Direct Mail Advertising
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,800 direct mail advertisers in the US distribute coupons, flyers, and other marketing materials through the mail on behalf of customers. Primary sources of revenue include full direct mail services, letter shop services, printing services, and fulfillment services. Direct mail includes letters, postcards, brochures, catalogs, and free samples. Large companies may offer integrated marketing services and also offer digital marketing, traditional media, or public relations services.
Industry Contraction
Direct mail volume fell dramatically during the 2008/2009 recession, and the industry has struggled to generate growth ever since due to the rise of digital communication.
Competition from Alternative Sources of Advertising
Direct mail competes with other advertising vehicles, including digital advertising (social media, email, internet ads) and traditional advertising (newspapers, TV, radio, print).
Industry size & Structure
The average direct mail advertiser works out of a single location employs fewer than 20 workers and generates about $6.5 million annually.
- The direct mail advertising industry consists of about 1,800 firms that employ about 34,000 workers and generate almost $11.7 billion annually.
- The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for 50% of industry revenue.
- Large firms with direct mail operations include Valpak (Platinum Equity), Valassis (Vericast), and Mspark (PennantPark Investment Corporation).
- In 2023, the US Postal Service delivered more than 57 billion pieces of advertising mail, which accounted for more than half of all US mail volume.
Industry Forecast
Direct Mail Advertising Industry Growth
Recent Developments
Nov 12, 2024 - Direct Mail Market Healthy
- 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.
- Commercial printers’ sales in midyear 2024 were up about 1.1% compared to a year earlier, according to a recent survey by PRINTING United Alliance and NAPCO Research. While 43% of printing firms surveyed said their sales increased in the first half of 2024 over the same period in 2023, 57% said sales were flat or had decreased. About 20% of firms reported sales increases of 10% or more, but 18% reported sales declines of 10% or more. More than 70% of printing firms said the economy, interest rates, and inflation had a negative impact on their business in 2024. Despite headwinds, over 82% of printers plan to make capital investments over the next 12-18 months. Artificial intelligence applications topped the list of planned investments, with 35.6% of printers planning to spend on AI, followed by bindery/finishing equipment (34.7%), digital infrastructure (33.7%), ecommerce solutions (32.7%), and workflow software (30.7%). The state of the printing industry is an indicator of direct mail demand.
- Lead generation marketing firm PostcardMania notched $104.6 million in sales in the third quarter of 2024, up 18.6% compared to Q3 2023. The company said the large leap in quarter-over-quarter revenue suggests more business owners and marketers are choosing direct mail for their marketing strategies. PostcardMania’s third-quarter results were driven by the company’s partnership-driven PCM Integrations (PCMi) arm, as revenue in the division jumped 58% compared to the same period a year earlier. PCMi partners with providers of customer relationship management (CRM) and marketing software, allowing the partners’ users to launch direct mail campaigns with scalable, programmatic targeting and delivery.
- A recent survey by Keypoint Intelligence offers insights into what prompts consumers to engage with direct mail pieces. About two-thirds of those surveyed said they paid more attention to direct mail pieces that included personalization. Specialty printing effects – such as raised surfaces and metallic colors – also grab more attention; 60% of those surveyed said they would probably or definitely notice mail items with special effects. Including QR codes improves direct mail engagement, especially with younger consumers. Nearly half of survey respondents between the ages of 27 and 42 reported they frequently or sometimes scanned direct mail QR codes. Almost 60% of respondents said they had made a purchase in the last three months based on a piece of direct mail they had received.
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