A recent report by research firm GartnerG2 suggesting that e-mail marketing will threaten direct mail by 2005 is flawed, according to industry observers, because it is comparing two forms of marketing that are not yet on an equal footing.
The report, “E-Mail Savings Threaten a $196.8 Billion Direct Mail Market,” written by GartnerG2 analyst Denise Garcia and summarized in a press release March 19, was released Jan. 23. The report suggests direct mail has peaked and that permission-based e-mail marketing will continue to grow in acceptance.
“Direct mail has reached its peak and will account for less than 50 percent of mail received by U.S. households by 2005, down from 65 percent in 2001,” Garcia wrote. “As e-mail use, familiarity and trust increases, consumers will become more comfortable with accepting advertisements through their computer.”
However, Garcia's report compares two forms of marketing that are not yet equal, said Louis Mastria, director of internal and public affairs for the Direct Marketing Association.
“It's too premature to make the assumption that people can go from direct mail to e-mail,” Mastria said. “E-mail penetration rates are not such that you can do a one-to-one swap. It's comparing apples to oranges.”
Garcia's report noted that opt-in marketing is critical to higher e-mail response rates. She said that traditional response rates to unsolicited e-mail are the same as for direct mail, about 1 percent. With opt-in e-mail, click-through rates average 6 percent to 8 percent.
“Advertisers must begin to incorporate these types of personalized e-mail strategies in conjunction with their traditional direct mail efforts in order to maximize the reach, penetration and effectiveness of their campaigns moving forward,” Garcia said.
Michael Della Penna, vice president of marketing for e-mail marketer Bigfoot Interactive, said this is already happening in some industries, particularly financial services. Many banks are switching from direct mail to e-mail to send monthly statements and notices.
“There are sort of silos within certain industries where we are seeing some shift from direct mail to e-mail, like financial services,” he said. “They are looking at saving postage costs.”
Della Penna said that he does not think e-mail will ever completely replace direct mail as a marketing vehicle.
“One medium is never going to completely replace the other,” he said. “But it shows the possibilities.”
Mastria also noted that e-mail still has a long way to go to compare with direct mail, particularly in visual appeal.
“Without mass broadband penetration, you can't deliver to an e-mail the high quality color that consumers demand, especially for catalogs,” he said. “You can take a catalog to the beach on vacation and still get the full experience of the colorful presentation. That's difficult to do with a laptop, particularly since you would get sand all over it.”