The future of direct mail is threatened by the soaring popularity of e-mail marketing combined with problems facing print and mail delivery, according to a new forecast from Borrell Associates.
Advertising revenue from direct mail is expected to plunge 39%, from $49.7 billion in annual spending in 2008 to $29.8 billion, by the end of 2013, the report added. If the forecast turns out to be right, direct mail would fall from the No. 1 position for ad revenue to No. 4, behind the Internet, broadcast TV and newspapers, it continued.
Researchers think the decline will come as a result of e-mail marketing gaining favor, particularly with small companies, along with a number of problems related to snail mail. Fewer paper catalogs are being delivered and financial services companies are cutting down on credit card offers. At the same time, coupons are being delivered more frequently through e-mail, the Web and in stores. The US Postal Service also experienced unprecedented declines in first-class mail, which carries the freight for lower-priced advertising mail. Furthermore, cutting the frequency of snail mail delivery and increasing postage rates would spell more trouble for direct mail, according to Borrell’s report.
“Put all those things together and it’s a formula for disaster for the Postal Service and direct mailers,” said Kip Cassino, VP of research at Borrell.