Direct Mail Advertising NAICS 541860

May 16, 2025 - Utilities and Real Estate Are Prime Direct Mail Customers

• Employment in the direct mail advertising industry was down 13.7% year over year in January 2025, according to the Bureau of Labor Statistics, as the sector struggles to keep up with online advertising. While traditional “junk mail” is seemingly an afterthought in the current advertising environment that is oversaturated with digital ads that are often ignored, direct mail is still effective for specific industries such as utilities and real estate. Utilities must communicate with local customers frequently and send bills through mail, and the tangibility of a piece of mail is hard to ignore as one would a digital communication. As utilities grow, it also becomes harder to manage such mailings, offering opportunities to outsource that business to direct mail companies. Real estate is another key market for direct mail and is an ideal format to show off houses in photos, brochures, letters, and newsletters.
• The United States Postal Service (USPS) announced new service standards that will affect the delivery of certain types of mail as the federal mail carrier looks to save $36 billion over the next ten years. The USPS lost $9.5 billion in 2024 and close to $100 billion since 2017. Beginning on April 1, 2025, first class mail will still be delivered within one to five business days, but will be delivered at 75% of its current rate, 14% at a faster rate, and 11% at a slower rate, depending on the length of travel. Deliveries of marketing and direct mail, packages, and periodicals will be shortened. In addition to the delivery changes, the Trump administration has floated firing the USPS board of governors and folding the Post Office into the Commerce Department. Such a move would cause a political firestorm and would be potentially illegal without Congressional approval.

• US net media owner advertising revenues rose by 12.4% to $380.2 billion in 2024 as cyclical events, including the Summer Olympics and the presidential election, pushed ad spending higher, according to advertising firm MAGNA. Direct mail ad spending in 2024 rose 1.2% and is forecast to grow 4.5% in 2025. For all 2025 ad spending, the top-performing verticals are projected to be food, beverage, personal care, household goods, technology, and finance.
• According to a recent report by direct mail marketing automation firm Lob, the direct mail market remains robust. Of 250 North American marketing professionals surveyed, 84% said direct mail has the highest return on investment (ROI) of any marketing channel. Direct mail also has the highest response rate (84%) and the highest conversion rate (85%). Over 80% of survey respondents said they increased their direct mail investments in 2024. On average, a relevant direct mail piece stays in the recipient’s home for up to two weeks, making direct mail much more effective than email, according to programmatic direct mail firm PebblePost.