R.R. Donnelley Redirects Print Business to E-TailR.R. Donnelley & Sons Co. was disappointed in the second-quarter results for its direct mail business and laid the blame on lagging sweepstakes and credit card solicitation markets.
The commercial and direct marketing print firm only released general second-quarter revenue results, which showed revenues increased 11 percent to $1.39 billion compared to last year's $1.25 billion during the same period.
However, the company said this week it will scale back its direct mail efforts in the sweepstakes and credit card solicitation sectors -- which were once its focus areas for direct mail -- and will place a greater emphasis on Internet retailers. The firm will try to attract new online retail clients with print services for direct mail, catalogs and advertising and will look to expand its relationships with existing online retail clients.
R.R. Donnelley, Chicago, suspects government criticism of the language used by sweepstakes campaigns hurt the market sector.
"The government was worried that the sweepstakes were leaving people with the impression that they had to buy something," said Greg Stoklosa, chief financial officer at R.R. Donnelley. "The scrutiny has hurt the methodology of the industry."
He said the credit card solicitation market has experienced low response rates in recent months because consumers were receiving too many offers. As a result, the saturated market has hurt R.R. Donnelley's direct marketing business.