Direct Mail Spending Positioned for 6.8% Average Annual Growth Through 2009
NEW YORK CITY—Decenber 14, 2006—Despite rising postal rates, higher raw materials costs and the advent of numerous alternative channels, marketers continue to seek out the return on investment benefits of direct mail—spending $60.6 billion on the channel in 2006—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 and the Impact on Production Service Providers 2006, is the New York-based consulting firm’s third annual study of the direct mail production sector. Based upon feedback provided through hundreds of interviews with executives from throughout the direct mail industry, it explores macro trends affecting mailers and service providers, as well as unique developments specific to one or more vertical markets.
Despite murky economic conditions and the rise of several competitive “below-the-line” marketing channels, Winterberry Group forecasts continued growth in direct mail through the 2009 timeframe. The report concludes: “The looming postal rate increase, the price of consumables and the reallocation of marketing budgets to interactive channels constitute major challenges for marketers and providers alike. However, as the multichannel mentality continues to gain ground among ROI-focused marketers, we expect solid, if not robust, growth in direct mail spending to carry production providers through 2007.”
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 2007. The macro trends include:
• Complex, high-volume multichannel campaigns become the industry standard, driven by enhanced marketing database segmentation tools and widespread CRM adoption
• Forthcoming postal rate increase, combined with new delivery point validation regulations, drive the need for advanced data hygiene and postal optimization services
• Strategy and creative service providers move to integrate analytics and consumer targeting services with their existing portfolios, in order to counteract the threat of service commoditization in the agency space.