A Look at the State of Direct Mail in 2013 and Beyond

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Marketing professionals are inundated with requests to go digital, move into social media, use email instead of traditional direct mail, and embrace an economy that has moved firmly in the digital direction over the course of the past two decades. At the same time, marketing professionals need to balance digital initiatives with traditional efforts, like direct mail, which are still highly effective. In fact, it is the highly effective nature of direct mail marketing programs that has allowed them to be a mainstay even in 2013, as contextual advertising and social media marketing programs ramp up to levels never before seen in the field of marketing. In this report, we take a look at the present state of direct mail as well as the challenges and opportunities that lie ahead. We discuss how technology is changing direct mail, how the changes that the USPS is making will impact your direct mail initiatives, and more.

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A Look at the State of Direct Mail in 2013 and Beyond

  1. 1. May 2013A Look at the State of Direct Mail in 2013 and Beyond
  2. 2. A Look at the State of Direct Mail in 2013 and Beyond, Copyright ©, All Rights Reserved 1The State of Direct Mail Promotions in 2013The marketing profession has become one of the most quickly evolving positions at anybusiness, with professionals inundated with requests to go digital, move into socialmedia, use email instead of traditional direct mail, and embrace an economy that hasmoved firmly in the digital direction over the course of the past two decades. At thesame time, marketing professionals need to balance digital initiatives with traditionalefforts, like direct mail, which are still highly effective. In fact, it is the highly effectivenature of direct mail marketing programs that has allowed them to be a mainstay evenin 2013, as contextual advertising and social media marketing programs ramp up tolevels never before seen in the field of marketing.
  3. 3. A Look at the State of Direct Mail in 2013 and Beyond, Copyright ©, All Rights Reserved 2A Look at Direct Mails Reach: As Broad as Ever, with Some Challenges AheadTo say that everything in the world of direct mail marketing campaigns is absolutelyperfect would be to gloss over some major issues that are currently facing marketingdepartments everywhere. Generally, the issues that do face direct mail campaigns in2013 boil down to three basic conflicts in every department:- There is a common belief, or concern, that direct mails prominence will eventuallybegin to languish in the future, especially as the fiscal health of the United States PostalService is called into question.- The potential elimination of Saturday mail delivery by the United States Postal Servicemeans that direct mail campaigns have one fewer day to get in touch with consumers,especially for weekend specials and limited-time-only sales offers.- The USPS has been on shaky financial ground for years as digital communication hasusurped traditional mailings. To compensate for fiscal struggles, the agency has raisedthe price of virtually every mailing and postage product it owns. That puts smallermarketing budgets into serious jeopardy, limiting their reach and scope.These three conflicts within direct mailing campaigns are big ones, and theyre largelyinstitutional. Its no secret that much of the effectiveness of direct mail marketing lies inthe postal services ability to deliver mail six days a week, rain or shine, at some of themost affordable rates in the global mailing and shipping industry. With those things inquestion, direct mail marketers have had to quickly adapt their 2013 programs toremain competitive, effective, and on time.
  4. 4. A Look at the State of Direct Mail in 2013 and Beyond, Copyright ©, All Rights Reserved 3An Understanding that the Window of Communication is Now More LimitedOne of the biggest changes taking place in the boarder marketing industry at large is arecognition that the postal service may very well end Saturday delivery, if not in 2013,then likely in 2014 or years to come. This severely limits the effectiveness of reachingconsumers on a weekend, or before the weekend, for limited promotions and specialdeals that wont be in effect during the following week.To address this, marketing departments are beginning to operate on the assumptionthat Saturday is just not a day when marketing gets done anymore. Their five-dayapproach to direct mailing campaigns is being slowly transitioned in, to get theirdepartments and recipients used to deliveries and notifications earlier in the week.Compensation for Costs by Choosing Digital Supplements or AlternativesAnother way that the industry is changing to accommodate the Postal Servicesstruggles is simply to supplement digital marketing materials with more digital initiativesthat take marketing to Twitter, Facebook, Pinterest, and contextual ads on major searchengines. These supplements are considered a good bang-for-buck decision, offsettingthe astronomical increases in direct mail prices and all postage prices in recent years.Of course, there are other reasons that digital campaigns have become a crucialcounterpart to direct mail. Consumers are spending a greater amount of time online,and the market for Facebook and Twitter users has become saturated. Smart marketingdepartments are using digital resources not as a replacement for direct mail, but as away of lowering outreach costs, distributing smaller pieces, and gaining consumersattention with every possible medium available.
  5. 5. A Look at the State of Direct Mail in 2013 and Beyond, Copyright ©, All Rights Reserved 4Smarter Planning Through Smarter Distribution and MonitoringThe United States Postal Service is acutely aware of how its increased fees and reducedservices affect marketing departments, and the company has unleashed several toolsthat allow for careful tracking and monitoring of direct mail effectiveness. This actuallyhelps businesses target their mailings more accurately for the results that they wish toachieve, helping them to lower costs in the face of escalating postage and delivery feesthrough the USPS.Though the USPS frustrates a number of people with its combination of regular feeincreases and proposed service cuts, theres no denying that tools like MarketMail andthe agencys Every Door Direct Mail program are helping professionals achieve resultswhile blunting the effect of USPS fees and policies.A Changing Environment, but a Healthy One for Direct MailThe direct mail medium is changing, as should be expected in a highly digital economyand one where the postal service is constantly in financial jeopardy. These changes donot equate to a weakening of direct mail itself, as it remains highly effective even in theface of digital competition. Instead, these changes require adaptation so that newpolicies and costs can be accommodated in company budgets. In 2013, thats the largeroverall theme: Adaptation to changes in the industry, but not a weakening of theindustry itself.
  6. 6. A Look at the State of Direct Mail in 2013 and Beyond, Copyright ©, All Rights Reserved 5A Look at the Impact of Postal Service Rate Increases on BusinessThe United States Postal Service has struggled to compensate for a broad shift in publiccommunication preferences, with the agency noting that the use of letters and cards tocommunicate has dropped significantly since its peak in the 20th century. In the timesince declines began in the broader postal industry, USPS has endeavored to raise itsfees almost every 18 months on average, with some increases being stacked even moreclosely together. One of the defining features of these increases has been that theyremostly consumer-facing. The majority of increases affect things like flat rate shippingboxes, traditional letters, and other mainstream products.The latest increase, which went into effect at the end of January, 2013, is quite a bitdifferent. The agency raised costs across the board for flat rate mailing of packages andthe distribution of traditional letters. In a big change from normal policy, though, theUnited States Postal Service also imposed a pretty big rate hike on presort letter-sizedmail, nonprofit mailings, the Every Door Direct Mail program, and bulk mailing permits.These larger increases directly affect businesses and their marketing department whereit hurts, imposing some new budgetary considerations when pursuing direct mailmarketing campaigns.Direct Mail: Still as Effective as Ever, with No Reason to SwitchThere has been lots of buzz in the media about marketings broad transition into digitalvenues like Facebook and Twitter, and mobile advertising on smartphones and tablets.Indeed, those industries are growing quite quickly. The whole picture, though, tells aslightly different narrative than the media is willing to focus on: Direct Mailing rateshavent really changed very much, even as digital communication picks up steam.
  7. 7. A Look at the State of Direct Mail in 2013 and Beyond, Copyright ©, All Rights Reserved 6Thats because, in study after study, it has been shown that traditional direct mailingleads to the single biggest increase in nonprofit donations, retail sales traffic, andcompany profits. With results like that, companies everywhere are more likely toembrace new fee hikes than ditch their program altogether.The Effect: Smaller Pieces, Narrower Targets, and Cost CompensationFor any consumer who has been paying attention to their direct mail pieces, one changeresulting from recent fee hikes is probably quite notable. Direct mailing pieces haveeither maintained the same frequency, but gotten smaller, or theyve been received lessoften, and gotten larger. This is because companies are cutting their costs in one of twoways: Smaller pieces, often the size of a postcard, are actually more affordable to sendin bulk. They can easily announce weekend sales or next weeks promotions withoutcausing the company to overrun its marketing budget.Meanwhile, some companies just can’t accept the distribution of smaller pieces eachweek. Instead, they focus on slightly larger direct mailing pieces that go out biweekly.Consumers will notice that they may get less direct mailing each week, but that theyrestill hearing from the same companies on a regular basis. This is another key way toblunt the impact of large fee increases which, for the Every Door Direct Mail program,went from 14.5 cents per piece to a whopping 16 cents per piece at the beginning of2013. That represents the largest such fee hike for the program in its history.
  8. 8. A Look at the State of Direct Mail in 2013 and Beyond, Copyright ©, All Rights Reserved 7Want to read the rest?Get the full report!

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