Direct Mail May Fall 10% This Year

NEW YORK Add direct mail to the list of analog media being crushed by the Great Recession.
– Todd Wasserman

The Direct Marketing Association originally predicted that direct mail volume would only fall 1 percent this year, but the organization has revised that to as much as 10 percent. “This was mainly driven by the combination of a number of factors including the consumer credit crisis, the mortgage crisis and the overall economic crisis, as well as marketers exploring new ways of integrating across different channels,” said Ramesh Lakshmi-Ratan, the DMA’s executive vice president and chief operating officer.

One of the biggest victims of the reduction of direct mail volume has been the U.S. Post Office. For the quarter that ended June 30, the USPS lost $2.4 billion. As a result, the federal agency has instituted cost-saving measures like limiting workers’ hours and is trying to convince Congress to follow other countries’ leads and deliver five days a week instead of six.

USPS representative Yvonne Yoerger said that the slackened volume of direct mail has been a factor, but so has a longer-term trend of “electronic diversion” — the use of digital media like e-mail and electronic bill payment instead of paper letters. “That’s an ongoing trend that we’ve been aware of,” she said. “Some of the mail volume will not come back even after the economy recovers.”

The direct mail industry is grappling with the same issues. A recent DMA survey showed a distinct trend towards digital media at the expense of direct mail, Lakshmi-Ratan said. Eighty-one percent of respondents expect to increase their use of e-mail for marketing purposes. Other digital media like online video, search engine marketing and mobile also scored high. “As the attractive, popular, low-cost alternatives, the future will see all these channels grow further and give way to even more exciting possibilities like viral marketing and trigger marketing,” said Lakshmi-Ratan.

The USPS doesn’t break out direct mail volume, but Yoerger said standard mail accounts for 83 percent of advertising mail. Standard mail revenues fell $849 million or 17.7 percent in the last quarter as volume fell 4.4 billion pieces or 18.8 percent compared to the same period in 2008.