Direct Mail Spending in the U.S. Grew 5.0% In 2007

The white paper, entitled Vertical Market Trends in Direct Mail 2008, is the New York-based consulting firm’s fourth annual study of the direct mail sector, inclusive of both mailers and the production service providers who support their campaigns. Based upon feedback provided through hundreds of interviews with executives from throughout the industry, it explores macro trends affecting mailers and service providers, unique production sector issues as well as developments specific to one or more vertical markets.

According to Winterberry Group, direct mail growth continues to outpace that of both “above-the-line” advertising and virtually all other non-interactive marketing media. But that growth slowed dramatically in 2007 from the previous year, when marketers increased their year-over-year investment in direct mail by over 7 percent. The report concludes: “With [the postage rate] increase now a distant memory and with the threat of future such hikes mitigated by postal reform legislation that sets an effective cap on new postage increases, the focus for 2008 will shift to advancing the role of direct mail as a component of the multichannel marketing mix. Expect marketers to continue turning to new applications (including analytical modeling, event triggering, multichannel coordination and advanced postal

optimization initiatives) in order to reinforce their presence in the mailbox and complement other on- and offline marketing approaches.”

The white paper outlines three macro trends and five vertical market trends which should play significant roles in shaping the direction of direct mail use in 2008. The macro trends include:

1.) Heightened political and societal pressure to “go green” will require both marketers and service providers to adopt and publicize significant environmentally-friendly process enhancements competitive advantage will accrue to those companies that are able to substantiate their efforts with demonstrated positive impact.

2.) Potential legislative threats, including “do-not-mail,” privacy protection and data-use restriction proposals, will increasingly impact strategic campaign execution and influence broader direct marketing spending decisions.

3.) Logistics and raw material costs will continue to impact budget allocation and drive marketers to focus on process efficiency.

“2007 presented direct mail marketers with an unprecedented set of challenges, ranging from new postage rates to higher logistics costs to a renewed focus on environmentally-friendly production methods,” said Bruce Biegel, Winterberry Group’s senior managing director. “While these issues will continue to play a role in campaign execution this year, we expect that many marketers and service providers will respond by redoubling their focus on efficient data utilization, postal optimization and responsible ‘green’ citizenship.”