There are certainly more glamorous kinds of marketing (newspapers, radio, TV, magazines, to name a few)...why use direct mail in the year 2008?

The answer can be summed up in two words:  Market Fragmentation.  In almost every industry, businesses have witnessed a sharp drop in the effectiveness of traditional media advertisement. 

The prices of newspaper and magazine ads continue to increase and the return on investment is no longer justified.  THe same applies to TV and radio ads.  Newspapers and Magazines have seen record declines in readership and this trend will continue over the next 6 to 10 years.  The younger generation of consumers now gets most of its news and information via the Internet or from streaming news channels.  Studies have shown that once consumers form their information-gathering habits, they are unlikely to change.  Even worse news for traditional print advertisement is that an already declining reader base will shrink even more quickly.. There is no "replacement generation" coming.

How does Market Fragmentation apply to your advertising buying mix?

Your greatest advertising investment should be made in the areas that have the greatest chance of return.  If 85% of the consumers in an area are likely to drive to your store, or become buyers, that is a great place to advertise.  However, repeatedly advertising in areas with a lower probability is a poor habit/ineffective use of dollars.

When you buy mass media products such as TV, radio and newspapers, the numbers sound "really great".  You are sold on the total exposure of their ads and the numbers are large.  Remember, however, this also includes a large number of consumers that will never consider making the trip to your store and/or purchase your product.  (Out of your buying circle).

If a TV station boasts an 80 mile effective delivery range and your circle is only 15 miles, you are wasting 81% of your advertising dollars on consumers that will not buy from you.  The same applies to newspapers and radio.

Direct mail, however, allows you to pick precise types of individuals (certain ages, incomes, interests) within your effective zones/circles and "dominate them".

There are a few hidden benefits to direct mail that not many people realize..

In many markets fewer than 35% of households get a newspaper, but every home has a mailbox.

Very few consumers between the ages of 22 and 39 read the paper, but each one checks their mail daily.

There are now over 400 channels for consumers to watch, but each person only has one mailbox.

Local retailers can't reach satellite radio customers, but they all stop at the end of the driveway to get their mail each day.

Only 50% of consumers get called to the dinner table for a "family dinner" each night, yet every home hears the same question each day; "Did you check the mail?"

Every form of advertising has increased in retail price except direct mail.  Printing and mail production rates have actually dropped due to a competitive atmosphere.