In 1872, Aaron Montgomery Ward had a burst of inspiration. In the tradition of the general store, he printed a single sheet featuring 163 items and mailed it to potential customers, allowing recipients to receive what they needed through the mail and with a discount, rather than paying higher prices at local stores with lower inventories. It was the beginning of an onslaught of direct marketing that has continued for more than 100 years.
Throughout the 20th century, many other innovators followed in Ward’s wake. Sears-Roebuck took the mail order idea a step further, offering the Sears Modern Home, available from 1908 through 1940 (during which period the company sold more than 100,000 models). In less consumer-oriented and more modern pursuits, political strategist Karl Rove spent most of his career measuring and harnessing the power of direct mail to market political spin that would strengthen the U.S. conservative voter base.
Whether a household’s mailbox revealed a Sears Modern Home offer, political promise or something else entirely, direct mail marketing has come a long way, and faces a changing market year in and year out. Even with the Web and near-ubiquitous use of e-mail for free advertising and promotions outshining Ward’s ingenuity, the tried-and-true medium has nestled into a new, powerful niche.
According to a recent Infotrends study called “The Future of Mail 2006: Direct Mail, Transaction and ‘Transpromotional’ Documents,” 2005 saw the mailing of 114 billion North American direct mail pieces. And, according to United States Postal Service (USPS) senior public relations specialist Joanne Veto, “Direct or advertising mail (what we call standard mail) is outpacing first class mail. It eclipsed first class mail for the first time in the history of the postal service during fiscal year 2006.”
The rarity of snail mail in comparison to frequent online advertisements and spam means certain segments of the population—particularly the ever-wired Gen X and Gen Y demographic groups—view direct mail pieces as novel. An independent study conducted for the USPS reported 70 percent of this target market is more likely to read mailed credit card offers awaiting them at home than those overstuffing their virtual mailboxes.
It’s not simply wired generations who are attentive to direct mail, though. “The Envelope Manufacturers Association Foundation released [2006 survey
results] that revealed 78 percent of Americans preferred to receive bills through the mail, and 75 percent said they were more likely to pay attention to direct mail—which was three times more than unsolicited e-mail, Internet pop-up ads, telemarketing calls, door-to-door marketing or mobile phone messages combined,” stressed Mike Monahan, executive vice president of Pitney Bowes and president of Pitney Bowes Global Mailing Solutions, Stamford, Conn.
Monahan went on to suggest the new and old can work for each other. “[Businesses] need to embrace new technologies and channels, not view them as threats,” he said. “What has been great for the direct mail industry is the fact that the emergence of the Internet has actually driven mail volume up. E-commerce alone has had a profound impact on the overall mail stream. For instance, a consumer gets a catalog through the mail and orders some merchandise online. That merchandise is fulfilled through the mail, and so on. Mail and the Internet have formed a perfect marriage.”
Monahan’s comments fall right in line with the USPS, which also stated that 41 percent of Americans shop both by catalog and the Internet. The investment in producing and using direct mail campaigns—even with an e-mail campaign costing much less—is still a profitable, effective marketing and advertising avenue, keeping mail in step with the digital age.
Some of the tandem success of Web-related sales and direct mail comes from changes in public policy over the last ten years. Consumers’ privacy protection measures, such as the inception of 2003’s National Do Not Call Registry and the spam filters that have become requisite features for virtually every e-mail Web site or software program, have made direct mail even more effective. Monahan pointed to the 2007 prediction of 7.5 percent growth in advertising spending on direct mail, which will bring spending totals to $64.4 billion over the next year. “Internet ad spending is estimated to grow 15 percent to reach $10.7 billion, but the Universal McCann 2007 Forecast predicts other media, including television, radio, magazines and newspapers will all perform lower than direct mail and Internet [spending],” Monahan added.
But, policy changes and protections aren’t the only factors affecting direct mail’s future. Rick Miller, senior vice president of VMark’s Creative Automation company in Hillside, Illinois, said changes in how to target customers effectively have influenced its business, as well. “In Creative Automation’s early years, true ‘database marketing’ and segmentation was in its infancy. As the ability to identify profitable customer and prospect segments has evolved, so has the impact on direct mail. Smaller print groups with more focused and targeted messages have resulted from the advancements in data management technology,” he said.
Having been in business since 1969, Creative Automation offers services including data processing, database management, forms printing, personalization, finishing and mailing services for the finance, retail, insurance, hi-tech, catalog, publishing and nonprofit industries. Formats are a sign of the times, said Miller, and variations on the years-long standard #10 envelope is one of them. “Today, there is a wide variety of formats manufacturers need to be able to produce, including double and triple postcards, self-mailers [and] integrated card and label formats,” Miller added.
With new formats come the influences changing technologies have had on all businesses—which, even in the case of print-based businesses like direct mail, don’t have to be adverse. After noting the technological changes enhancing direct mail business every year, Miller suggested the key to staying competitive in all areas of direct mail is to invest in new manufacturing technologies.
“As mentioned previously, it starts with the data,” he continued, “and through data management and business intelligence advancements, this enhanced information has helped drive dramatic changes in offer and package designs. Technological advancements from prepress to the press room have also been significant. Direct-to-plate [and] ever-changing press functionality and features are just a few of the areas that have greatly affected the direct mail industry.”
Technology has also impacted staff sizes for customers in all industries, and manufacturers have adjusted to new, multitasking work environments by offering one-stop-shop direct mail services. “In many cases, it is related to what we often refer to as ‘vendor management,’” Miller explained. “As customers, purchasing and marketing departments have gone through consolidation over the years [and] the result has been more responsibility for each employee. Companies such as Creative Automation need to offer these organizations the time-saving opportunity to work with one company for multiple services.”
While online industries continue to threaten traditional business practices, neither rain nor sleet nor e-mail marketing has kept direct mail from swift, effective response.
Related story: State of the Industry 2007