Keep the Faith
I was chatting recently with a colleague, who has teenagers at home, and I was struck by a comment he made as we discussed the woeful state of the economy. “I keep telling my kids, ‘Pay attention. Your grandchildren are going to want to know what it was like to live through these years,’” he said, shaking his head at the historic nature of the times we live in. It is hard to exaggerate just how extraordinary each new day seems. The mortgage crisis in the United States may have provided the spark, but the floor of the world’s economic forest was already jammed with dry tinder: too much debt, too many banks carrying too much risk, too little savings and too many imbalances throughout the global economic system.
The global conflagration underway is the inevitable outcome of these combined forces. Iconic brands have vanished. The financial systems of entire nations have been deeply strained. Millions are unemployed. More than a trillion dollars are flowing from governments worldwide into prostrate banks and insurance companies. For any American under the age of 80, the global severity of this downturn is a totally new and unnerving experience.
Equally unprecedented are the economic implications for the direct mail industry. Banks and credit card companies have long been among the most prolific direct mailers, but have scaled back their operations as the economy has waned. Many other mailers are pulling back as well, evidence that economic conditions are curtailing marketing plans across a wide range of industries.
This development is especially troubling for direct mailers because, unlike previous recessions, the media landscape open to advertisers has vastly expanded their range of choices. During the last severe recession in 1980 to 1982, mail volumes actually grew more than 7 percent. The Internet or mobile marketing in those days didn’t exist to drain away marketing dollars that might otherwise go into mail, or to compete for these dollars when the economy starts to recover.