Coen: Direct Mail Spending to Grow 8.5% in 2005

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U.S. direct mail spending is forecast to rise 8.5 percent this year to $56.6 billion, according to noted researcher Robert J. Coen, senior vice president and director of forecasting with Universal McCann.


In his June 2005 Insider's Report released last month, Coen also said direct mail spending grew 8.5 percent in the first quarter of 2005 as marketers sought alternatives to their former telemarketing programs.


"Restrictions on telemarketing calls have generated additional piece volume in the class of mail used mainly for direct response," he said in the report.


Regular Automation Presort Standard Mail increased 5.9 percent between 2004 and 2005 in the January to March timeframe, from 11.7 billion pieces to 12.4 billion. Regular Enhanced Carrier Route Standard Mail rose 3.8 percent, from 7.2 billion pieces to 7.5 billion, his report said.


In later quarters of the year, Coen said, "volume growth is expected to be further stimulated by extra prospecting mailings preceding the rate increases scheduled to take place in 2006."


Coen also reported high single-digit spending gains in the first quarter for magazine advertising (9.5 percent) and Internet advertising (8.2 percent). These Internet ad expenditures do not include spending for search-related links or other transaction facilitating systems, the report said.


Declines in spending were reported for national spot TV advertising (5.8 percent) and newspaper advertising (0.6 percent).


Along with the projected increase in direct mail ad spending, Coen said spending for Internet advertising is expected to climb 15 percent to $7.9 billion for all of 2005. Other notable categories expected to grow this year are cable TV advertising (12 percent to $18.4 billion), magazine advertising (7.5 percent to $13.2 billion) and newspaper advertising (5 percent to $8 billion.)


Coen said that total U.S. ad spending is expected to increase 5.7 percent this year to $278.8 billion. In December, however, Coen had projected total annual growth of 6.4 percent.


Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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