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 $5.5 million annually.

    • The direct mail advertising industry consists of about 1,800 firms that employ about 36,000 workers and generate almost $10 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 2022, the US Postal Service delivered more than 65 billion pieces of advertising mail, which accounted for more than half of all US mail volume.
                                    Industry Forecast
                                    Direct Mail Advertising Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Mar 12, 2024 - Direct Mail Industry to Slow
                                    • The direct mail industry is expected to see a slowdown after posting solid gains in the years after the onset of the pandemic. The industry’s year-over-year growth was flat at 6.2% in 2020 then rose 11.9% in 2021, 10.8% in 2022, and 6% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Growth in the direct mail industry is expected to moderate to 2.5% in 2024, then grow by 5.7% per year in 2025, 2026, and 2027, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                    • Recent surveys suggest that direct mail continues to grow and be effective, even among younger millennial and Gen Z consumers, according to Printing Impressions. In a Lob and Comperemedia survey, 84% of marketers said that direct mail provides the best ROI of any marketing channel they use. Customization, including personalized URLs that can help measure direct mail conversions, is rising. According to a survey by direct marketing firm Sequel Response, 69% of consumers engage with direct mail every week, and a third do so daily. About 45% of consumers feel that direct mail is less overwhelming than other types of marketing.
                                    • Shipments by printers, a demand indicator for direct mail advertising, increased by 0.9% in January compared to the prior month. On a year-over-year basis, printing shipments in January decreased 0.1%.
                                    • Spending for US political advertising in 2024 is projected to reach $15.9 billion, up more than 31% compared to the last presidential election year in 2020, according to advertising firm GroupM. Including direct mail, political ad spending will reach $17.1 billion in 2024. Most political ad dollars will be spent on broadcast TV, but digital channels are also expected to take a significant share. Some other forecasts expect a slightly lower total for political ad spending for 2024, around $10 billion, according to Axios. GroupM’s forecast includes a broader group of placements and formats, including digital out-of-home billboard ads and issue advertising by advocacy groups and political action committees.
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