After a relatively swift end to combat in Iraq, list professionals are taking stock of the conservative spring mailing season while finding reasons to be hopeful about the upcoming fall season.
“For the first time in a couple of years it really looks like things could turn the corner,” said Richard Vergara, partner at LDS Group Inc., New York, a new list brokerage he co-founded in December with Jeff Kobil. “I don't think we're out of the woods yet, but we're starting to see a glimmer of hope.”
With a clientele of mainly publishers, Vergara said an informal poll of some mailers that were mostly LDS Group clients at the end of April showed that spring results were fairly strong despite the war.
Similarly, Chris Paradysz, CEO of list brokerage ParadyszMatera, New York, said that fundraising and publishing response was up for spring with news-oriented publications doing especially well.
“I would say that in general our research here supports that consumer confidence drives response, and we're seeing that exaggerated now,” Paradysz said. “March results in general have been substantially up.”
He also said that catalogs in general were faring well despite the turbulent economy and the war.
“It supports the direct marketing basics that when people stay home, catalogs do well,” he added.
Meanwhile, another list professional had some clients delay spring drops because of the war with favorable results.
“I had a couple of mailers hold up March and April campaigns when the war was looming,” said Dave Nelson, senior vice president on the brokerage side at Walter Karl Inc., a Donnelley Company, Pearl River, NY. “As we won it they dropped their mail, and things seem to be doing fine.”
Still, though business-to-business mailers and high-end consumer mailers were not really affected by the war, the mid- to lower-ticket offers were somewhat affected.
“You had about a million military families affected by the war so you have to figure that those responses would be suppressed,” Nelson said. “More upscale offers have less connection with the military and were less affected.”
Of course, all spring results need to be tempered by the fact that plans for spring were conservative to begin with because of the economy.
“I think that when people say they are at or over budget, you have to keep in mind that their budgets weren't exactly wildly aggressive,” Vergara said. “It's much easier to make budget when your expectations aren't that high.”
Still, indications are that the fall will be a more aggressive mailing season.
“Most of our mailers indicated that they would be mailing more aggressively this year than last year,” Vergara said. “Mailers want to increase their testing for fall, and though it's hard to find new tests we will see mailers doing retests and maximizing selections.”
Paradysz said the single biggest reason for optimism about the fall is the reprieve from another postage rate increase.
“We have been given the greatest gift that our industry has ever had, which is a deferment of the postal increase,” he said. “It's the first time in a long time that at this time of year we're not talking about how we're going to squeeze costs out to be able to afford the cost of the postal increase.”
According to Paradysz, the industry is poised for some expansion.
“I think we're going to see modest growth and investment in direct marketing,” he said.
ParadyszMatera is working on 10 new magazines, all set to launch within nine months, as well as a few catalog launches.
Though he would not share details, Paradysz said it's a positive sign.
“It's the first time we've seen that in awhile,” he said, “and I think it's an indicator that people believe that this is the state of the world and business must go on.”