By Mercedes Cardona
The reports of the death of direct mail (DM) have been greatly exaggerated, to paraphrase Mark Twain.
The channel was declared endangered with the rise of digital media, as email volume clearly outpaced that of direct mail. But in the wake of the COVID-19 pandemic, as businesses struggle to recover, mail volumes have gone up, and marketers are coming back to the channel. In fact, many enterprises are exploring new ways to make mail a part of a holistic media plan—and they are finding consumers to be more receptive than ever.
“I think we’ll see a continued slow but steady rebound for direct mail in 2022 and beyond, as it finds its home as a valuable primary channel for some organizations and an effective supporting channel for others,” said Ginger Conlon, president of the Direct Marketing Club of New York. “Direct mail works for the organizations that use it wisely in their marketing mix, often as part of a multichannel one-two punch.”
Conlon cited data from Winterberry Group that showed spending on direct mail in the U.S. declined by about 17 percent in 2020, but was projected to bounce back by about 5 percent, to $36.5 billion, in 2021. Indeed, by the middle of 2021, direct mail volume was running 34 percent over 2020, as businesses began recovering from the pandemic.
Conlon noted that, anecdotally, much of the direct mail in the second and third quarters of 2020 and the third quarter of 2021 was focused on local elections, and nonprofits seem to be holding steady in terms of their direct-mail usage. Additionally, she noted e-commerce and direct-to-consumer companies seem to be testing direct mail to drive online shopping and purchasing and “there’s no shortage of holiday catalogs.”
The 2021 volume increase and the expectation of rising budgets is mainly a result of the sharp drop seen in 2020. Just as direct mail suffered during the 2008-09 recession, it got hit when the economy spiraled in the early days of lockdown, explained Jonathan Margulies, managing partner of Winterberry Group. Some businesses that have been hit worse by the pandemic, such as hospitality, are still slow to come back, but others, such as financial services, are showing strength. Some of the effects of the recovery are being dampened by the supply chain shortages in some sectors, such as automotive, which is a big user of direct mail for customer acquisition, said Margulies.
“Conventional wisdom for many years was that when you were in a recession or facing difficult challenges specific to your vertical market, you would simply look to slash and burn marketing spend wherever you could, and direct mail is always sort of an easy target,” said Margulies. But as the economy reopens, some business sectors, such as financial services and insurance, have seen an uptick in the use of direct mail and have resumed innovating with the medium.
Direct mail results on the upswing
“These things are cyclical,” said Robert Bly, author of The Direct Mail Revolution (Entrepreneur Press, 2019). “With more email in the inbox, and less DM in the mailbox, DM results are on the upswing.” On the downside, he suggested that B2B direct mail has been disrupted by the remote-work pivot during the pandemic. “Some people are no longer going into the office. Direct mail lists primarily have their office address,” he explained. “Whether your B2B DM can still reach them has become more uncertain.” One of the ways marketers are finding to deal with this disruption is working out ways in which to capture prospect and customer “preferred addresses”–that is, the current address at which they feel comfortable receiving mail.
Anecdotally, some marketers claim consumers are showing more interest in the direct mail pieces they receive than ever before. With concern about phishing scams, spam, and other potential digital dangers, consumers are more willing to tune email out and give direct mail more attention. A recent PFL research [MOU1] study found that “customers considered anything that lands in their mailbox or doorstep to be direct mail,” according to Samantha Patterson, PFL director of product marketing.
Marketers have also noticed some evidence that direct mail could be landing more forcefully with younger digital natives, who see the messages in their mailbox differently than do their elders. Direct mail often has “a bit of a surprise and delight component,” especially for a generation that has not grown up seeing the mail as a channel for essential communications, Margulies explained. Younger consumers don’t associate the mail with bills or bad news, but instead as a channel where they may be surprised by something, he suggested.
“For them, it’s a little bit of a momentary surprise and delight experience every day,” he said. “That’s serving to reinforce the sort of generational appeal among folks who otherwise would not have much reason to open the mailbox at all.”
To capitalize on that appeal, marketers have been spending on data to improve the quality of their targeting and pivoting away from “spray and pray” strategies. Conlon noted that marketers will likely increase spending on any channel that allows for real and relevant personalization, “not just custom fields and ‘people who bought this widget bought that one next,’ but true data-driven interactions based on customer’s actions and interests and even their shared values.”
Mixing the medium
Direct marketers say they are seeing anecdotes of success by mixing the medium with digital calls to action, personalized messages, and new formats. For example, adding the URL of a landing page to capture response, or convert to leads or orders, shows results, noted Bly.
Indeed, direct mail is now enmeshed with digital communications, said Karen Ortiz, director of print and mail services at PFL. “Direct mail never went away, but was united with digital mail. Instead of deciding between a direct mail or a digital campaign, high-performance brands expand the effects of their marketing campaigns by using both. Direct mail has always been versatile and effective, especially when combined with digital marketing.”
Margulies noted that companies are also investing in data and leveraging new printing technology to personalize their direct mail in ways that were not possible before. Sophisticated printing technologies allow for new formats of direct mail that can better capture the consumer’s attention at the mailbox, “essentially anything that’s going to help generate attention, but still allows the brand to capitalize on available postage, discounts, and the like,” he explained.
QR codes, which have been around for more than a decade, are having a moment, as well, thanks to a higher awareness among consumers, who have been using them for many touchless applications during the COVID pandemic. Margulies noted that many brands have used the codes for the last 15 years, but they ran into hurdles of awareness and the need to download a reader app to use them. Now “the experience of going to restaurants and using a QR code to access a menu or being out in the town using a QR code for an out-of-home installation has really conditioned a lot of consumers to engage with them more and more,” he said. “We’re seeing brands basically embed them in their direct mail pieces so as to provide a much more seamless direct response mechanism.”
A little more bullish
Looking forward to 2022, the landscape is still uncertain, due to the continued pandemic. What’s more, budgets in direct mail are notoriously last-minute, Margulies noted. Winterberry was still planning its annual forecast at year-end, but he noted it is “a little bit more bullish” than the normal flat growth curve that would be expected in a normal year.
The direct mail segment has been stagnant for some years due to economic shocks and digital disruption, but, concluded Margulies, “there’s a general sense that the economy and the brands are beginning to adjust to the whole set of new normals within which we have to operate. Sooner or later, those brands that have been relatively dormant are going to be coming back in full force. When they do, they’re going to turn to direct mail as a means of getting out in front of their desired customers.”
Mercedes Cardona is a New York-based editorial consultant and founder of “Commerce and Reads”. She is a veteran editor for media organizations including The Associated Press and The Economist Group and has contributed to books including The Advertising Age Encyclopedia of Advertising and Single Women and Money.