The latest reports on direct mail show that it’s doomed, eternally doomed.
What’s to blame for direct mail’s sad demise? Email and online coupons.
“The kudzu-like creep of the Internet is about to claim its third analog victim,” according to the latest research report from research firm Borrell Associates.
“Direct mail has begun spiraling into what we believe is a precipitous decline from which it will never fully recover,” Borrell predicts. More specifically, it is projecting a 39% decline for direct mail over the next five years, from $49.7 billion in annual ad spending in 2008 to $29.8 billion by the end of 2013. (MediaPost)
If Borrell’s predictions pan out, direct mail will no longer be the top placeholder for ad revenue and will fall to the fourth spot. The leaders will then be the Web, broadcast TV and newspapers.
“Email advertising is indeed skyrocketing while its traditional counterpart plummets,” Borrell notes. “In fact, last year, email advertising quietly moved to the No. 1 online ad category spot, surpassing all other forms of interactive advertising.” Last year, advertisers spent $12.1 billion on email marketing, more than they spent on display/banner advertising or search advertising.
The firm is also forecasting that most of the growth in email marketing will be local. Borrell expects local email advertising to grow from $848 million in 2008, to an estimated $2 billion in 2013.
However, the report also warns against jumping into email marketing without being prepared for potential risks.
“Managing large e-mail marketing campaigns require database marketing expertise, a savvy sales force, adequate e-mail management software, familiarity with the rules and regulations and a lot of patience.”