The Guide To America's Mailstream
technology : Postal2020.com
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How Targeting & Technology Changed The Ad Game

Targeting & Technology Change Mail Game New figures from advertising authority Robert Coen show that advertisers used mail at record levels in 2007.

Mail spending rose 4.0 percent in 2007 to $60.998 billion, according to Coen, senior vice president, director of forecasting with Universal McCann, one of the largest advertising agencies in the world,

In the December 2007 issue of his “Insider’s Report,” Coen
said that advertisers spent $283.88 billion on all media in 2007, a .07 percent increase over 2006. In effect, mail continues to represent one of every five dollars spent by U.S. advertisers.

Coen said Internet advertising increased 20 percent in 2007 to $10.92 billion — about one-sixth of the dollars spent with the mailstream. Newspapers took in $42.94 billion, down substantially from the $47.71 billion spent in 2006.

For 2008 Coen estimates that total ad spending will grow by 3.7 percent to $294.38 billion. expenditures for ad mail will grow at an even stronger pace. Coen predicts that for 2008 advertisers will spend $63.73 billion advertising through the mailstream, up 4.5 percent over 2007.

The fact is that advertisers will spend more money on direct mail than on promotions through radio, newspapers, magazines, network television, cable TV or the Internet.

“Madison Avenue,” says Business Week, “came of age as a content supplier to mass media and remains much better versed in making 30-second TV spots than in exploiting the interactive intricacies of the Internet. What is more, in the same way that network TV’s dominance of media is eroding, advertising’s dominance of marketing is diminishing. Marketers are increasing their spending on telemarketing, direct mail, e-mail, in-store displays, and other forms of closely targeted, nonmedia spending.” (See: “The Vanishing Mass Market,” July 12, 2004)

For advertisers, there is a use and value for all forms of media. Each media option offers something unique, and in a country with an $11 trillion economy everyone benefits when there are numerous media choices.

But why the interest in mail?

Advertisers today want to reach specific publics. For instance, a local pizza store may want to reach everyone in a given ZIP code while a company that sells ski boots may only want to reach households with a given income level in communities where snow is common six months a years.

The availability of consumer and business data, advanced software, computers and market segmentation allow advertisers to target their messages with great precision. And when messages are carefully targeted, it becomes possible to obtain higher response rates and lower costs per sale. In other words, mail is popular because advertisers get strong returns for each dollar they spend.

Targeting offers other benefits as well.

  • With careful targeting consumers are likely to receive fewer irrelevant ads. They will increasingly receive only those ads which most closely relate to their buying patterns and preferences.
  • In an age of heightened environmental awareness, targeting can lower material consumption and yet produce the same number of sales.
  • Advertising mail is the most democratic medium of all. You don’t need a $10 million campaign to start an advertising mail program. Individuals, small businesses, charities and growing companies can all find advertising mail programs that fit their budgets — and the same is also true for unions, political campaigners, environmental groups, consumer organizations and religious congregations.

Does ad mail targeting work? You bet.

According to the Postal Service consumers read 78 percent of the advertising mail they receive, nearly 10 percent respond to offers, and 21 percent bring coupons and ad mail with them when they shop.

The new emphasis on targeting can be seen in ad mail volume:

For example, between fiscal 1996 and 2007, ad mail volume increased from 71.7 billion pieces to 103.516 billion — a huge gain, especially given the growth of email and online communication in general.

What is the future of ad mail? Given universal delivery six days a week as well as competitive pricing, ad mail offers much potential. After all, how else can you securely reach more than 148 million physical addresses?