springtime clair: Direct marketers struggle for viability

Sunday, January 27, 2013

Direct marketers struggle for viability | TribLIVE

By Tory N. Parrish

Published: Saturday, January 26, 2013, 12:01?a.m.
Updated 6 hours ago

The recession, postal rate hikes, targeted mailings and increased use of the Internet have cut into direct-mail advertising, and some marketers say they?re bracing for another hit when the Postal Service increases rates again on Sunday.

?Many direct marketers have a fixed budget ? and as postage goes up, they can mail fewer pieces, and that means they won?t mail as far down their mailings lists,? said Jerry Cerasale, senior vice president of government affairs with the Direct Marketing Association.

He said increased costs of printing and paper also have spurred advertisers to cut back.

For some people, less direct-mail advertising is a good thing.

?I?m always excited about the idea of less junk in my mail,? said Dawn Meling, 28, of Ross.

The Postal Service posted a $15.9 billion loss in fiscal 2013.

The latest increase will be its third in three years. Prices for all types and classes of mail will increase overall by 4 percent; a first-class stamp will go up a penny to 46 cents, and bulk-mail rates will rise 2.6 percent.

Bulk mailers are among the best customers.

In 2012, advertising mail was the agency?s largest industry segment in volume at 50 percent, accounting for 25 percent of revenue at $16.4 billion.

?I think the post office is making it difficult for themselves and for us, because direct marketing is actually very viable and is actually growing in my company,? said Dave Jones, owner of Crafton-based Allegra Pittsburgh, which provides direct mail, marketing and other services for mostly business clients.

Direct mail generates revenue for businesses, and the consumer response rate for direct mail exceeds that of email marketing, according to the Direct Marketing Association, a New York City-based trade organization.

Yet some customers consider catalogues and brochures in their mailboxes an intrusion.

Catalog Choice, one of the largest mail preference companies in the United States, since 2007 has processed 26 million ?opt out? requests for consumers who want to be removed from mailing lists.

?I don?t think we?re in favor or not in favor of direct mail. What we?re in favor of is giving consumers a choice of whether they want to receive that mail,? said spokeswoman Lyn Chitow Oakes.

Between 2007 and 2012, annual advertising mail volume declined 23 percent from 103.5 billion to 79.5 billion pieces.

The Postal Service attributes some of the decline to companies using more targeted mailings based on data about customers, rather than casting a wide net with generalized advertising.

Some companies that frequently use mail advertising said they aren?t ready to scale back but will watch how they spend money.

Mt. Lebanon-based Rollier?s Hardware mails about 20,000 newsletters to customers four times a year and includes fliers in mailed publications, said Derek Satterfield, floor manager.

?We still look at advertising on the basis of how much we?re getting back in return,? he said.

Tory N. Parrish is a staff writer for Trib Total Media. She can be reached at 412-380-5662 or tparrish@tribweb.com.