DMA: Mailers Turning to Internet

  |  October 22, 2002   |  Comments

Although it remains fairly immature, offline direct marketers are increasingly dabbling in e-mail -- and impacting postal mail volumes.

Major direct mailers are adopting email in growing numbers -- although the online channel remains relatively immature, according to new findings from the Direct Marketing Association.

Research conducted by the New York-based trade association during its annual "State of Postal and E-Mail Marketing" survey found that 71 percent of direct marketers increased their use of email.

Still, it's difficult to see whether the trend has eroded the use of offline direct mail. In the short term, it appears that offline mailing continues going strong. The research found that most direct mailers either maintained or increased their mail volume during 2001, with only 21 percent reporting a decrease.

But compared to years before mass-market acceptance of email, offline direct marketing has taken a hit, the DMA found. In 1997, about 70 percent of mailers were increasing mail volume from the prior year. And as tensions mount in the offline mailing space -- prompted by factors like rising postal costs -- there's likely to be further modifications to the picture.

Indeed, cost-related factors accounted for most direct mailers' interest in the channel, with about 60 percent citing the relative inexpensiveness of online direct marketing as their main reason for adopting email, the DMA found.

E-mail also seems to be proving more effective than direct mail for many marketers, the DMA found. Online marketers participating in the study reported a 35.2 percent increase in responses in 2001, while 25 percent of offline mailers reported the same. Only 6 percent of online mailers said they saw a decrease in response rates, while traditional direct mailers reported a 21 percent fall. (That's another trend that some see changing, however. DoubleClick , for instance, has reported seeing decreasing email response rates during the past several quarters.)

"Increasing postal rates and a challenging economy forced many direct marketers to test new strategies in search of innovative ways to communicate with customers," said H. Robert Wientzen, president and chief executive of the DMA. "As a result, email marketing has rapidly evolved from a relatively unsophisticated medium of mass promotion to a highly specialized medium used to drive revenue, deepen customer relationships, and influence prospect behavior."

The new findings come on the heels of a report by GartnerG2 that found that email would significant cut into direct mail volume, and would grow from $948 million in 2000 to $1.5 billion in 2005.

Still, the DMA found that email marketers still wrangle with a number of limiting factors. For one thing, email marketers are pressured by privacy concerns to adopt increasingly different list strategies than those that offline mailers have long found successful, according to the study. While 35 percent of postal mailers said they rent or exchange email lists, only 8 percent of online mailers said they do the same.

For consumer-focused companies, the gap is even wider: 8 percent of online marketers rent or exchange lists, compared to 54 percent of their offline counterparts.

E-mail marketers also are divided on techniques for increasing mail effectiveness. Compared to offline mailers, email marketers favor tools like personalization (used by 57 percent of the respondents), demographic segmentation (49 percent), outside databases (45 percent) and geographic segmentation (44 percent).

More than 90 percent of postal mailers, on the other hand, tend to use techniques including internal housefiles (93 percent), prior mail histories (93 percent), personalization (91 percent), national change of address information (90 percent) and remailing to multi-buyers (90 percent.)

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