Is Direct Mail Marketing Dead?
To be sure, cost per thousand is rising, response rates are dropping, lists are suffering from fatigue and the universe of available names that you can mail profitably is slipping. At the same time, the Internet beckons to direct marketers with the lure of millions of online prospects reachable in an instant, with no production costs or turnaround time, and at virtually zero cost per thousand.
Why then do so many traditional direct marketers, me included, think that even in this electronic age, paper direct mail will continue as a major marketing tool well into the new millennium? Simply because every time pundits predicted the demise of the traditional printed media in the past, it didn't happen. When advocates of CD ROMs, software, the Internet and electronic publishing proclaim in loud voices that printed direct mail will soon be dead, I get the feeling of moo ja vu -- meaning I've heard this bull before.
Futurists have been predicting the death of traditional media for decades. Yet it never comes to pass. Consider Thomas Edison, for example. When Thomas Edison invented the phonograph in 1876, he did it to bring music into the average American home. In his early model, the records were made of cylinders coated with tinfoil, onto which the vibrations from sound waves were impressed with a needle.
Once he got a working model, Edison saw his invention could be used to carry the spoken word as well as music. He publicly proclaimed that the book-on-record (precursor of today's audio book industry) was a far superior learning tool to the printed page and that by the end of the millennium, all college students would be learning by listening to recorded texts, and paper textbooks would be obsolete. In 1996, however, textbook sales in the U.S. grossed over $4 billion.
In 1964, when Sony introduced the CV-2000, the first home VCR, technologists proclaimed that the new video cassettes heralded the death of the printed word. Futurist and science fiction author Isaac Asimov responded with an essay describing what he called "the ultimate cassette."
Such a cassette, said Asimov, would be lightweight and portable. It would not require a player or need to be plugged into a power supply. It could be searched to look up specific information or access particular sections. And its per unit cost should be low. At the end of the essay, he revealed that he was, in fact, describing a book to demonstrate that with all these advantages, print media might be supplemented by -- but never replaced with -- electronic media.
On the other hand, a recent Roper poll shows that 69 percent of Americans prefer to get their news from television vs. only 37 percent from newspapers -- indicating that we are indeed becoming more oriented toward electronic media and less toward print. More evidence: the average American household watches television 50 hours a week. And from 1980 to 1995, the number of daily newspapers in America dropped from 1,743 to 1,548 -- a decline of 11 percent.
Newspaper columnist Charles Krauthammer predicts that print will all but vanish in the next century. "The Gutenberg age will end with the 20th century," said Krauthammer. "First to go will be the newspaper. Then the magazine. Then the book. Their paper versions, that is. They will all find a new life on screen, on disk, online. What is dying is printing, not writing. It is our way of transmitting words -- not words themselves -- that is obsolete."
Are consumers proving Krauthammer right? "The appearance of new means of information does not destroy earlier ones; it frees them from one kind of constraint or another," said writer Umberto Eco, noting that painting and drawing did not die with the invention of photography and cinema.
Direct Marketing Association economic forecasts paint a bright picture for traditional direct mail -- at least in the short-term future. In 1999, expenditures for traditional direct mail advertising in the United States will be $41.8 billion vs. only $1.1 billion for interactive advertising.
By 2003, annual expenditures in the United States will increase to $52.7 billion for direct mail and $5.27 billion for interactive advertising. That means direct mail marketers will outspend Internet marketers by a ratio of 10 to 1.
At the same time, $5.27 billion spent on interactive advertising means a big leap in the usage of Internet direct mail. This increased Internet direct mail volume may actually relieve some of the fatigue from overuse that traditional lists are currently suffering.
What's more, there are some chinks even in the armor of the shining marketing knight called the Internet. To begin with, the model for e-mail marketing is permission-based, whereas traditional direct marketing does not currently require permission to mail. This means the Internet does not give you the kind of universe availability that traditional mailing lists do.
And with millions of Web sites and countless e-mail messages being sent daily, recipients are already on overload. As the number of people using the Internet increases, the situation will only get worse; more than 4 trillion e-mail messages were sent last year. This may decrease response rates while causing more users to begin opting out of receiving further e-mail.
Marketers know that form follows function and that the medium should fit the message and the Internet, while perfect for some offers, is less than ideal for others. The Internet is a great medium for software marketers, who can advertise, take orders and actually deliver their products completely online.
Graphics-intensive marketing, on the other hand, requires bandwidth and speed the current Internet infrastructure lacks. That's probably why Victoria's Secret mails me a catalog every other week or so, even though they have an active Web site complete with e-commerce. For example, when Victoria broadcast its first live online fashion show in February 1999, the extraordinary volume of traffic it generated created technical problems that actually prevented users from seeing the show.
Does this mean I don't consider the Internet as a force to be reckoned with? On the contrary, IBM predicts Internet commerce to reach $400 billion annually by 2002. But I see the Internet and traditional direct mail as more complementary than competitive.
Yes, there will be mailings that don't happen because the direct marketer opts for Internet direct mail instead. But the fact is that -- just like some catalog customers prefer an order form and others prefer a toll-free number -- some consumers prefer the Internet and others prefer a piece of paper.
Add the Internet to your marketing arsenal? Certainly. Tighten the focus of paper direct mail, catalogs and print ads to improve your return on investment? Yes. But cut them off instantly and go 100 percent electronic? Do so only at your peril -- and the risk of having many of your customers go somewhere else.
Stevan Roberts is president of Edith Roman Associates Inc., Pearl River, NY. His e-mail address is firstname.lastname@example.org.