Direct Mail Spending Grows 5.0% in 2007

NEW YORK—January 22, 2008—In the face of otherwise daunting marketplace challenges—including a substantial postage rate increase, higher raw materials costs and heightened competition from low-cost interactive media—U.S. direct mail spending continued to grow in 2007, climbing 5 percent from 2006 to total $58.4 billion in aggregate investment, according to a white paper released today by Winterberry Group, a leading strategic consulting firm serving the marketing industry.

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 further 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: