2 October 2008 - The economic downturn, cheaper ways of sending junk mail and increasing concern about waste caused by junk mail has led to a 6.2 per cent drop in direct mail spend. Last year, expenditure on addressed advertising mail fell by 10 per cent.
Research by Nielsen Media shows that companies continue to cut their direct marketing budgets. Nielsen's survey, involving 10,000 participants who forwarded their direct mail to Nielsen for analysis, shows that the overall spend on addressed junk mail fell by 6.2 per cent to £1.57bn in the year to June 2008.
MBNA is still the worst offender, with a budget of more than £35m. However, last year's number two brand, Capital One, has cut its direct mail budget by no less than 83 per cent and now takes the 53rd place in the 'junk mail top 100'. Other financial companies, such as Halifax, Lloyds TSB and Barclaycard, all remain in the top 10.
Nielsen Media has identified three reasons why companies are shifting away from using junk mail in their marketing campaigns: the economic downturn, the relatively high cost of direct mail (compared to for instance e-mail) and what Brand Republic, a website for advertisers and marketeers, has labeled 'the green issue'.
On its website, Brand Republic explains that consumers are increasingly aware of "a need to cut back on packaging and paper" and that many people nowadays "frown upon direct mail and the waste it creates." It quotes various marketing experts such as Heather Westgate of marketing agency TDA, who told the website that "using direct mail as a mass-marketing medium leads to unnecessary waste".
An interesting finding is that the decline in addressed junk mail is mainly due to a reduction in the amount of mail-outs send to consumers with whom companies have no relationship (so-called 'cold-targeting'). Instead, companies are increasingly spending money on sending advertising mail to existing customers.
In recent years marketeers have been urged repeatedly by the Government to reduce waste caused by junk mail. Reducing waste is still seen by the industry as "a huge challenge" for the reason that environmentally sound practices are far more expensive than 'one-size-fits-all' marketing strategies. As marketing expert Neil Fisher puts it: "Generally speaking, it is more expensive to use environmentally responsible stocks and inks. When you consider that ROI [the amount of money earned or lost from a direct marketing campaign] has decreased in recent years, it places your average direct mail manager in a difficult position. How many people would feel happy going to their board of directors and telling them that ROI is down, but recommending that they absorb an increased cost-per-thousand in order to be more environmentally responsible?"
No new figures have been released about the amount of unaddressed junk mail posted through British letterboxes. In recent year the decline of addressed advertising mail was balanced by an increase in the amount of unaddressed junk mail.