Can Value and Outcome Outweigh Direct Mail Cost?

BY Kathy Crosett
directmailcost

Have your clients been complaining about direct mail cost? If so, you may need to show them the value of this marketing format. In 2024, businesses spent an estimated $37.3 billion on direct mail. A close look at how they use the format, and their ROI, explains why they use direct mail.

The Challenges of Direct Mail

It’s no secret that a direct mail (DM) campaign can be pricey. As postage costs rise, marketers are seeking more efficient ways to produce direct mail. A Winterberry study, sponsored by the U.S. postal service and Canon, among others, acknowledges that the 2024 DM spending levels increased slightly over the previous year.

The following factors played a role in this increased spending:

  • Higher overall marketing spending 36%
  • The cost of competitive media channels 34%
  • Better data 29%
  • More focus on customer loyalty 29%
  • Better targeting capability 29%

While direct mail cost is climbing, marketers see continued benefits to using this channel. In 2025, up to 60% of marketers will allocate between 1% and 10% more funding to direct mail.

The Shift to Value

The increased spending on direct mail does not mean that consumers will see more catalogs and offers in their mailboxes. In the past two years, the volume of marketing mail has dropped from 67.1 billion to 57.5 billion pieces.

The trend indicates that marketers are taking a “value” approach. Specifically, they are being more selective about who they target with their DM pieces.

The Winterberry study concludes that the era of big data works to marketers’ advantage. Your clients want the ability to send their direct mail only to the consumers who are likely to respond.

You can help with this task. Using a tool like AdMall, you can show clients, by zip code, where consumers live. You can select areas by demographic factors like age, gender, and income. Additional AdMall intelligence focuses on psychographic factors. For example, you can help clients identify zip codes by the average age of homes or by resident occupation.

Performance Emphasis

Marketers are eager to sign up new customers or boost revenue by a specific amount. Digital channels have been delivering the results and kind of data marketers need to track their campaigns. To reach their DM goals, businesses have been increasing their performance marketing focus, both online and offline.

As an offline channel, DM delivers. Here are the three channels that organizations rely on for achieving their performance marketing goals:

  • Online display advertising 61%
  • Paid social 55%
  • Direct mail 47%

Focus on Cost and Efficiencies

Postage, as a now large component of direct mail campaigns, will be increasing again in 2025. And overall direct mail cost will continue to be a concern for your clients. However, analysts indicate that marketers will have additional areas of focus in the new year.

They intend to reduce friction and inefficiencies between departments that manage direct mail and those that oversee digital marketing. 43% of marketers also intend to release campaigns that connect direct mail with messaging in digital formats. 

Personalization

Your clients should know that personalization makes a difference. Around 69% of marketers personalize direct mail content. ValPak reports that personalizing direct mail pieces can help businesses increase revenue by as much as 40%.

Marketers can tap into other ways to attract attention with DM. Nearly half, 49%, use unique formats in direct mail. An envelope with unusual dimensions gets noticed, for example.

While direct mail cost will be scrutinized, your accounts can make this format work for them in new ways this year.

Image by RDNE Stock Project on Pexels.


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