By Ronnie H. Davis, Ph.D., Chief Economist, GATF/PIA October 20, 2003 -- What is the answer to this question? In my mind the answer has to be "yes" or why else do we spend over $250 billion on advertising (over 2 percent of GDP) in this country if not to stimulate demand for various goods and services similar to printing. Much of this advertising is spent on business to business services like printing. So there is no doubt that the demand for print is not fixed but can be changed. Unfortunately, most print marketing is directed to print buyers (those already committed to buying print) and is focused on providing print cheaper, better and faster than the printer down the street rather than marketing print against other media to decision makers --those making decisions about which media to use. However, an excellent case can be made for print against other media. Word of Mail While the best advertising is still word of mouth the next best may be word of mail . Let's look at the case that can be made for stimulating the demand for direct mail printing, a sector accounting for around $30 billion in annual printing sales. Virtually all U.S. households have mail boxes that can be targeted based on various demographic characteristics making direct mail an ideal advertising tool. Further, the current movements to restrict telemarketing and e-mail marketing will spur growth for direct mail. Ironically for such an effective communications tool, there is a lack of effective marketing of the media itself. A great source of information and research on the effectiveness of direct mail is the U.S. Postal Service. Here are just a few highlights from recent USPS research on direct mail: * Consumers received an average of 16.4 pieces of direct mail per week in 2002 – an increase of 17 percent from 2001. The mailbox is still an under-utilized media channel. * Eight out of ten consumers look at and/or read their direct mail. * 74 percent of households read their direct mail weekly and 86 percent read it monthly. * 74 percent of all households expect to have direct mail and 59 percent expect to have catalogs in their mailbox daily. * 32 percent of households perceive that direct mail provides them specific value in running their home life. * 39 percent of households have ordered products and services from their home based on information from a direct mail and 50 percent have ordered based on information from a catalog. * 57 percent of households expect that their shopping plans will be affected by the mail in the next daily delivery. * 80 percent of consumers are exposed to the direct mail they receive. What they do 2002 2001 Usually read 11.2% 12.8% Read some 31.3% 28.7% Usually scan 39.7% 37.4% Total 82.2% 78.9% • Consumers read direct mail which is relevant for them. What they do % of Adults Read all direct mail 10% Read based on needs 38% Read based on products/services 16% Read from organization I know 9% • Consumers respond to and act on the direct mail they receive in important ways. They respond based on the quality of the direct mail. Consumer Actions Mail is Useful/Interesting Sort mail daily 76% Enjoy taking time to go through the direct mail 71% Clip coupons 69% • Consumers act on the direct mail from organizations with which they have a relationship or know. The Relationship % of Direct Mail Read % of Direct Mail Looked At Customer of the company 60% 11% Know the company 41% 22% Do not know the company 27% 22% A Growth Opportunity This information makes a great case for more direct mail in the media mix. The U.S. Postal Service has agreed to partner with GATF/PIA in anew Preference for Print initiative to promote direct mail. As part of this partnership GATF/PIA and the USPS will be developing more information that printers can use to encourage their customers to devote more of their marketing and promotional spending to printing. I anticipate that much of the growth opportunity within direct mail will be for more targeted promotional materials and involve personalization and on-demand printing. So where do we go from here? Over the next few months the USPS and GATF/PIA will develop the materials and programming to implement the Preference for Print initiative.