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Direct Mail Spending Surges 7.5% in 2006, More Growth Ahead

Press release from the issuing company

December 14, 2006 - Despite rising postal rates, higher raw materials costs and the advent of numerous alternative channels, marketers continue to seek out the return on investment benefits of direct mail. spending $60.6 billion on the channel in 2006 - according to a white paper released today by Winterberry Group, a leading strategic consulting firm serving the marketing industry. The white paper, entitled Vertical Market Trends in Direct Mail and the Impact on Production Service Providers 2006, is the New York-based consulting firm’s third annual study of the direct mail production sector. Based upon feedback provided through hundreds of interviews with executives from throughout the direct mail industry, it explores macro trends affecting mailers and service providers, as well as unique developments specific to one or more vertical markets. Despite murky economic conditions and the rise of several competitive “below-the-line” marketing channels, Winterberry Group forecasts continued growth in direct mail through the 2009 timeframe. The report concludes: “The looming postal rate increase, the price of consumables and the reallocation of marketing budgets to interactive channels constitute major challenges for marketers and providers alike. However, as the multichannel mentality continues to gain ground among ROI-focused marketers, we expect solid, if not robust, growth in direct mail spending to carry production providers through 2007.” The white paper further outlines three macro trends and five vertical market trends which should play significant roles in shaping the direction of direct mail use in 2007. The macro trends include: - Complex, high-volume multichannel campaigns become the industry standard, driven by enhanced marketing database segmentation tools and widespread CRM adoption - Forthcoming postal rate increase, combined with new delivery point validation regulations, drive the need for advanced data hygiene and postal optimization services - Strategy and creative service providers move to integrate analytics and consumer targeting services with their existing portfolios, in order to counteract the threat of service commoditization in the agency space. “As marketers continue to re-examine their media mix allocation, direct mail has remained a critical and reliable means of driving consumer interest and action, both leading to strong ROI performance,” said Bruce Biegel, Winterberry Group’s senior managing director. “Though continued focus on the Internet and the postal increase will raise the competitive bar in the coming year, we expect that strategically-prepared production companies can benefit from the emerging emphasis on customer segmentation and data-driven growth opportunities within the direct mail space.” Vertical Market Trends in Direct Mail and the Impact on Production Service Providers is available for complimentary download via the Research page of Winterberry Group’s Web site, http://www.winterberrygroup.com/research.html.

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