PERHAPS MAILERS WERE BEGINNING TO FEEL THE EFFECTS of a slumping economy. Or maybe they anticipated a distracted audience in the days of uncertainty following Sept. 11. Whatever the reason, even before anthrax became part of the postal equation, marketers planned to limit their use of direct mail.
Marketers who responded to DIRECT’s annual survey indicated they’re pruning their mail budgets at an ever-increasing pace. In 2001 6% said their direct mail spending in 2002 would decrease, compared with 55% that expected an increase. This year, however, nearly 16% said mail expenditures would likely drop, while only 39% anticipated more spending.
Consumer mailers are leading the pullback. Twenty-five percent will cut direct mail budgets in 2002 compared with 30% that will raise them. Business-to-business marketers were the most bullish, with nearly half anticipating an increase in their mail budget and only 11% predicting a drop. Mixed-focus firms tended toward the consumer marketers’ trends, as 35% indicated a hike and 15% assumed a cut.
So where is the drop in direct mail volume coming from? Among consumer mailers, outside list use is way off last year’s levels. Four out of five said they used outside lists for their mail programs in 2000. This year that fell to 56%. Mixed-focus marketers’ use of outside lists tailed off from 85% last year to 76% in 2001.
But B-to-B mailers are actually using more of these lists: Seventy-one percent said they did, compared with 69% last year. Even so, such efforts are proving to be less effective than in the past. Those replying to the survey indicated their average response rate to outside lists was 5.8%, a full percentage point lower than last year.
With such a large drop in outside list use, it makes sense that consumer marketers would turn to their house files. Ninety-two percent sent direct mail to house lists, up from 85% last year, while 85% of B-to-B mailers did so, nearly mirroring last year’s 83%. And 85% of mixed-focus marketers used house files, compared with 93% last year.
Respondents saw house list response rates of 10.6% for the first three quarters of 2001, up from 10.1% last year. But most of that came from campaigns analyzed before September’s tragedies.
B-to-B Firms Spend the Most
Year after year, the B-to-B market has put the largest share of its budget into direct mail, followed by firms that pitch to both businesses and consumers and trailed by consumer-only marketers.
If respondents’ forecasts come true, marketers will be cutting back on the largest single channel they use. Marketers allocated 34% of their budgets for direct mail other than catalogs in 2001, consistent with the 33% that did so in 2000, and accounting for the largest percentage of any channel. Only catalog mail (24%) and inbound/outbound telemarketing (17%) even came close.
Overall, those that use direct mail rely on it heavily. This year 14% said they spent at least four-fifths of their marketing budget on direct mail other than catalogs, compared with just over 10% in 2000.
