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Direct Mail Spending To Surge 7.5 Percent In 2005, According To Winterberry Group White Paper

Friday, September 30, 2005

Press release from the issuing company

NEW YORK, September 19, 2005 – Reflecting a growing emphasis on measurable “below-the-line” media in the broader marketing mix, direct mail spending will grow by a robust 7.5 percent in 2005 according to a white paper released today by Winterberry Group, a leading strategic consulting firm serving the direct marketing, marketing services and marketing technology industries.   According to the white paper, entitled Vertical Market Trends in Direct Mail and the Impact on Production Service Providers 2005, macro industry trends including the upcoming postal hike, possible new data legislation and production overcapacity are affecting direct mail volumes across all vertical markets. Winterberry Group also examines seven vertical-specific trends, dealing with everything from the state of CRM to digital print adoption, that are having a more disparate effect on individual segments.   “The looming postal rate increases, regulatory constraints on marketers, the rise of the Internet and other challenges to direct mail production have been relegated to back-of-mind status as marketers continue to both expand advertising budgets and shift spending to direct, measurable media like direct mail,” says Bruce A. Biegel, Winterberry Group’s senior managing director.   Vertical Market Trends in Direct Mail and the Impact on Production Service Providers 2005 is Winterberry Group’s second annual report on the key trends impacting the direct mail production industry. Based on hundreds of interviews conducted over the past 12 months with marketing executives and the service providers who support their direct mail efforts, the study examines 10 developments that are influencing the products, profits and ultimate makeup of the direct mail production industry. They include:   • USPS rate hike heightens focus on achieving postal savings through optimization • Marketers and providers remain concerned about legislative actions – including HIPAA and potential new data security and “do-not-mail” laws – that threaten to undermine the industry’s ability to reach consumers • Pricing stabilizes after a slight increase due to higher paper and ink prices; overcapacity continues to restrain pricing leverage • Acquisition increasingly dominates direct mail applications, accounting for more than 70 percent of estimated mail volume • Consolidation among customers enhances competitive pressure on service providers • Increases in CRM adoption lead to more targeted campaigns • Expansion of multichannel marketing campaigns – those that cross multiple promotional media – heightens sophistication of direct mail pieces and requires providers to offer unique technological solutions (i.e. linking Web to mail) • Digital print technology improves; market adoption accelerates • Statement printing market stabilizes; finds linkage to e-statements in the RFP process • Mailer selection gravitates toward integrated service providers whose business models offer a broader mix of value-added services.   Vertical Market Trends in Direct Mail and the Impact on Production Service Providers 2005 is available for complimentary download via Winterberry Group’s Web site, located at http://www.winterberrygroup.com.




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