Mail Holds Own As Top DM Channel – For Now
Direct mail will account for $19.17 billion in media supplier advertising revenue during 2010, making it the top revenue generator tracked by forecasting firm MagnaGlobal. But combined spending on online direct and local digital marketing will reach parity with it this year, and will surpass it in 2011.
In 2010, total supplier ad revenue will amount to $169.1 billion, and direct mail will make up 11.3% of that, according to MagnaGlobal. At $15.4 billion, direct online will account for 9.1%. But local digital and online revenue is tracked separately. Add $3.7 billion from local digital, and online is estimated as generating only slightly less than mail.
If forecasts hold, 2011 will provide a watershed moment in which local digital and direct online ad revenue will total $21.1 billion, or 12.3% of the $171.2 billion in supplier revenue MagnaGlobal anticipates. In contrast, direct mail will account for $19.6 million, or 11.4% of total spending.
Online marketing’s increases come even with weakness in the online classified sector serving as an anchor, according to MagnaGlobal.
MagnaGlobal counts direct mail, online direct and directory spending, but not local digital, in its direct calculations. Last year, the $42.8 billion direct spending generated made up 26.2% of total supplier ad revenue. The $43.6 billion foreseen this year will amount to 25.8%, but the anticipated $45.1 billion in 2011 will pull direct’s percentage back up to 26.3%.
Why the dip this year? Spending on the summer Olympics, combined with the congressional elections this November, will boost television revenue faster than direct response channels’ revenue. During 2010, local and national TV spending jumped to $53.84 billion from $50.57 billion.
MagnaGlobal’s predictions are based on several assumptions, including continuing, if unspectacular, improvements in the economy and no “double dip” recession.
