)
- Other $2.6 (2.4%)
A quick glance at these figures verifies the scenario that has played out across the rest of traditional media businesses – serious growth will occur primarily in the digital arena. Direct mail will drop from 29.2% of total direct marketing spending in 2009 to 28.6% in 2010 according to Winterberry Group projections.
Direct mail has been hard hit by a drop in financial services. The growth sectors in 2009 have included:
- Insurance 2.5%
- Telecommunications firms 13.1%
- Travel 11.3%
In 2010, Winterberry Group expects financial services, auto and retail to improve. Looking forward, marketers will try to reduce costs when using direct mail. Analysts expect businesses to use a more targeted, less mass mailing approach, less expensive paper, and smaller formats. But they caution that the shift to other formats is systemic rather than cyclical.[Sources: Levey, Richard. Direct Mail Fades, Direct, March 2009; Levey, Richard. DM Ad Spending Ticks Up, Direct, October 2009; Thought Leadership Series, DMA 09, Winterberry Group, October 2009]