A week earlier, the title of a front page article in the June 1, 2009 issue of DM News screams: "Postal decline worsens due to delivery flaws." That provocative headline immediately got my attention. Fortunately it was a short, four-paragraph article providing a quick read.

The first two paragraphs were dedicated to some volume statistics released by the U.S. Postal Service in late May. With our economy and our banking system falling on hard times, the fact that the postal service is also struggling should come as no surprise. After all, almost every consumer paying attention has discovered that the ubiquitous credit card mailers that arrived daily have experienced a sudden death…a victim of the ongoing credit crisis. Their loss – along with the loss of mortgage and equity line mailers – is largely responsible for the post office reporting that mail volume decreased by approximately 7.6 billion pieces from May 1, 2008 through April 30, 2009. On a percentage basis, this is a 14.8% drop in volume.

Given the severity of our economic downturn and prognosis of a very long, slow recovery, the decline in postal volume should come as no surprise. In fact, the postal service appears to be holding up much better than many other companies – especially the car companies, home builders, realtors, and many small retailers. This decline in volume does not necessarily signal some seismic shift in channel choices by marketers or consumers. It's simply the result of an economic downturn.

But, unfortunately, that was not how it was reported in this DM News article. It was the next two paragraphs that were bothersome. Shifting from the USPS data, the article provided some forecast data from Borrell Associates – a media research, consulting, and project firm specializing in local Internet advertising. 

The first sentence in the article's third paragraph reads, "Problems with mail delivery was one factor identified as a threat to the direct mail industry in a new forecast from Borrell Associates." Remember the article's title mentioned above is: "Postal decline worsens due to delivery flaws." Yet nowhere in this article is there any mention of postal delivery problems or flaws. In fact, this is the first time I've been made aware of any postal delivery flaws. Absent any examples, it appears to be a straw man or illogical fallacy serving only to confuse readers. 

The article goes on to deliver some additional "shocking" statistics about the troubles with the postal service. In one sentence we discover that advertising revenue from direct mail is expected to "plunge" 39% by the end of 2013, according to this Borrell study. Note the word "plunge." At the very end of the article a Borrell vice president is quoted: "Put all those things together and it's a formula for disaster for the USPS and direct mailers."

While the article never mentions e-mail marketing, the rationale behind it seems obvious given the data source. Plant the seed that the postal service is in serious trouble so marketers will be more receptive to sales calls from vendors pushing e-mail marketing programs. It's the classic "problem/solution" approach to marketing. 

In reality, the news is not all bad for the postal service. For example, the insurance industry has increased its volume of direct mail during the downturn. The article, "Homeowners insurance offers still appear regularly in consumers' home mailboxes," appeared in the March 2, 2009 issue of DM News. According to a survey by Mintel Comperemedia, 82 million homeowners received insurance offers in the mail during 2008, up from 69 million in 2007. That's a 19% increase in volume.

Actually, there is a silver lining here…at least from my perspective. A drop in direct mail volume is actually favorable for those marketers still using direct mail to reach customers and prospects. Why? Less clutter on a daily basis. No longer does your mail piece have to fight as hard for attention. Absent all those credit card, mortgage loan, and equity line and loan mailers, your direct mail piece has a much better chance of grabbing your prospect's attention and getting read.

Hardly a day goes by that I don't receive one or more e-mails promoting some aspect of e-mail marketing. It reminds me of the frenzy of the great Oklahoma land rush of 1893. In spite of all the hyperbole surrounding e-mail marketing, regular mail is still very much in vogue among marketers.

AN OUTCRY OVER CUTTING ONE MAIL DELIVERY DAY

Proof that direct mail is in no danger of serious decline – at least not yet – was found in the article, "No day is a good day for no mail," which appeared in the February 9, 2009 issue of Advertising Age.

In his January 28, 2009 address to Congress, Postmaster General John E. Potter commented on a desire for flexibility should the post office wish to drop one day of delivery each week in order to reduce costs. The outcry from mailers was immediate and loud…with sound rationale provided for needing all six days. Surprisingly, Saturday is deemed a critical day by many mailers to avoid two straight days without mail and often three due to the number of holidays falling on a Monday.

At the present time the general consensus is that the postal service is unlikely to pursue one less delivery day a week but brought up the option as part of an overall effort to make its case to Congress for more flexibility in cutting costs due partially to declining mail volumes.

FLUCTUATING MAIL VOLUMES IS NORMAL

Declining mail volume during this economic downturn should not be misinterpreted as a sign that the medium is falling out of favor.

Mail volume fluctuates periodically for any number of reasons. For example, when the Social Security Administration began shifting from sending monthly checks by mail to direct deposit, the mail volume dropped dramatically. As of January, 2007, 80% of the 56.8 million Social Security payments are made via direct deposit. That's a decline of 45.4 million pieces of mail monthly. 

Now there's talk about voting entirely by mail to get more people to vote while reducing the expenses of setting up polling places all over the country. As of the 2008 presidential election, there were 169 million registered voters in America. Imagine the mail that gets generated each time we have an election in this country. Currently, approximately 60% of voters are voting by mail. Adding the remaining 40% would be an additional 67.6 million mail-in ballots. And remember, elections take place annually when you consider all the state and local elections that occur.

Like most major businesses in this country, the post office has to change its volume perspective. No longer can it count on volume increases year after year. It has to learn to accept a more volatile volume scenario moving forward. This means more dependence on part-time workers and more efficient staffing models. Already we've witnessed the post office offering a "summer sale" on postage this year for mailers meeting certain requirements.

In spite of the increased volume volatility, as you can see from the graph in the sidebar to the right showing ad spending by medium for 2008-2009, direct mail is projected to remain in the number one position at 22.6%.

AS VENDORS INCREASE IN NUMBER, THE BUDGET PIE GETS SMALLER

"Follow the money trail" is always good advice if you want to know the real reason behind what is happening anytime, anywhere.

If Greek philosopher Aristotle was alive today and we could solicit his opinion about the assorted e-mail marketing articles mentioned above, he would remind us of something he said centuries ago: "All that we do is done with an eye toward something else." In layman's language, Aristotle was advising us that "to understand the deed, look to the motive." In other words – follow the money trail.

In this case, e-mail marketing is a relatively new marketing channel that’s been added to the growing mix of available marketing channels. Such channels include direct mail, telemarketing, radio, television, newspapers, magazines, free-standing inserts (FSIs), phone directories, billboards, transit, word-of-mouth, mobile, websites, blogs, and e-mail marketing. While quite stable for many years, the Internet has ushered in a number of new marketing channels available to marketers.

At the same time the number of channel choices is increasing, thanks to our severe economic downturn, the size of the marketing budget pie is decreasing. Quite simply this means that we have many more vendors chasing fewer precious marketing dollars. For the burgeoning e-mail marketing industry, this means taking dollars from existing channels, particularly direct mail…its closest competitor. And that's the genesis behind this rash of articles and planted stories denigrating old media like newspapers while forecasting the decline and fall of direct mail and the post office.

If the marketing budget pie was growing in size proportionately to the number of new marketing channels, the e-mail marketers would find less impetus to maligning direct mail in an effort to fund its campaigns.

Another pertinent issue is the sheer volume of new e-mail marketing companies vying for business. Like any new technology, there's a lifecycle curve for vendors. It starts with a few, followed by rapid growth in the number of vendors, to a leveling off and then a decline to some point of equilibrium. Right now we are on the rapid growth portion of the curve. This means there are too many e-mail marketing vendors fighting for clients. This, too, puts extreme pressure on the available marketing dollars.

Just remember, contrary to what you will read in the press and trade publications about the explosive growth of e-mail marketing at the expense of direct mail, the direct mail channel is in no danger of ceding its number one position to e-mail marketing.

The real battle here is being fought in marketing departments all over the country. Like locusts swarming out of desperation and hunger, e-mail marketers are descending on everyone from the CEO to the marketing product manager – PowerPoint in hand – attempting to convince the decision markers that e-mail marketing is where the action is today. And grabbing a piece of the budget pie generally requires convincing CEOs and marketers that another channel simply isn't producing the desired results. Unfortunately, in this rush to grab a portion of a smaller pie, direct mail marketers are dramatically outnumbered…giving them a serious disadvantage in the competition.

THE CONTRARIAN APPROACH (THE ROAD LESS TRAVELED)

With so many companies rushing to jump on the e-mail marketing bandwagon, it won't be long before the vastly overcrowded vehicle slows to a crawl under its own weight. You can avoid this pending marketing disaster by striking out on your own and electing to use a less crowded vehicle on a less crowded street...the traditional direct mail channel. It's the perfect contrarian move today – especially given the fall-off in mail from the giant credit card issuers and many larger banks resulting from the recession. And let's not forget the impact online bill pay is having on mail volumes. Look at it like this – would you rather drive across town on less crowded city streets or fight the growing congestion on the freeway?

Fortunately, we are not looking at an either-or situation. After a brief period when countless marketers rush to e-mail marketing as the solution to their problems, the tsunami of e-mail marketing messages will subside and e-mail marketing will settle in as just another marketing channel fighting for its share of the marketing budget pie.

Traditional direct mail has been with us for almost 120 years and its not about to fade away any time soon. In the meantime, perhaps this comparison between traditional direct mail and e-mail marketing will help you decide how much of each channel to use.

PROS AND CONS OF DM VERSUS E-MAIL

Direct Mail

Pros:

• Less crowded channel
• Doesn't require a computer
• Hardcopy allows it to be read anywhere at any time
• Allows multiple components
• Much greater creative flexibility (color, look, feel, dimensional, etc.)
• Long, rich history for personal communications
• People enjoy receiving mail at home
• Perceived as more personal than an online electronic message
• Doesn't interrupt other work you are doing
• Continued improvements over 200 years resulting in highly efficient operation
• Delivery interruptions unlikely as it can be delivered under almost any circumstances

Cons

• Longer lead time to develop and put in the mail
• Rising postage costs
• Costs more per message
• Some perceive as "junk" mail
• Environmental issues

E-mail Marketing

Pros

• Costs less per message sent
• Faster delivery
• Can be immediately deleted
• Doesn't use paper unless the message gets printed
• Ideal for instant communications when required

Cons

• Less creative flexibility – one dimensional, too many graphics slow it down
• Often perceived as unwanted spam
• Can be lost in online black hole and never delivered
• Subject to deceptive and phishing marketing messages
• Not always easy to read online
• Requires a computer
• Channel becoming overwhelmed very quickly due to lost cost and speed of delivery (this is the idea that greatest strength is also your greatest weakness)
• Often interruptive while doing other work online
• Rapid growth of a new technology leads to occasional technical problems
• Subject to mass disruption due to total dependability of a functioning Internet

Again, the ultimate decision isn't direct mail versus e-mail. It's how do I add e-mail marketing into my existing marketing channel mix – at least initially – until I have some solid experience and data on which to base permanent changes in the mix.

One very important thing to remember about direct mail is there will always be consumers who prefer the tactile experience of holding your mail piece in their hands versus viewing it online. Of course, they can always elect to print your e-mail marketing message for reading later. It won't look and feel the same as a professionally printed piece and this could have a negative impact on response. And, you'll be shifting the production cost from your marketing budget to your prospect.

Before you succumb to the enchanting music and voices of the growing number of e-mail marketing sirens, it's important to remember something that Mark Twain once wrote: "The news of my death has been greatly exaggerated." This same reminder applies today when it comes to the postal service and traditional direct mail.

Both are very much alive and well and flourishing as the leading marketing channel based on present and projected advertising spending.