Benefits Of Direct Mail Advertising Industry Essay

Benefits Of Direct Mail Advertising Industry Essay

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Introduction
Direct mail advertisers distribute marketing materials, such as coupons, flyers or samples, primarily through the US Postal Service (USPS) and occasionally through other commercial delivery services. Direct mail has historically provided a less-expensive alternative to traditional advertising outlets like television, radio and magazines. However, for decades, increased completion from digital advertising has threatened the industry. Consequently, the Direct Mail Advertising industry is expected to increase marginally at an annualized rate of 0.1% to $11.9 billion over the five years to 2016; which includes 1.1% projected growth in 2016 alone.
The Webmail Providers industry has fared well over the five years to 2014 in line with the rising prominence and accessibility of internet-based services. Despite challenges during the recession, including the 1.6% drop in consumer spending in 2009, businesses continued to experience mounting demand for establishing internet presence via advertising. Meanwhile, a skyrocketing number of broadband connections continued to drive individuals ' use of webmail accounts and related services. Since 2009, the percentage of services conducted online has climbed from 7.9% in 2009 to 10.1% in 2014. Consequently, businesses ' need for online presence has continuously strengthened, helping push up industry revenue at an annualized rate of 2.6% to $1.0 billion over the five years to 2014, including 5.5% in 2014.

Industry Life Cycle of Direct-Mail Marketing
The direct mail marketing industry is in the decline phase of its life cycle. According to IBISWorld report of Direct Mail Advertising, there are three reasons of declining. First, the industry is expected to grow more slowly than the econom...


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...e years to 2014, firms are aggressively competing to build webmail platforms that attract users and advertisers” (Kahn, 2014).


Current Performance of E-mail Marketing
IBISWorld expects industry revenue to grow at an average annual rate of 2.6% to $1.0 billion over the five-year period. In 2014, webmail providers ' revenue is anticipated to grow another 5.5%, supported by the continuously growing share of services conducted online (as in Figure 3). Moreover, the industry shows heavy concentration level and mounting competition (as in Figure 4). The four largest industry operators are Google, Yahoo, Microsoft and AOL. “In 2014, they are expected to generate an estimated 79.4% of industry revenue with brands like Gmail, Yahoo! Mail, Microsoft Outlook and AOL leading the pack” (Kahn, 2014). Therefore, its barriers to entry in this industry are high and are increasing.

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